more on Exporting America

[Dave Farber <dave () farber net>]

Delivered-To: dfarber+ () ux13 sp cs cmu edu
Date: Thu, 08 Jan 2004 06:17:33 +0530
From: Suresh Ramasubramanian <suresh () hserus net>
Subject: Re: [IP] more on Exporting America
To: dave () farber net, Dana Blankenhorn <danablankenhorn () mindspring com>

Dave Farber  [1/8/2004 2:30 AM] :

> -----Original Message-----
> From: Dana Blankenhorn <danablankenhorn () mindspring com>
> There is the cost of environmental compliance, and the ability of workers
> elsewhere to organize for better working conditions, for starters.

You do have to consider that - not all countries outside the USA are 
dictatorships. India, where quite a lot of US jobs are going, is one of the 
world's largest democracies, for example.

India, at least, has a rather long history of trade union activism to raise 
salaries - where needed.  Right now, kids going into call centers are 
heavily overpaid, by indian standards ... enough for them to spend a lot of 
money on new clothes, fast cars, expensive restaurants and nightclubs ... 
if they stay in India.

If they save enough for a short holiday to the USA, their salaries start 
looking mighty small when converted to USD ($1 = INR 46.50).

> American multinationals are escaping these responsibilities by going
> overseas, because there are no environmental standards in many countries,
> and there is no right to organize.

That might apply to (say) Nike (shoes made in Taiwan), or to Enron (which, 
when it was alive, tried to set up a large project in India, and ran into 
extensive allegations of bribery).

HOW does that apply to jobs in the computer software and/or call center 
industries?

> A second point. America's advantage lies in its flexibility. Flexibility is

Shirley you mean "used to lie".

Not all currencies in the world are as overvalued as the USD, and so a lot 
of people can set up offshore operations that provide their employees with 
nearly the same living standards, at a far lower cost.. solely because of 
the massive difference in exchange rates.

1 USD = 7 HKD.  1 HKD = 6 INR.  1 USD = 46.50 INR.  Do the math.

> We will only get it back by negotiating a level playing field on working
> conditions, and by creating more competition within our own market.
> Competition is what produces innovation, not monopoly.

What working conditions?  You mean you will let call center operators in 
the USA earn enough that if they want, they can buy new and expensive 
clothes every other day, hang out in nightclubs etc?   That is so very kind 
and generous of you, Dana.

Do keep in mind the assumption that a salary earned in India and spent in 
India is approximately worth 10x that salary, when earned / spent in the USA.

Though, as most kids just out of college <- typical call center new hires 
in India -> tend to live with their parents, all their salary, all USD 
300..500 a month (or INR 15K..20K a month), is disposable income and when 
kids that age get themselves all that income, they tend to spend it.  As a 
matter of fact, that same USD 500 a month will feed, house and clothe a 
middle class family for a month in India, with some left over.

Stateside, if you get to live in a trailer and eat ramen, $500 might just 
be enough. For you alone.  In India, that 20K salary is more or less 
equivalent to a USD 2K salary - which, in some cities, is fair enough for a 
small middle class family.

Oh - walk into a McDonalds or KFC in the USA, and then walk into one in 
India, and see how much they pay the burger flippers and the "stay here or 
take away? do you want to supersize that" counter salespersons in both places.

What makes it weird is that a Big Mac burger meal that'd cost USD 3 
stateside would cost you INR 100 or more in India for a "Maharaja Mac" 
meal.  That same INR 100, spent in a good restaurant in India, would buy 
you a meal with soup, naan bread, tandoori chicken tikka masala, pulao 
rice, dessert...

If you find me a place in the USA - say in Boston, where I just spent 3 
months before returning to India - where I can get a full Indian lunch for 
about the same cost as a big mac, I'd be obliged to you.

        srs

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