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India Outsourcers Find Back Door in Canada
Posted by
samzenpus
on Wed Oct 27, 2004 11:10 PM
from the close-all-of-our-borders dept.
from the close-all-of-our-borders dept.
securitas writes "Metro International newspapers Toronto edition reports that more Indian companies are opening back doors into the United States by setting up shop in Canada. The issue of outsourcing, offshoring and nearshoring has become a hot issue, with the 2004 presidential election less than a week away. Candidate John Kerry has said he will close the tax loophole that makes it advantageous to outsource call centers."
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Less than a week to pack... (Score:5, Funny)
I guess that makes me an evildoer, eh? Ah well, at least Guantanamo Bay will be warmer than Winnipeg this winter.
Re:Guess this makes Canada... (Score:5, Funny)
Be sure you show George where we are on the map. It could be embarassing seeing him saying how great Canada's burritos and Corona are after he conquers Mexico.
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Re:Guess this makes Canada... (Score:4, Funny)
> burritos and Corona are after he conquers Mexico.
Would that be more or less embarrassing than when Dan Quayle was heading for Latin America and mentioned that he needed to brush up on his Latin?
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Re:Guess this makes Canada... (Score:4, Interesting)
It can also improve one's English, since English has many words that derive from Latin.
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So now we can really... (Score:5, Funny)
ORIGINAL POST: Important details, Satyam Chairman (Score:5, Informative)
I'd like to point out that the story as posted edited out the attribution.
Editors: Please don't remove quotation marks where they are necessary because that effectively results in plagiarism. The words in quotes are not mine. They belong to the reporter.
Also, the reference to the interview with the Chairman of Satyam - an Indian outsourcer that has set up shop in Toronto - was removed. Knowing that Slashdotters often don't read the source articles, I included that detail as an incentive for people to read what the leader of a large outsourcing company has to say about this politicized business practice.
Original post follows:
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Near-shore is still off-shore (Score:4, Interesting)
Bush said druing a debate that he will let Mexicans to come to US to work legally, and gradually obtain residency. If this happens, the Canadian-Indian issue is small in comparison.
Maybe the ideal "screening" is based on the percentage of employees' residency status, so if over 50% of a Canadian company is from developing countries, it's no deal.
Re:Near-shore is still off-shore (Score:4, Insightful)
News flash: People are people, some of us had the fortune of being born and raised in stronger economical and freer political environments, but to act like it's wrong for a person to find a better job somewhere and for a company to hire that person is completely antithetical to what freedom and our capitalistic nation is all about.
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Re:Near-shore is still off-shore (Score:4, Interesting)
However, if they are working legally, then they have to be working at least at minimum wage, which means there is little or no incentive to hire them rather than an unemployed american citizen, which means that basically they're contributing to the economy. I believe maddox wrote something about this,
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Re:Near-shore is still off-shore (Score:4, Insightful)
I think there are two different keys parts to this statement, (no, i'm not defending one candidate or another).
The first issue is the location of the worker. A mexican immigrant that comes here to work, gradually gaining citizen ship, is contributing to the economy. His wages are taxed, and the things he consumes are local. i.e. he's going to be buying groceries, goods, renting a house, etc. All of this keeps the money in the US, and in a roundabout way, helps create more US jobs. (need more grocery clerks, more construction, etc.)Once they gain Citizenship, they have a vested interest in staying in this country, and continuing to work and consume.
The second issue is the level of education, and the skill level of the jobs. There is a huge percentage of highly educated and/or skilled workers in India and Canada that are "taking" american jobs, and spending the money in their own country. The majority, (no, not all, but the vast majority) of workers from Mexico are relative unskilled laborers. They are not taking over $40k/year jobs with benifits. Of course, this does saturate the lower level, unskilled jobs, and drive their wages down.
To get technical though, in the long run, sending the money to other countries raises their income, and lowers the value of the dollar, making american goods less expensive than before. Exports will go up, but profit will go down, meaning more jobs outsourced to get more profit, and down the downward spiral our economy goes!
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Yes and no.. (Score:5, Informative)
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Kerry in the senate... (Score:5, Insightful)
Re:Kerry in the senate... (Score:4, Insightful)
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Re:Kerry in the senate... (Score:5, Informative)
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Re:Kerry in the senate... (Score:5, Informative)
At least try to find out if your claim is true before you try to reason based on it.
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Re:Kerry in the senate... (Score:5, Insightful)
Because our education system fails utterly to teach people about the basic function of our government.
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Re:Kerry in the senate... (Score:5, Informative)
That's because you don't understand the ideology. You have simply reduced it to the simplest form possible presumably because you are not capable of understanding more complex thought patterns.
"Because you are born in America, you are worthy of help, but if you are born in India, you are not?"
Once again your inability to think beyond black and white has painted yourself into a corner.
I am not really going to go into it but here are the salient points.
1) We should help people all over the world if they need it to the best of our ability.
2) It's impossible to help everybody in the world because there is so much poverty and we really don't have enough money or willpower. Even if we really wanted to give a 100% effort to help the destitute of the world we would be fought tooth and nail by the republicans.
3) Charity begins at home. We really ought to tace care of our own problems first. We should devote MOST of our resources to making sure our own citizens are taken care of first.
You see, it's not that hard. Just compassion mixed with a little bit of realism. We still favor giving money to poor countries and helping them as much as we can but not at the expense of denying our own citizens.
BTW I noticed that you said "A tenet of the democrats is to help the disadvantaged.". Doesn't it bother you that republicans don't even have that tenant. That they don't believe in helping the disadvantaged?
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Re:Kerry in the senate... (Score:5, Insightful)
Kerry is smarter then my dog. *
Right there you have two reasons not to vote for bush.
* I bought two toys for my dog. I named one "abu abbas" and the other one "abu nidal". My dog was able to differentiate between the two in less then ten tries something Bush was not able to accomplish.
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Tech Support (Score:3, Funny)
Re:Tech Support (Score:5, Funny)
User: it's a Latitude CPi-A.
Tech: Got it, a CPi.
User: no, it's a CPi-A.
Tech: I heard you the first time, eh? A CPi.
User: No, a CPi with the letter A.
Tech: With what letter, eh?
...
User: I think it's a boot virus.
Tech: What's about virus?
User: No, it's a boot virus.
Tech: What does "it's about virus" mean? What virus, eh?
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Re:Tech Support (Score:3, Interesting)
Re:Tech Support (Score:5, Informative)
I guess thats one reason, but let me maybe present another one. The company I work for recently did some outsourcing to India, even though we mostly went through Chicago when the RFP negotiations were going on when it came to the nitty gritty (i.e. the "real" work) communication was a huuuuge problem. Even after we worked that out the quality of the code we got back was, let us say lacking (this might have just been this one company, but I'm just saying...). Anyway, by the time the project was done it cost us more and took us longer than if we had just hired local contractors to do it. Edmonton is kind of a weird place, there are at least four post-secondary institutions pumping out IT grads three times a year, putting it bluntly we have a lot of skilled IT people flipping burgers around town. Getting those people who are still keen on the IT industry (but don't want to move away) into low paying but IT-related jobs isn't exactly hard to do.
Edmonton has always been an IT hub because of the Provincial Government (and the IT jobs it attracts), but in the last decade big IT firms have moved in and paled that aspect of Edmonton's IT community, firms like IBM, Microsoft, Fujitsu, BioWare, Intuit (etc, etc...).
P.S. It's good to see NAFTA finally doing what it was designed to do, form an even stronger economic partnership between the Americas.
P.P.S. If these Indian companies have indeed found a back door to profit in the good ole USA, you can be sure that the Canadian Revenue Agency will be sucking the life-blood from them if they are profitable. If there's one thing our Government knows how to do, it's tax the bejesus out of any pocketbook...
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Well at least you will be able to understand them (Score:4, Insightful)
Re:Well at least you will be able to understand th (Score:3, Funny)
I would suppose you could optimize the filter per individual and maybe one of the options on the phone menu is that you can select the dialect you are comfortable with. For example you can select:
+ West Texas drawl (replace all "you" with a you'all so "you do have t
Re:Well at least you will be able to understand th (Score:3, Funny)
this doesn't worry me, for some reason. (Score:4, Interesting)
Re:this doesn't worry me, for some reason. (Score:3, Informative)
Full disclosure (Score:4, Funny)
splendid (Score:5, Insightful)
Close the tax loophole? (Score:5, Insightful)
If there is a loophole, closing it would mean more revenues for the government (plus for them) and/or less outsources (plus for us)
Re:Close the tax loophole? (Score:5, Insightful)
I'm sure the Canadians view this as pretty ironic given that a similar trick was used by the Americans to destroy the Canadian car industry vis using the two FTAs with Canada & Mexico to sell Mexican built cars to the Canadians as if they were American for the purposes of tarriffs.
And John Howard has just signed Australia up for an FTA with America - smart move John, we'll be thanking you for that one for the next 50 years. The only hope Australia's got IMHO is to sign a FTA with China & threaten America with mutually assured destruction if they try to play fast & loose with the terms of the contract. Note - first ever correct usage of the word "loose" in the history of slashdot
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Re:Close the tax loophole? (Score:3, Insightful)
Lower wages equates directly into lower taxes. You may not have noticed but the government taxes your wages. The less an employer pays for an employee the less taxes the government gets. Not to mention the secondary issues, such as the fact that overseas workers won't be paying US sales tax on bought goods.
Re:Close the tax loophole? (Score:4, Insightful)
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Re:Close the tax loophole? (Score:3, Informative)
A WSJ journal article about this is posted here [interesting-people.org].
Re:Close the tax loophole? (Score:3, Informative)
decent article [theroyalgazette.com] on the subject.
It's not about outsourcing jobs so much as tax sheltering.
Re:Close the tax loophole? (Score:5, Informative)
* Companies do not have to pay US taxes on foriegn operations, until (unless) they bring it back to the US.
* If you pay taxes in another country and the US you can get deductions on your US taxes to account for this double taxation.
These two individually are not that bad, but thanks to the complexity of the tax code and fancy book-work a company can take advantage of both simultaneously. Ie they pay taxes only in the foreign country on their foreign operations, but at the same time, they get deductions in their US taxes, even though there is no double taxation. So essentially the US tax payer is paying part of their foreign taxes for them. This is what Kerry means when he says he want to close loop holes that force you to subsidize the outsourcing that is taking your job.
He plans to simplify the tax code, which as you said would bring in some revenue, and use that to decrease the overall corporate tax rate. It would also illiminate the relative penalty on bringing money back into the country, verses keeping it (and thus investing it) abroad. I can't find the document I read that explained this plan well - both the bullet point, and detail plans currently on the John Kerry site are fairly vague.
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Call Centres (Score:3, Funny)
Good thing there's only Call Centres in Canada, then. (Spelling loophole?)
Thats transitivity for ya (Score:5, Interesting)
Also please remember that the US has spent the last twenty five years literally ramming free trade down the world's collective throat (admittedly, an effort made on behalf of the financial elite, not workers).
Re:Thats transitivity for ya (Score:4, Funny)
Like "deregulation" and "privatize", the term has been twisted by the politicians to prevent the public from ever wanting it. It's orwellian language redefining in action.
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give me a break (Score:5, Insightful)
First off I'm voting for Kerry, but the idea that new legislation is going curb the tax advantages of outsourcing is ludicrous. So lets say Kerry does pass such a bill, what will happen? Large companies will simple open up offshore subsiaries to skirt the law, similiar to what Haliburton did under the leadership of Dick Cheney, by having a Caymen islands phantom corporation in order to business with nations like Iran.
Add it to the list of apologies (Score:5, Funny)
from an old episode of This Hour Has 22 Minutes
An Apology to Americans
By Reporter 'Anthony St. George' (Performed by Colin Mochrie)
Hello. I'm Anthony St. George on location here in Washington.
On behalf of Canadians everywhere I'd like to offer an apology to the United States of America. We haven't been getting along very well recently and for that, I am truly sorry. I'm sorry we called George Bush a moron. He is a moron, but it wasn't nice of us to point it out. If it's any consolation, the fact that he's a moron shouldn't reflect poorly on the people of America. After all, it's not like you actually elected him.
I'm sorry about our softwood lumber. Just because we have more trees than you, doesn't give us the right to sell you lumber that's cheaper and better than your own. It would be like if, well, say you had ten times the television audeince we did and you flood our market with great shows, cheaper than we could produce. I know you'd never do that.
I'm sorry we beat you in Olympic hockey. In our defence I guess our excuse would be that our team was much, much, much, much better than yours. As word of apology, please accept all of our NHL teams which, one by one, are going out of business and moving to your fine country.
I'm sorry about our waffling on Iraq. I mean, when you're going up against a crazed dictator, you want to have your friends by your side. I realize it took more than two years before you guys pitched in against Hitler, but that was different. Everyone knew he had weapons.
I'm sorry we burnt down your White House during the War of 1812. I see you've rebuilt it! It's very nice.
I'm sorry for Alan Thicke, Shania Twain, Celine Dion, Loverboy, that song from Seriff that ends with a really high-pitched long note. Your beer. I know we had nothing to do with your beer, but we feel your pain.
And finally on behalf of all Canadians, I'm sorry that we're constantly apologizing for things in a passive-aggressive way which is really a thinly veiled criticism. I sincerely hope that you're not upset over this. Because we've seen what you do to countries you get upset with.
For 22 minutes, I'm Anthony St. George, and I'm sorry.
Re:Add it to the list of apologies (Score:4, Funny)
Regards,
Canada
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Pot Kettle situation (Score:5, Interesting)
Sad how ... (Score:4, Insightful)
Re:why do we care what kerry said? (Score:5, Interesting)
Slashdot is not a TV or radio network. There is no reason for it to give "equal time" or avoid showing bias. It's "news for nerds" - it doesn't claim to be nonpartisan (or partisan).
The internet is not the same as other "media outlets", and Slashdot has no "responsibility" to be any certain way.
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Re:why do we care what kerry said? (Score:4, Insightful)
Except that it used to be a place to read about really cool stuff, really neat stuff, things on topic for the online community, not stuffed with politicking. And maybe you don't mind Taco's obvious bias, but it gives me agita, and I don't need it. I want my old Slashdot back! Maybe things will be back (or closer) to normal after the election.
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Re:why do we care what kerry said? (Score:3, Interesting)
It's a fact that outsourcing is a hot issue (for some). It's a fact Kerry has made that statement a number of times that he'll fix it. Will he? Can he? What is he going to fix exactly? I doubt it, but it's a pursuasive (and noteable) statement.
Now the fa
Re:why do we care what kerry said? (Score:4, Insightful)
Remarks like this cause me to think perhaps people who make 6 or 7 figures per year forget that going to school isn't particularly cheap, and that doesn't even consider the dynamics and costs of supporting yourself while taking classes full time just so that one can complete their education in a timely manner. Student loans help matters somewhat, but one has to remember that they are, in the end, just loans... and one has to pay it all back.
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Re:Unpopular consideration... (Score:5, Insightful)
Maybe in 3rd world nations were slave labour is fine
comment. Software Developers in India (including me) are paid 350 times the prevailing minimum wage in India. They aren't slaving away at all. That's the REAL reason outsourcing is working. Because the people in the 3rd-world companies are NOT being exploited. They're paid astronomical sums by their country's standard, but dirt cheap by American standards, so it works out just fine. This article [economist.com] may help. Eventually our salaries will rise (they've been rising about 6% every year for the past 5 years) and eventually the work will move elsewhere - or it might even move back to USA after y'all make a painful adjustment and decide to work for $30,000 instead of $40,000 At some point, it will no longer be worth the communication, distance and time lag problems to hire 50 Indian workers to do the work of 12 American developers. Yes the work might then be outsourced to the Philipines or China or some place but this is unlikely and I'll tell you why: The reason India is a chosen destination is population. There is just such a LARGE pool of english-speaking univeristy graduates relative to other developing nations. So philipines might take some of the work, but never as much as was shipped to India. China is unlikely, because its standard of living is already higher than India's. This means that Chinese workers are already more expensive than Indian ones (plus in terms of english-speaking people and IT China has some ways to go - by the time China catches up with India in this particular demographic its standard of living also be higher thus meaning that the price differentials between Chinese and American workers ain't too big so no outsourcing). In order for this to truly be a race to the bottom as all of you Slashdot panickers assume you would need another country of India/China's size in terms of population, with a standard of living lower than them and with a large percentage of young, university graduates that can speak the language of the western world. There is no other country. So this is what the future holds - American wages fall a little, Indian wages rise a LOT. It becomes financially unviable to outsource to India so some work comes BACK to the US, some work gets shipped to Sudan or the Philipines or Croatia or whatever and some other work stays in India. And now that India has higher wages, they start buying more developed world products, trade increases, your economy picks up again blah blah. But yes, if you're a software engineer, it'll be hard to find a job for the next 5 years or so - this all hinges on how fast Indian wages rise, and how fast American wages fall. If Americans are willing to work for less, then less jobs will be outsourced. I'm not saying you SHOULD be willing to work for less, I'm just stating the facts.
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Sigh. Slashdot libertarian economists. Sheesh. (Score:5, Insightful)
It is a sink or swim situation. However, when the ship suddenly plunges, it's difficult to avoid being sucked in. Your wages, your job, are dependant not just on your abilities and efforts, bu the state of the entire (in this case) American economy. Being a good mechanical engineer on the Titanic probably didn't help so much when the ship hit the iceberg.
As many people have said on Slashdot, and on more academic boards, the entire point of outsourcing is to lower labor costs. That's it. Nothing else. Nothing more. A capitalist system exists primarily to generate a return to those who own the capital. Cutting labor costs increases the capitalists returns. No, I'm not speaking from any Marxist point of view here. Read Adam Smith.
India's policies work do to the low pay of their workers. Nothing more. Not a policy choice, but a cheap labor force due to a massive and desparate population. So, do you really think American workers can compete against about two billion Indian and Chinese workers? The only way we can do that is to have our own wages plunge to a level that would be difficult for most American's to imagine.
As wages fall for workers facing international competition, wages fall in other fields. Think of this: if the automobile factory closes the next town over, business probably won't be that good. When we combine outsourcing with a taxation system that encourages the concentration of wealth, we can foresee serious structural problems in the American economy. I've tried to think of a simple way to explain this - maybe the greatest evidence is the fact that American real wages have been flat for thirty years, despite incredible increases in productivity.
Jobs are out there - but job quality, measured in wages and in hours, is falling. If your job is outsourced, its unlikely - and against economic theory - that you'll be able to find an equivalent job in the same field and roughly the same locale for the same wage. And as the Democrat's have been happily pointing out, the new jobs being created pay far lower than the ones lost.
Other employers understand outsourcing, and they'll be happy to give you a lower offer. Of course, your bank doesn't care about outsourcing and your mortgage stays the same. So does your health insurance, children's tuition, etc. So your in serious trouble.
I have a question for all of our fun Libertarian economists on /. If immigration to the US averages about 200,000 per month, and the Administration claims that 1.7 million jobs were created in the last four years, how many new jobs were available for the native population? Guys, unemployment statistics are easily manipulated. I'd recommend you visit the Bureau of Labor Statistics site and, well, read between the lines. Alos, please consider that unemployment statistics only count those who are receiving unemployment benefits. Once you've exhausted your six months, you're no longer unemployed, you become a "discouraged worker." Off the roles, out of thought. Same thing occurs if you take a low wage job - say go from being a chip designer to a chif fryer. Still counts as a job.
I have to say this: The government of the United States exists to protect the welfare of the American people, not to protect the welfare of the wealthiest American's bank accounts. And the two are not one and the same.
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