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India: The Dark Side of the Outsourcing Revolution

by Naeem MohaiemenAlterNet
January 25th, 2004

Two years ago, I lost my credit card on a trip. Dialing the American Express 800 number, I asked the polite customer rep to read the list of recent charges. As she went through each charge, I noticed something familiar about the way she said words like "Duane Reade" and "Blockbuster."

"Excuse me," I interrupted. "Where are you?"

"Oh, we're the American Express Call Center in Bangalore, India," she replied.

Over the coming months, I started noticing this phenomenon more often. When I called AOL trying to cancel my account for the fifth time, the helpful woman giving instructions was in India. Palm Pilot's "Level 1" help desk seemed to be in America, but when they were stymied and bumped me to "Level 2," an unmistakably Indian voice came on. Recently, I even started getting sales calls hawking credit cards from India.

A few months back, a new pattern began to emerge. Suddenly, the customer service reps weren't eager to divulge where they were from. "Oh, we're not allowed to disclose location," said one nervous voice. It was very cloak and dagger. Maybe it's some new security measure, I thought to myself.

Then the New York Times article, titled "We're From Bangalore (But We're Not Allowed To Tell You)" revealed all. Indian call centers now had to acquire American accents and generic Anglo names, displaying a new-found nervousness in the face of an incipient backlash: Dell was closing its Indian call center in the face of protests; New Jersey was trying to pass a bill blocking outsourcing to India; and an angry Indiana politician huffed, "I represent Indiana, not India!"

All Roads Lead to India

India is at the red-hot center of the Outsourcing Revolution. Thirty percent of all new Information Technology (IT) work for U.S. companies is now done abroad, mostly in India. McKinsey Consulting estimated that three countries received $20 billion in outsourcing revenue from the U.S. in 2002: Ireland ($8.3 billion), India ($7.7 billion) and Canada ($3.7 billion). Analysts forecast that by 2008 Indian IT services and back-office support will grow to a $57 billion a year industry with four million workers.

International multinationals have had offices in India for almost a decade, and they include Morgan Stanley, Citigroup, Intel, IBM, Cisco, Motorola, HP, Oracle, Yahoo, Ernst & Young, HSBC, and, of course, the trailblazer in "discovering" India, Microsoft. But Indian offices whose main business is outsourced work from the U.S. are a relatively new phenomenon. Recent high profile firms include MphasiS, which processed tax returns of 20,000 Americans this year (analysts predict that 200,000 U.S. tax returns will be processed in India next year). Then there is OfficeTiger, which employs 1,200 people to do research and analysis for eight Wall Street firms. Finally, GE Capital's four Indian centers design statistical models, prepare data for GE annual reports, write software, and process $35 billion of global invoices.

India dominates outsourced IT, accounting and financial services. Ambitious firms have now expanded to food-stamp paperwork, auto engineering, drug research, airline industry and work for the U.S. Postal Service. India has two key strengths: hundreds of thousands of technology graduates each year and the use of English at all stages of education. Armed with this combination, India's potential is huge as knowledge-based service work expands. China dominates in manufacturing, which is only 14 percent of the U.S. economy. By contrast, the service industry, where India has laid its stake, makes up 60 percent of the U.S. economy.

White Collar Labor Wars

Of course U.S. firms are not outsourcing work out of benevolent desire to help Indian workers. These new moves come in an ever-expanding desire to cut costs and increase profit margins. The stage is set for a struggle between western and Asian white-collar labor. Just as the success of H-1B visa workers during the Internet boom led to an anti-immigrant backlash, the outsourcing revolution faces its own pushback.

Critics argue that every time a project is outsourced, jobs are lost in the United States. Estimates vary from a projected loss of 600,000 jobs by 2005 (Forrester Research) to 2 million by 2008 (Deloitte). But it is also impossible to calculate how much of these job losses are also an effect of the overall recession.

As anger builds over claims of lost jobs, American unions have emerged as aggressive opponents of outsourcing, and their rhetoric often displays thinly disguised xenophobia. Even inside the U.S., unions create their own hegemonies, often leaving immigrant-dominated industries out in the cold. When it comes to a globalized labor market, "workers of the world unite" is not their motto. TechsUnite.org (CA), Alliance of Technology Workers (WA) and Rescue American Jobs have all been pushing politicians to pass "Buy American" legislation to limit federal agencies from sending jobs overseas. In New Jersey and Indiana, bills to outlaw shifting state jobs overseas were narrowly defeated. Maryland, Michigan and North Carolina are planning similar legal battles in the future. Incessant complaints about "bad service" and "strange accents" forced Dell Computers to shut down one of its call centers in India, representing a major victory for the "America First" lobby.

A Dilemma for the Left

The traditional left has been caught off-guard by the outsourcing debate. It is very hard to make the argument that Indians are being exploited. Studies show that jobs in outsourcing firms are some of the most highly sought-after, and often pay much more than jobs servicing the local economy. There is still a knee-jerk reaction among Indians, reflected in editorials that deride these workers as "cyber-coolies."

But does that jargon apply everywhere? As hordes of freshly minted IIT graduates put on their starched white shirts, or crisp salwar-kameez, and march into brand-new "cyberpark" offices in Bangalore, are they really anybody's "coolies?"

Not everyone accepts the unions' arguments. In England, George Monbiot in the Guardian applauded the irony of the new power structure: "Britain's empire is striking back. Former colonies have found a silver lining in the bitter legacy of conquest: English, the language of former masters, is a competitive advantage in the global economy." After Norwich Union sent one of their centers overseas, a spirited debate erupted on the BBC website. From London, Theresa Law wrote, "Give me an intelligent, well-educated, polite Indian on the end of a telephone handling my customer queries, over an ignorant, rude, unhelpful and unwilling British call handler any day!" In reply to numerous e-mails about "stolen jobs," Henry wrote, "What a breathtaking display of economic illiteracy and downright racism. Why shouldn't people in India have a crack at earning a decent living if they can do it more effectively than can be done in the UK?"

Outsourcing is an incredibly complex economic and ethical issue, with winners and losers on both sides. Yes, why shouldn't Indians (and by extension, my native Bangladesh) have a chance to improve their living standards through hard work? On the other hand, as thousands of jobs are lost in the West during the present recession, much of the blame will fall on outsourcing. But free trade means the flow goes both ways. If the West demands open access to global markets for its exports, doesn't the Third World have the right to demand free access to labor markets?

Finally, the unions need to make the connection between outlandish CEO salaries and lost jobs. Outsourcing is not the only reason for all worker woes. To take one recent example, if Boeing were to ever open a factory in India, many would scream about "lost jobs." But aren't far more jobs going to be lost to cover the damage from the Pentagon contract kickback scandal, which has already led to the resignation of Boeing's CEO?

The Human Face of a Global Economy?

In this ongoing debate, a startling new entry is a multimedia theater piece "Alladeen," now touring the U.S. after a successful run in England. Produced by England's Motiroti and multimedia wizards Builders Association, the play is an antidote to media stories about faceless Indians taking jobs away.

Call centers are the Ground Zero of the outsourcing debate. Because western customers have to interact directly with an operator in India, all of the coded racism, and anxieties come boiling to the surface. In previous recessions, similar misdirected hostilities targeted H-1B visas, green card holders and other shades of new immigrants. But because the targets were inside the country and able to lobby for their own rights, demonizing was not easy (witness the death of California's Prop. 187).

In this new battle, the targets are in a distant high-tech call center which makes it much easier to scapegoat and destroy. There is a subtle interplay of racism in this whole debate. Would outsourcing be a political hot potato if the jobs were going to Norway, Israel or Portugal? In fact, no one complains about job loss to Ireland, even though it is the global leader in outsourcing.

"Alladeen" tackles this issue head-on. Through a combination of actors, simultaneous video displays, computer screens and taped video footage from a real-life Indian call center, the play breaks through the clutter of economic and ideological debates. Finally, the anonymous Indian at the far-away call center is given a voice, a name and a life. We see what is created, and also what is lost.

Alternating skillfully between documentary footage and re-enactments, "Alladeen" takes the audience through the life cycle of a call center. We start with the training sessions, where eager Indian graduates are told to neutralize "mother tongue influence." A white supervisor explains that Indians always say "w" for "v" and then patronizingly adds to one candidate, "There's no extra marks for going fast. I'm not going to give you a chocolate bar." Just as Indians rote-memorize scientific facts in high school, these trainees memorize city names, to "switch on and off" American accents and learn cultural facts ("potatoes are important in Montana"). Overhead projectors are used to explore football ("the pork skin"), baseball ("a model of sacrifice") and TV shows that tap into the zeitgeist of a city ("Ally McBeal" for Chicago, 'Buffy' for California and 'Friends' for New York).

Later, each freshly minted trainee will channel their favorite "Friends" character. But are they creating an illusion for the caller, or living in a dream world of their own? One where they live on "Central Perk West?" In this phase of cultural globalization, "being American" is a job requirement even if some "real" Americans want nothing to do with you.

As the trainees become more confident, they deal with stoned callers, buck-naked pranksters and suspicious matrons. Internet websites flash trivia about the callers' hometown, and eagle-eyed supervisors monitor every call all is perfectly calibrated to give the caller the impression they are dialing their neighborhood call center, and talking to a cheerful Phoebe, Monica or Chandler.

But all contradictions are laid bare when "Phoebe" receives a call from an Indian-American from Redwood City. Even though she recognizes a fellow Indian, protocol demands that she lie and say "I'm in New York City." Discovering that the man is a software engineer, Phoebe tries to ask him about life in America.

Disguised half-questions are blurted out in the tiny window of opportunity before the call ends. Finally, desperately trying to semaphore her own situation, Phoebe blurts out, "But is it easy there? I mean what if you were Indian?"

"My dear!" comes the puzzled reply, "I am Indian!"

Alladeen's most poignant moments are in two real-life documentary clips. In one segment, the Bangalore call center operators are asked, if they had one wish, what would it be. The answers come rushing out: To be "handsome," "rich," "five inches taller," "married." But one exhausted operator, who talks earlier about the grind of the midnight shift, can only look at the camera and say, "I wish this were a nine-six shift!"

In the other segment, an operator named Aarthi Angelo talks about the endless quest to hide Indian accents: "People are so sensitive to accents. Especially after the World Trade Center incident, people started asking me, are you Muslim? You know, we've been taught to transcend barriers of caste and religion. But here we had to answer that question." Then after a pause, she adds, "Even Muslims had to say, no we're not Muslims!"

Outsourcing will continue to be debated at union meetings, political rallies, Senate chambers, Fortune 500 seminars and journal pages. Yet, Alladeen succeeds in painting a picture that is often missing from this debate over globalization. The show puts a human face on a complex economic system, highlighting both the gain and loss for each human player.

The last word goes to Simon, another visitor to the BBC website: "What we are seeing is capitalism working in a totally uneven playing field and it will carry on until the playing field is evened out. That is going to be a long and painful process and the world simply isn't going to be able to support its entire population at the standard of living we would like to continue to enjoy."

Naeem Mohaiemen is a historian, media activist, and the editor of Shobak, a magazine devoted to South Asian issues. Additional research for this article was provided by Udayan Chattyopadhyay.





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