Barack Obama and His New Anti-Outsourcing Policies

Barack obama renews his anti outsourcing tirade even as indian it giants create jobs for americans

In an ironical twist which was probably not anticipated, even as Barack Obama tries to woo the American voter with his favourite whipping boy – outsourcing – Indian IT giants are having the last laugh as they are busy creating jobs for Americans within America!

It was only to be expected. In a bid to push up his sagging ratings during his re-election campaign before the November polls, US President Barack Obama has once again chosen the anti-outsourcing bait to swing public opinion in his favour. In his third State of the Union address to a joint sitting of Congress last week, Obama tried to woo the American voter with his favourite whipping boy – outsourcing. He minced no words when he targeted American companies, warning them that they could kiss tax breaks goodbye if they continued to ship jobs overseas. At the same time, he promised greater tax sops for those US companies who were committed to creating more jobs for Americans within America instead of sending them to low-cost outsourcing destinations like India and China.

"No company should get a tax break for outsourcing jobs. Instead, tax breaks should go to manufacturers who set up shop here at home. Bigger tax breaks should go to high-tech manufacturers who create the jobs of the future," said Obama during his recent visit to the Boeing plant in Everett, Washington State.

However, there is a twist in the tale, and an ironic one at that. Even as Barack Obama spewed venom against outsourcing, Indian IT giants HCL and Infosys announced that they were increasing their hiring of local Americans for their units in America and Europe. In fact, Indian IT services company HCL Technologies has announced plans to create as many as 10,000 local jobs in the US and Europe over the next five years.

One of the chief reasons behind this decision, that is certain to have raised quite a few eyebrows in the US and dilute Obama's carefully-scripted frustration against outsourcing, is the acute shortage of visa issuance for its Indian employees.  According to S. D. Shibulal, CEO and MD, Infosys, the firm has been hiring more talent locally in the US and Europe due to the huge decline in visa issuance to Indians by the US.

However, whatever the reason, the bottom line is that India – the very nation that had hitherto been viewed as the nemesis of the US job market – is now generating employment for local Americans! Americans who had been politically bullied into believing stories that the increasing unemployment was the direct backlash of outsourcing to India and China can now do a rethink.

Interestingly, top leaders in India's burgeoning IT industry are not pressing the panic button at all and have dismissed Barack Obama's anti-outsourcing speech as nothing but 'political/ election rhetoric'. Backing this view are the Republicans who feel that Obama is diverting public attention from the massive $15 trillion debt that the US is currently reeling under and using the anti-outsourcing vitriolic as merely vote-capturing tactics in a run-up to the November polls.

Contrary to popular belief, and much as Barack Obama would have the Americans believe, not everyone in the US is against outsourcing. There are many schools of thought that are unanimous in supporting outsourcing for the cost-savings it affords, particularly to the small businesses. When economic recession hit the US in 2008, it was outsourcing that actually helped save many jobs. By outsourcing the low-cost business functions to cheap destinations like India and China, companies actually helped conserve their stretched finances, handing out fewer pink slips and channelizing those saved finances into keeping the company afloat.

The US President can lash out all he wants against outsourcing; the fact of the matter is that outsourcing is here to stay. “It would be foolish to stop companies from outsourcing. It would make our companies less competitive,” were the strong words used about the outsource industry by Robert B. Reich, former Labor Secretary under former US President Bill Clinton. If they wish to retain their competitive edge over their rivals in the rest of the world, US companies have no choice but to outsource. Whether Obama likes it or not, the world is shrinking; geographical boundaries and time-zone differences are hardly the hurdles to businesses functioning smoothly that they once were. Let's say the US government seriously clamps down its protectionist policies and makes it difficult for US companies to outsource; can it force other countries like the UK, Europe, Australia and Canada to stop outsourcing as well? The US companies know only too well that if they did indeed stop outsourcing by giving in to the arm-twisting tactics being employed by the Obama regime, it would only be a matter of time before their rivals in other countries steal a march not only over them but over US products and services as a whole. Can Barack Obama afford this backslide into a further economic abyss for the US that is only just making a sluggish recovery from the economic meltdown? Can he shoulder the rather heavy weight of having been 'penny wise but pound foolish'?