What’s all the brouhaha about Outsourcing?

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About The Author


Brian Santhumayor of Nanthoor, Mangalore, has a Bachelors Degree in Engineering and MBA in Marketing and works as an Account Manager for an enterprise software company.  He volunteers by fundraising for numerous non-profit associations in the US and has won numerous awards and commendation for his charitable efforts.


One only has to read the newspapers, watch television or listen to the radio broadcast and get bombarded with mixed signals about the US economy. President Bush recently told supporters in Stratham, New Hampshire, “I say we have a strong economy, and it’s getting stronger. The economy has turned the corner and is on the upswing, businesses are adding jobs and consumer spending is on the rise.” But Democrats are quick to attack this claim. John Kerry recently in statement released by his campaign said “The president keeps saying we’ve turned the corner. But unfortunately, today’s job numbers further demonstrate that our economy may be taking a U-turn instead.  Saying we’ve turned the corner doesn’t make it so.”  President Bush insists that the tax cuts he pushed and Congress passed, have jump-started the economy.


Well, for the common American whose chief concern is having a decent job, paying the bills, putting food on the table for his/her family and managing day to day life, is this all talk about the upswing in the economy for real or is it just rhetoric. Is the economy picking up momentum or is it sputtering? Should you and I be optimistic or pessimistic? 


We know for a fact that consumer spending and business behavior are both key drivers of the economy.  Consumer spending makes up more than two-third of all economic growth. But if we look at the pace of business spending, despite the over 1.5 million jobs added this year and a 1st quarter growth rate of 4.5%, it is still very cautious and certainly not a sign of optimism. A sign of lower consumer confidence only shows the fragility of our US economic expansion. Critics call this a jobless recovery and many blame outsourcing of jobs to countries like India and China as the root cause of rising unemployment. Bush and Kerry both differ in their approach when it comes to dealing with this problem of outsourcing. Unfortunately, India being one of the major recipients of outsourced US jobs has been a target of finger pointing by some of the Americans who blame low cost labor in India as the cause of unemployment in America. But recent Labor Department data underscore what even Democratic economists have said for some time — outsourcing jobs overseas, or “offshoring,” accounts for just a small fraction of the many millions of jobs that are lost each year even in a good economy.


Economists blame the sharp decline of the economy on rising energy prices, which cut into disposable income. Several retailers have blamed lackluster sales this summer on the pinch high energy costs are putting on consumers. Also, the high oil prices, the ever increasing fear of terrorism, uncertainty about the outcome of the presidential election in November have added to the woes of this economy.


The Labor Department report showed only 32,000 new net jobs added to payrolls during the month of July, down from a revised 78,000 jobs that were added in June. The increase was the smallest since December, when payrolls rose by just 8,000. This is the second straight month of jobs growth far below economists’ forecasts, following three months that showed strong jobs growth starting in March.. In yesterday’s report, the US Census Bureau data stated that the US poverty rate rose for the third consecutive year to 35.9 Million. Last year, incomes stagnated and more Americans went without health insurance. Economists fear that the gap between low and middle-income workers and those in the higher-income brackets is widening. Today’s labor department report shows that the number of people filing for jobless benefits jumped last week.


In the last 4 years, many Americans have experienced the rollercoaster ride in the economy. Recession, job losses, loss of health care benefits, dwindling paychecks and rising cost of living has brought hardships on a lot of families.  A typical American is worse off than in 2001 (US census bureau report).  I am no longer surprised when I hear many of my Fortune 100 customers tell me time after time that they have postponed expenditures and spending on information technology products! It is a sign that although many businesses are making profits, they are still waiting to pull the trigger and not creating the jobs which Americans are in desperate need.


As an optimistic American, I hope that there is light at the end of the economic tunnel. America is the greatest economy on the face of this earth and I hope that whoever ultimately wins the election in November will act fast to kick-start the economy, create new jobs, address and solve issues related to health coverage, social security, energy, taxes and deficits.  This would give all Americans hope that the American Dream is still alive and can be attained by all those who aspire!

Author: Brian Santhumayor- USA


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