- WASHINGTON (IANS) -- The
number of workers in India performing computer jobs for U.S. companies
will increase seven-fold from 177,000 in 2002 to 1.2 million in 2008, says
a new study.
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- A typical casualty of this growing trend of outsourcing
jobs to India is the northeastern state of Connecticut - part of the Tri-State
area - where the job market is expected to be the hardest hit, says the
study done by Economy.com, a Westchester, Pennsylvania based firm.
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- "In the new world order, jobs are increasingly transportable,
and will migrate to low-cost regions in order to boost corporate profits
and business productivity," said Don Klepper-Smith, economist at New
Haven, Connecticut-based Scillia, Dowling & Natarelli Advisors -- a
prestigious law firm.
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- And Connecticut's tech workers will be hardest hit by
the change, said Klepper-Smith.
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- The state's sluggish job growth rises out of the business
cycle, the use of technology to replace people at jobs, and the replacement
of skilled domestic workers with cheap foreign labour, he said.
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- The job market for workers in computers and information
technology is getting tougher in Connecticut, compared to other U.S. states.
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- Klepper-Smith said the state has a concentration of financial
and insurance firms that have heavily relied on offshore outsourcing to
reduce labour costs.
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- Klepper-Smith partly based his views on the Economy.com
study, which suggests that many computer-related jobs produced by U.S.
companies will go to Indian companies that can do the work at lower cost,
according to a report in the New Haven Register, a local newspaper.
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- In 2002, the business process outsourcing sector employed
171,000 people in India and brought in $2.4 billion in revenue, based on
estimates by the National Association of Software and Services Companies
(Nasscom).
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- Economy.com's forecast showed that offshore outsourcing
will double that sector in India to 400,000 people in 2004 and triple the
revenues to $6.1 billion. By 2008, the business process outsourcing (BPO)
field will employ 1.2 million in India and haul in $23 billion in revenues.
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- Klepper-Smith said he expects to see structural changes
in the job market.
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- Other economists say that available data does not give
a clear or convincing picture about trends in IT employment.
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- Ed Deak, an economist at Fairfield University, said that
job data does not track unemployment trends among IT workers specifically.
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- Deak expressed doubt that Connecticut would be hit disproportionately
because the state does not have a high enough concentration of software-related
jobs.
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- The real crisis, Deak said, is taking place in factory
jobs. Manufacturing employs 200,000 people in Connecticut, less than half
of the 420,000 it employed in 1983, he said.
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- John A. Bauman, president of the Organisation for the
Rights of American Workers in Meriden, said that IT workers are suffering
an undocumented jobs crisis because they often work as temporary workers,
contractors and consultants.
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- That makes many ineligible for unemployment compensation,
he said. "What doesn't show up in the numbers are the IT contractors.
They aren't eligible for unemployment. They show up nowhere," Bauman
said, according to the news report.
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- The Organisation for the Rights of American Workers estimates
that unemployment among the state's IT workers reached 27 percent in May.
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- In recent years, Connecticut has developed a strong tech
economy. In 2001, the software and IT sector employed 66,000 in the state.
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- Each of those jobs added another 2.3 jobs to the state
economy, based on a study published in April 2003 by the Connecticut Technology
Council.
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- The study, conducted by the Connecticut Centre for Economic
Analysis, said that the software and IT sector, through multiplier effects,
employed 13.2 percent of the state's work force.
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