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October 14, 2004

Pitt Symposium to Examine job Outsourcing

Some trade experts and economists predict that U.S. job outsourcing to overseas destinations will account for no more than 1.5 percent of the jobs in the United States during the next 15 years, according to a recent article in The Wall Street Journal.

Other economists question that estimate. Still others say job outsourcing is a win-win situation.

For information technology (IT) workers who lost their jobs to India or machinists who watched their manufacturing jobs migrate to China, the statistics mean little.

Pitt scholars and others will try to explain the phenomenon from international and local perspectives with “Good, Bad, or Somewhere in Between? Outsourcing to India and China,” on Thursday, Oct. 21. The symposium, sponsored by the Asian Studies Center, will focus on how outsourcing plays out in China and India as well as the United States, according to Katherine Carlitz, assistant director for academic affairs in the Asian Studies Center, part of the University Center for International Studies. “What we really want to do is get a clearer understanding of the outsourcing phenomenon from various points of view. We’re not taking a position on whether outsourcing is good or bad,” she said.

To begin to understand outsourcing, the number of jobs actually leaving the United States needs more thorough tracking by the government, according to one of the featured speakers, Ron Hira, assistant professor of public policy at Rochester (N.Y.) Institute of Technology and chairman of the Institute of Electrical and Electronics Engineers-USA Career & Workforce Policy Committee.

“What we do know is that there will be winners and losers in the United States,” Hira said recently in article he wrote for the San Jose Mercury News. “Many American workers and organizations will suffer,” he wrote. “The question is how to find effective ways to mitigate its significant negative impacts.” He added that Congress should rethink how U.S. workforce assistance programs can best help displaced high-tech workers become productive again. “That is no easy task. What exactly will you retrain people to do?”

Speakers from Pitt will present international perspectives of outsourcing to China and India, two major destinations of American job migration.


Pitt professor of economics Thomas Rawski has spent more than 20 years studying the development and modern history of China’s economy. According to Rawski, China’s status as the fastest growing economy in the world has been long in the making. When he visited China’s economic zones – special areas designated for industry and attracting foreign businesses – he didn’t think the Chinese managers knew enough to pull it off 20 years ago. But despite Rawski’s first impressions, the Chinese now have thousands of people with expertise in building.

Given the relatively inexpensive labor costs and developed industrial zones, foreign industries are discovering they can reduce costs substantially by moving part or all of their operations to China, Rawski said. Computer technology, primarily the Internet, makes it possible for even small U.S. manufacturers to buy some of their components overseas. “They can manage all this by a computer with tracking software, which is cheap,” he said.

And Rawski notes, China’s gaze continues to turn to the U.S. markets. For example, a Chinese auto parts company recently bought a U.S. auto parts company, he said. “It’s clear what they want to do is sell auto parts to companies like General Motors.” Essentially, the Chinese auto parts company is buying the knowledge of the U.S. company.

“Immediately, they have people who are in touch with people from GM at every level, every day,” he explained. Additionally, Rawski said he has fielded inquiries from Chinese businessmen looking to purchase a steel company in the Pittsburgh area. Rawski concluded: “There’s going to be more and more of this.”

For Sweta Saxena, assistant professor, Pitt Graduate School of Public and International Affairs and a native of India, who specializes in international economics, the exodus of IT jobs to India was a natural progression, starting when American companies hired IT professionals from India to help with the millennium computer glitches. Soon after working with the Indian IT professionals, companies realized they could save money by moving the jobs to India, she said. Saxena credits the rise of Indian computer excellence to IAT, the India Institute of Technology, which is subsidized by the Indian government.

In addition to IT jobs, American companies have moved call centers for credit card collection and other services such as X-ray reports and accounting to India. “The biggest thing I’ve seen in the last year as these companies have moved to India is that it’s easier for Indians to get good jobs and higher pay,” she said. But as standards of living and wages increase in her country, Saxena cautioned: “If wages keep increasing, some of the jobs will move from here to China.”

The Oct. 21 symposium will be held from 3 to 6 p.m., two Mellon Center, 501 Grant Street, Room 1150. Presentations include: Steven Husted, Pitt professor of economics, “Outsourcing: A Survey of the Issues”; David Iwinski, CEO of ACUSIS, “The Practical Realities of Offshore Outsourcing”; Ronil Hira, assistant professor of public policy, Rochester Institute of Technology, “The Impact of Offshore Outsourcing on American Workers”; Thomas G. Rawski, Pitt professor of economics and history, “Reform, Restructuring and Employment in China”; Sweta Saxena, Pitt assistant professor, Pitt’s Graduate School of Public and International Affairs, “Perspectives on Outsourcing to India”; William Brustein director, University Center for International Studies, and professor of history, political science, and sociology, will present concluding remarks.

Filed under: Feature,Volume 37 Issue 4

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