I knwo that i've not been around for quite some time now. Actually did try to make a post a few minutes back and lost it after i'd typed it all out and didn't have the will to retype the whole thing. So i'm just pushing an essay that i'd written as an entry 2 'The Economist'. Needless to say - i didn't win a single dollar. Man - those $20,000 would sure have solved a lot of my problems - about 860,000 of them to be more precise ;-) Now onto the essay. It is my 1st attempt at anything like this. So please - no sniggers! And the whole thing is intended to be an easy read and try present to the layman a fair picture of the issues surrounding the great debate on 'Outsourcing'.
TK, Priya and Cuckoo - thx for all the suggestions u made.
J and K
Senators J and K were classmates and debating foes right from their days as undergraduate economics majors at Yale. They have, since then, been on opposite sides of any argument they both happened to be involved in! The national debate on whether we should “Import workers or Export jobs” has, perhaps not unsurprisingly, seen them take opposite sides yet again.
Dear J,
I am writing this in response to your open letter to the President urging an increase in the number of immigrant workers allowed into our country each year. While I respect your view, let me state that I am firmly against this (stand). I feel that any labor or skill shortages that we face should be tackled by exporting jobs, and not by importing workers!
My arguments against your position can be summarized as follows:
Labor is cheaper elsewhere. This is obvious as migration would be attractive only if we have higher wage levels; unless there are other compelling reasons for migration like chronic unemployment in their home country. Since labor is cheaper elsewhere, we ought to take advantage of this by shifting those jobs that can be moved. Software development is a good example of this where the industry keeps clamoring for more and more immigrant workers because of a shortage of skilled labor. We would gain more by moving such jobs offshore. Some might argue that this would only serve to fatten the bottom line of a few corporations. I would say that such an argument is naïve, and ignores the fact that such savings that may accrue can be invested in more productive avenues such as R&D, or in new technology that could yield multiple gains in productivity and innovation. This would in turn ensure the competitiveness of our industries, and would ensure continued strong growth of our economy. Needless to say, this would also result in creation of new, higher skilled, better paying jobs.
At the risk of sounding xenophobic, let me move on to the very real issue of cultural differences, which make assimilation of immigrants into mainstream society difficult. Let me relate a conversation I recently overheard between a young woman, who looked Asian, and somebody who appeared to be her colleague.
“I can’t come to a bar! My dad doesn’t like me going to places like that”.
“But Sita, it is a cocktail lounge and restaurant where perfectly respectable people go for lunch, and this lunch is supposed to be in your honor!”
Now I am not saying that this young woman is a threat to the American way of life. But that she’d be happier, if she could have done the same job from her home country. She is obviously having trouble adjusting to life here. Not every immigrant would have such difficulty. But ask yourself what we are asking them to do when they accept alien cultural norms. Is it fair on our part to expect people to give up beliefs and customs they have held dear all their life? Yet, if they don’t change, would it be possible for them to lead normal lives without being torn by minor conflicts everyday? I am not sure what the answer is to this question, of whether people should cling to their past or embrace change, and I am not sure that I do have an answer. I am just raising the question.
We also have to think of other countries when we encourage immigration. These countries have invested (possibly public) money to train people and we are trying to reap its benefits without giving them anything in return. In a country like India, which spends millions on subsidizing higher education, there is, every now and then, huge public debate about what they call ‘the Brain Drain’. Some claim that the best engineers, doctors and scientists are immigrating as soon as they graduate; defeating the purpose of educational subsidies intended to develop a big pool of highly skilled labor; and that in effect the Government of India is subsidizing Silicon Valley! Looking at the abundance of Indians in Silicon Valley and their contribution to its growth, I am inclined to be sympathetic to this line of reasoning.
For argument’s sake, assume that we do encourage more and easier immigration. Is the INS equipped to handle it? Even now, the wait for citizenship or green cards is long and frustrating. As for how effective screening of immigrant applications is, at a time when national security is facing unprecedented threats, I must admit to having my doubts. Modernizing the INS is a possible solution. One can even argue that this is something that must be done, and we can not use lame excuses like insufficient infrastructure to process immigration applications as a basis to discourage applications! But the reality is that enormous budgetary support will be needed to reform the INS, which we can ill-afford with the budgetary deficits that are looming over us.
I hope I have left you in no doubt of my position!
Sincerely yours,
K.
K's response
Dear K,
While I have been clearly apprised of your strong, if somewhat extreme, views on the topic, I find that I am not in agreement with your views. Let me clarify why I remain unconvinced that exporting jobs is preferable to importing workers.
Some jobs that, by their very nature, can not be done remotely, except with great loss in productivity that would neutralize any gains from wage arbitrage. These jobs can not be exported. I see that even you endorse this view. Turning our attention to jobs that can arguably be done as well offshore, let us examine if immigration does help in any way other than in overcoming temporary shortages of skilled labor? How about the innovative potential that is untapped in immigrants? Most of the highly skilled immigrants would have had no access in their home country to the facilities that are available to them here. In activities like research and entrepreneurship, your access to resources is a crucial ingredient to success. Your example of Indian entrepreneurs in Silicon Valley serves to prove this point. How many of them would have been successful if they had remained in their home country? One can’t help but wonder. Another crucial reason for their success might be that in today’s knowledge economy, there is often a ‘critical mass’ (for want of a better phrase) of intellectual capital that is necessary for innovation. A congregation of brilliant minds at one place makes the whole greater than the sum of the parts. Why else is Silicon Valley still the heart of technological innovation and not Singapore or Bangalore? While communication has made giant leaps, human beings are still limited by their ability to communicate through technology as compared to live interaction and debate.
Coming to cultural adaptation, I feel strongly that the culture of any nation is positively affected by the influx of new cultural influences. These might range from the adoption of ‘Chicken Tikka Masala’ as their national dish by the British to the fusion of styles in art and cinema or even on Broadway; like the cultural crossover musical “Bombay Dreams”. Positive influences from any culture are invariably adopted, sometimes after being localized to some extent, but adopted nevertheless. The same goes for immigrants. They are mature individuals who are free to decide which parts of their tradition to cling to and which parts to forget or replace. New York is not known as a cultural melting pot for nothing. Imagine NY without its Pakistani and Indian cab drivers. It just wouldn’t be the same!
The changing demographics in the developed nations are a major cause for concern for these economies – particularly ones with a pay-as-you-go social security system like the US. With the baby-boomers approaching retirement and looming budget-deficits, I can’t help but wonder how (or should I say, whether) our social security system and healthcare will cope! Immigration offers us an easy solution to this vexed issue. There are cultural and political compulsions that make this difficult to implement. However, an aging population and spiraling healthcare costs offer us little choice. A stable demographic profile is the only way a pay-as-you-go system can work, unless people are willing to settle for significantly lesser benefits than those enjoyed by their predecessors. This would seem unacceptable to those who paid during their working life and now feel entitled to the same level of benefits as those that they helped pay for. Would it even be fair to ask people to accept any less than what they are rightfully entitled to?
Then there is the effect of the multiplier effects of spending by immigrants. It is said that in Bangalore, more millionaires have been made by those offering catering and support services to IT companies than the IT companies themselves. Increased levels of disposable income have transformed this once sleepy town to a bustling metropolis dotted with malls, restaurants and pubs. Migration, instead of exporting jobs, can help the economy immensely through the cascading effect of the immigrants’ spending on houses, food, cars, consumer durables etc. Increased consumer demand in this manner would bring a strong demand led boom that could lead to more job creation in our country.
Having concluded most of my arguments based on economics or logic; allow me the indulgence of making a partly emotional appeal in the end. One of the major reasons for the continued economic predominance of the United States during most parts of the latter half of the twentieth century is the continuous stream of innovations that enabled the economy to continue on a growth path fuelled by increasing productivity. These innovations were in part due to the influx of immigrants. The US has continued to attract immigrants from all over the globe throughout its long history as a center of Capitalism and Democracy. Can we now turn away immigrants who come to this great country, the ‘Land of the Free, Home of the Brave’, seeking asylum? The tired, the poor, the huddled masses yearning to breathe free, the wretched refuse of their homeland’s shores. Closing the door on immigration would sound the death knell on this country and all it stands for! In President Roosevelt’s immortal words “Remember, remember always, that all of us... are descended from immigrants and revolutionists”.
I hope that this would help convince any skeptics who still doubt the wisdom of encouraging immigration.
Yours sincerely,
K
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