Indian IT firms employ over 1 lakh in US: Report

[Developereo]

Hmm.. Not too good at maths it seems..

Lets look at the numbers..

For every 1 direct job, 1.6 new indirect jobs getting created in the US
which means out of 280 K jobs, 107 K are direct and 173 K are indirect.. (Please note that the indirect jobs are incremental and wouldnt exist if the 107 K direct jobs werent there..If there wasnt a development facility of Genpact in Wilkes barry,PA supporting 230 direct jobs, the 400 indirect jobs of infrastructure,cleaning,food,transportation etc supporting that facility wouldnt exist either)

Now every 3 out of 4 jobs (on the base of 280 k) are held by locals, this would mean 210K jobs out of 280 k are held by locals,which means even out of that 107K jobs, at least 34K jobs are held by the locals... and do remember, that for every H1B visa, apart from the visa holding worker paying the same (or higher) rate of taxes as US citizen, the Indian company that gets that person there also pays an additional tax that contributes to the USA economy...

Uh no. These are not "new" jobs. All the article claims is that the Indian companies "support" these jobs and, as I said, these indirect jobs would exist regardless of who held the "direct" jobs.

Coming to the other part, yes 65-70% of the "direct" jobs are held by imported Indians, so the initial claim of 100,000 jobs is bogus. As you pointed out, the number is closer to 34,000 -- and that's taking NASSCOM's numbers at face value.

Finally, as for taxes, again it is irrelevant. These taxes would be paid by whomever had the jobs. If the jobs hadn't been outsources, the tax revenue would have remained the same.

 

[foxbat]

Uh no. These are not "new" jobs. All the article claims is that the Indian companies "support" these jobs and, as I said, these indirect jobs would exist regardless of who held the "direct" jobs.

That's the flaw in your argument. If Genpact(an Indian Company) did not have that center in Wilkes barry, why would there be a need of indirect jobs supporting that center. ?

Coming to the other part, yes 65-70% of the "direct" jobs are held by imported Indians, so the initial claim of 100,000 jobs is bogus. As you pointed out, the number is closer to 34,000 -- and that's taking NASSCOM's numbers at face value.

The initial claim never said that the 100K jobs were all locals.. Whoever read the complete report would know that.. Not reading the report and assuming wrong can not have any bearing on the credibility of the report.. Can it?

Finally, as for taxes, again it is irrelevant. These taxes would be paid by whomever had the jobs. If the jobs hadn't been outsources, the tax revenue would have remained the same.

And thats the flaw again.. Without these companies creating these jobs in the US, these jobs wouldnt exist.. Do understand that the companies outsourcing these jobs do that for a cost and strategic advantage that allows them to make better AOI which in turns makes them grow further and create more core jobs within their company's core competencies.. And hence the argument of taxes still being paid on these jobs if they were not outsourced is really what is bogus...

Uh no. These are not "new" jobs. All the article claims is that the Indian companies "support" these jobs and, as I said, these indirect jobs would exist regardless of who held the "direct" jobs.

That's the flaw in your argument. If Genpact(an Indian Company) did not have that center in Wilkes barry, why would there be a need of indirect jobs supporting that center. ?

Coming to the other part, yes 65-70% of the "direct" jobs are held by imported Indians, so the initial claim of 100,000 jobs is bogus. As you pointed out, the number is closer to 34,000 -- and that's taking NASSCOM's numbers at face value.

The initial claim never said that the 100K jobs were all locals.. Whoever read the complete report would know that.. Not reading the report and assuming wrong can not have any bearing on the credibility of the report.. Can it?

Finally, as for taxes, again it is irrelevant. These taxes would be paid by whomever had the jobs. If the jobs hadn't been outsources, the tax revenue would have remained the same.

And thats the flaw again.. Without these companies creating these jobs in the US, these jobs wouldnt exist.. Do understand that the companies outsourcing these jobs do that for a cost and strategic advantage that allows them to make better AOI which in turns makes them grow further and create more core jobs within their company's core competencies.. And hence the argument of taxes still being paid on these jobs if they were not outsourced is really what is bogus...

 

[Developereo]

That's the flaw in your argument. If Genpact(an Indian Company) did not have that center in Wilkes barry, why would there be a need of indirect jobs supporting that center. ?

If those jobs were not outsourced, they would be done by US workers, and they would need whatever "indirect" jobs are being supported. There is work to be done. The only question is, will it be done by US workers, or imported Indian workers?

What is most hilarious is that the people here defending outsourcing are the same ones who beat their chest loudest about being "American". Yet, when it comes to choosing Indian interests v/s American interests, they choose India.

The initial claim never said that the 100K jobs were all locals.. Whoever read the complete report would know that.. Not reading the report and assuming wrong can not have any bearing on the credibility of the report.. Can it?

Then you haven't been paying attention. That is precisely the claim of some Indians that I have been debating. They claimed these jobs were all "US jobs", which is simply bunk. The clear implication in the original article is that Indian outsourcers are somehow creating something new, which is again bunk. They are simply taking jobs which would otherwise be done by local US workers.

And thats the flaw again.. Without these companies creating these jobs in the US, these jobs wouldnt exist.. Do understand that the companies outsourcing these jobs

You contradict yourself. How can companies outsource jobs which "wouldn't exist"? The fact is that the jobs being "created" by Indian outsourcers are simple jobs that would otherwise be done by local US workers. They are not creating anything new.

do that for a cost and strategic advantage that allows them to make better AOI which in turns makes them grow further and create more core jobs within their company's core competencies.. And hence the argument of taxes still being paid on these jobs if they were not outsourced is really what is bogus...

Yes, that has been the false, snake oil sales pitch to justify outsourcing. The reality is completely the opposite. Here is Australia, most of the big banks are shedding local jobs, even as they ramp up outsourcing. The same thing has happened in the US. Companies simply pocket the savings to boost their share price. In any case, what clients do with their savings is a whole other topic. Let's stay focused on the original article.

 

[Speaker]

Actually, H1-Bs don't pay full tax -- I believe SS tax gets refunded. If the same jobs were held by full residents, more of the money would stay in the US.

These jobs are basically a migration pipeline; they further dilute the local job market and exacerbate the unemployment problem in the US. This hurts existing NRIs as much as everyone else.

H1-Bs pay more tax than people with Green Card or Citizenship. People are not against Indians/immigrants working in American tax-paying jobs, they are against outsourcing, which is not surprising.

Besides, there is not enough local talent in the US to cover the jobs in IT service companies. Americans excel at product development and other creative IT roles, but are less inclined to do the diligent, monotonous roles that Indian IT firms offer. Most of these companies have ventured into product development and consultancy services, and that might be an opening for the future.

They pay full resident taxes, but it gets refunded at the end of the year, which is correct. Likewise, unless you become a PR or a citizen, the same thing happens on the income tax.

SS and Medicare taxes are exempt/refunded only for non-resident visas like F1, J1 and L1 etc. H1 have to pay it in full.

 

[Yeti]

Not sure about US but in UK there is IT shortage so no choice but to hire technical Indians for jobs.

 

[JayAtl]

Any competent lawyer will do.



You misunderstand me. I have no issue with whatever % of H1-B is going to Indians; I have hired a few myself.

My only point is to refute the impression created in the original post that these jobs by Indian companies are going to US residents when the number of H1-B visas acquired by them clearly tells the opposite story.

Come on now- the complete lack of reality you have shown here. The insistence that you know something( basically your entire assertion here), all based of your anecdotal evidence.

The history of your posts showing every opportunity to put India and Indians down- to now say you " hired Indians"- let alone you be in a position to hire anyone ? is biggest farce you are trying to lay one over us. That's like me saying I hire Chinese.

 

[53fd]

I have never seen an Indian IT company in the US hire locals, most of their employees are graduating Indian students desperate to stay in the US at any cost, to the point that they get exploited by these companies.

 

[itsme]

I have never seen an Indian IT company in the US hire locals, most of their employees are graduating Indian students desperate to stay in the US at any cost, to the point that they get exploited by these companies.

make sure u dont get exploited by such bogus companies. beware...
if u have ever been out of ur hole and been to us or canada. u would know that 30% of graduating engineers in us are indians. 60% are chinese and south koreans, so my frnd if ur talking abt the white man. sorry they dont study engineering anymore coz they cant compete.

 

[foxbat]

If those jobs were not outsourced, they would be done by US workers, and they would need whatever "indirect" jobs are being supported. There is work to be done. The only question is, will it be done by US workers, or imported Indian workers?

Thats where you dont understand the concept of outsourcing.. Say an outsource company has a 300 people center in an inexpensive region of USA where 10-12 US companies outsource 30-40 FTEs work each. Now 2 things happen.. First of all, there is no or negligible reduction in indirect support jobs for each of these outsourcing companies because the reduction of manpower is not too significant.. However by consolidating those jobs from multiple companies into a single center, the outsource company creates a critical mass that generates that eco system around it to sustain itself. Hence the indirect jobs are actually created over and above what already existed in the original companies. And secondly they are created in economically depressed areas as those are the typical target regions due to their low cost for setting up such centers. In short, the jobs are moved from high cost locales to low cost locales which despite creating more indirect jobs (and cost) still provides a cost advantage to the company which is outsourcing these jobs..

What is most hilarious is that the people here defending outsourcing are the same ones who beat their chest loudest about being "American". Yet, when it comes to choosing Indian interests v/s American interests, they choose India.

You are confusing between outsourcing and offshoring I think...

Then you haven't been paying attention. That is precisely the claim of some Indians that I have been debating. They claimed these jobs were all "US jobs", which is simply bunk. The clear implication in the original article is that Indian outsourcers are somehow creating something new, which is again bunk. They are simply taking jobs which would otherwise be done by local US workers.

Refer to para 1 in my response

You contradict yourself. How can companies outsource jobs which "wouldn't exist"? The fact is that the jobs being "created" by Indian outsourcers are simple jobs that would otherwise be done by local US workers. They are not creating anything new.

In most cases the layoffs due to outsourcing are never equal the number of jobs outsourced. A lot of employees are retained against future growth.. The growth that is enabled by the money generated thru cost efficiencies created by outsourcing..

Yes, that has been the false, snake oil sales pitch to justify outsourcing. The reality is completely the opposite. Here is Australia, most of the big banks are shedding local jobs, even as they ramp up outsourcing. The same thing has happened in the US. Companies simply pocket the savings to boost their share price. In any case, what clients do with their savings is a whole other topic. Let's stay focused on the original article.

And where do you think those savings go? Back into the company where they enable expansion and growth. Even if they are pocketed (retained earnings resulting in share price increase), they end up reducing the debt burden of the company and again release cash to power growth.. Which in turn creates jobs in the same company that outsourced..

Thats how world trade works. People outsource the work that is not core to their competencies and pay for the services. Whether its ANZ outsourcing to a BPO company for doing its Balance Sheet creation or Indian Govt outsourcing manufacturing of its MRCA to France

I have never seen an Indian IT company in the US hire locals, most of their employees are graduating Indian students desperate to stay in the US at any cost, to the point that they get exploited by these companies.

Did your indian friends tell you that ?? Over a direct line from LA to Sindh ??

 

[JayAtl]

I have never seen an Indian IT company in the US hire locals, most of their employees are graduating Indian students desperate to stay in the US at any cost, to the point that they get exploited by these companies.

there comes the famous I . I have not . I don't see. I have Indian friend who told me ( in spite of I hating on them here everyday)

The famous - " because I ..... therefore its the norm or it must true across the board"

American Pie( movie) had a great line for this " and then this one time in band camp I ..."

 

[Developereo]

Thats where you dont understand the concept of outsourcing.. Say an outsource company has a 300 people center in an inexpensive region of USA where 10-12 US companies outsource 30-40 FTEs work each. Now 2 things happen.. First of all, there is no or negligible reduction in indirect support jobs for each of these outsourcing companies because the reduction of manpower is not too significant.. However by consolidating those jobs from multiple companies into a single center, the outsource company creates a critical mass that generates that eco system around it to sustain itself. Hence the indirect jobs are actually created over and above what already existed in the original companies. And secondly they are created in economically depressed areas as those are the typical target regions due to their low cost for setting up such centers. In short, the jobs are moved from high cost locales to low cost locales which despite creating more indirect jobs (and cost) still provides a cost advantage to the company which is outsourcing these jobs..

And the point I am making is that this consolidated center can be staffed by US workers. The issue here is not consolidation, but import of foreign workers.

You are confusing between outsourcing and offshoring I think...

When the outsourcing (to foreign-based companies) is staffed by imported workers, the lines get blurred.

In most cases the layoffs due to outsourcing are never equal the number of jobs outsourced. A lot of employees are retained against future growth.. The growth that is enabled by the money generated thru cost efficiencies created by outsourcing..

What I am saying is that, in a lot of cases, that is not happening. The savings are not ploughed back to create more jobs -- they are pocketed to make the balance sheet look better and that's all.

And where do you think those savings go? Back into the company where they enable expansion and growth. Even if they are pocketed (retained earnings resulting in share price increase), they end up reducing the debt burden of the company and again release cash to power growth.. Which in turn creates jobs in the same company that outsourced..

Thats how world trade works. People outsource the work that is not core to their competencies and pay for the services. Whether its ANZ outsourcing to a BPO company for doing its Balance Sheet creation or Indian Govt outsourcing manufacturing of its MRCA to France

What I wrote above about pocketing the savings. The banks are laying off unrelated jobs even though they had record profits almost every year. It's actually even more insidious. The banks claim they are hiring more people but, if you look deeper, the 'hiring' they are doing is imported workers on work visas.

 

[foxbat]

And the point I am making is that this consolidated center can be staffed by US workers. The issue here is not consolidation, but import of foreign workers.

Fair enough.. However, you can never have absolutes. When thru outsourcing these companies are generating that many benefits, they also pull some levers to make the whole situation more beneficial for their own balance sheet as well. After all they are not in this for charity. btw, what you dont probably know is that today, sending an expat from India to live and work in USA is more expensive for a H1B sponsoring company than hiring a local within USA. Most of the time folks are sent across from India due to their experience in working in an outsourced environment or due to some key skill (like mid level actuarial knowledge) .

When the outsourcing (to foreign-based companies) is staffed by imported workers, the lines get blurred.

Not really.. the Imported workers contribute exactly the same way to the USA economy as an immigrant PR does..

What I am saying is that, in a lot of cases, that is not happening. The savings are not ploughed back to create more jobs -- they are pocketed to make the balance sheet look better and that's all.

But a better looking balance sheet makes the company more profitable, reduces the cost of debt and in turn sets the company up for growth or a buy out by a larger company which again results in growth of the economy thru unlocked value. All of it eventually creates more jobs.. On the flip side, a non competitive company would eventually shrink or shut down resulting in much larger job losses..

What I wrote above about pocketing the savings. The banks are laying off unrelated jobs even though they had record profits almost every year. It's actually even more insidious. The banks claim they are hiring more people but, if you look deeper, the 'hiring' they are doing is imported workers on work visas.

You would find bad apples every where.. You cant diss a concept just because a few companies in Australia are not doing the right thing

 

[Vinod2070]

The fact is that Indian IT has created tremendous value for all stakeholders.

This includes their customers most of all (and they are some of the most marquee names around), their shareholders, their employees, the communities where they are located and for the country itself in terms of the tremendous brand value that they have created for Indian IT and India itself.

Not to mention the rub off effect on so many other sectors in India by proving that excellence and merit alone can lead to success for so many. In addition they have been at the cutting edge of corporate governance (mostly) and generated tremendous wealth for shareholders from all over the world.

There was never any doubt about the value being created for their customers in the minds of any reasonable person (or they won't grow like they did and become indispensable in the cutthroat corporate world where the tiniest inefficiencies and wastages are going to be exploited by your competitors). They have become an integral part of the supply chain for their customers that they can't do without.

And the value has not been only in terms of cost but equally quality and scale. You can't become a $100 billion industry just on cost advantage.

By helping their customers stay competitive, the value was always apparent to those that mattered. At the scale that they have now reached, it is imperative for them to have larger number of locals on their rolls. That should blunt the edge of the election time protectionist noises as well.

These noises against "outsourcing of jobs" is nothing new. It has been there since the 70s and 80 when the target were the Japanese automakers. Since then, every few years a new target is found by the politicians and others but the logic of economic reality and marketplace has been overriding.

Most multinationals have the entire world as their market and not just the USA. If their supply chain includes the most efficient suppliers across the globe, it is only to be expected.

 

[Vinod2070]

Come on now- the complete lack of reality you have shown here. The insistence that you know something( basically your entire assertion here), all based of your anecdotal evidence.

The history of your posts showing every opportunity to put India and Indians down- to now say you " hired Indians"- let alone you be in a position to hire anyone ? is biggest farce you are trying to lay one over us. That's like me saying I hire Chinese.

there comes the famous I . I have not . I don't see. I have Indian friend who told me ( in spite of I hating on them here everyday)

The famous - " because I ..... therefore its the norm or it must true across the board"

American Pie( movie) had a great line for this " and then this one time in band camp I ..."

Entirely along predictable lines. The narrative is always the same.

Some unverifiable anecdotes, always projecting oneself as being in a position to "hire Indians" (when no Indian IT company works for any Pakistani customers AFAIK) and looking at everything through heavily tinted glasses.

I think such people are more dangerous for their countries than those who appear to be the most obvious threats. The reason should not be too difficult to understand.

 

[Vinod2070]

I see a lot of zero sum mentality at display here. A mentality that looks at the world as having finite resources and one person or country gaining something is necessarily a loss for another.

Much of the world has moved to win-win mentality that has been shown to work. It is an incorrect reasoning to think that the total number of IT jobs are constant and any job in India means one job less somewhere else.

Indian IT has enabled a lot of services and innovation that would simply not be there otherwise. They would not be affordable and/or there would not be enough qualified people to provide those services.