U.S. Stimulus Package and the Outsourcing Industry

U.S President Barack Obama signed the $787 billion recovery package into law with a statement that it would "set our economy on a firmer foundation."

Well, all sounds good and cheesy as said! Claims were made that the proposed bailout was the need of the hour and that it was needed very badly and a failure to do so will turn the economic crisis into a catastrophe. But one question everyone had was the moral dilemma that faced the Congress and the White house in the question that if the recipients of the stimulus package should continue to outsource jobs :-). The main objective of the bailout plan was in the creation of jobs for Americans.

Will American citizens only be the sole benefactor of the bailout package? Outsourcing companies outside the U.S. including here in India and the Philippines benefited from the demand of manpower for jobs in consumer services like jobs in research, bill payment and collection, credit analysis and investment banking. The logical conclusion was that companies should be allowed freedom to manage as what they may deem good for their business. Every outsourcing company cannot possibly take all the jobs that a U.S. company requires.

In an era where companies need to stay competitive, not to earn big but just to survive, outsourcing can complement the operations of a company as it is an efficient way to run the company’s operations. The first step a troubled company takes is to save money and instantaneously reduce cost. A company should compare their operations to their competitors to see exactly what is lacking and continuously adapt. There are issues that the stimulus package is not a debate on protectionism and taxpayers are not served well with the continuing export of jobs by the very companies that need the bailout package. The jobs from financial institutions that are in the center of attention are in research, banking and back office.

Meanwhile, President Obama is also aware that revolutions in communication and technology has sent jobs to any place in the world with Internet connection and according to him the fact that the world is more competitive cannot be reversed. Outsourcing of American jobs overseas cannot be reversed and U.S. workers need to compete for jobs with other people on the other side of the globe. This is how globalization is defined. The government must invest in research and innovation to create jobs and industries as the country’s problems on economic front cannot be overcome by building protectionist walls.

In contrast what is speculated to happen in the next couple of months is that, the H1-B's will be laid off in the U.S. This laid off workforce, will be re-hired in India to a great extent in the coming months due to outsourcing by the U.S firms.

Lets wait and see how much the U.S can manage without the H1-B's in general.