It started about two decades ago and the problem has only progressed to where it is today. Mass recession and unemployment. The problem can be summed up in three words; Business Process Outsourcing otherwise known as BPO. What exactly is it? It’s not just another business acronym, but a very serious problem and trend that continues to haunt not just America, but every other First World Economy today.
What is BPO? Simply, it’s the process of taking your job and outsourcing it to a third world country where the labor is cheaper. BPO has made many other economies rich. India, China, Pakistan, and many more too countless to name. The lure of lower expenses and higher profits are the drivers of BPO. It’s a problem that isn’t going to stop until we do something about it.
This is not a call just to Americans, but to the citizens of the world. If we stop investing in our own economies, we’re dooming ourselves. Did the teamsters have it right when they talked about the whole concept of, “Made In the USA”? Yes. While they were just primarily looking at protecting their jobs, they were also protecting the economy. We obviously didn’t listen (and really don’t continue to listen today).
Take a look at the last 10 years. The advent of VOIP as a viable communications technology combined with cheap labor and exploitative practices of employees produces what many executives in business today call “profits”. The problem has to do with the concept of “torturing the numbers” until they tell the truth. It’s about holding a certain margin percentage in profit. In otherwords, forget about the economy, forget about the fact that people are losing jobs, just hold the margins and do whatever it takes. This is the mentality that we award on wall street. It’s not about the wholesome family values where an employee was more than just a number.
Let’s talk some metrics shall we? Just to give the layman an example. Assuming a company has a call center staffed with 100 employees paid an average of $15.00 per hour, that’s roughly $72,000.00 per month in labor expense. This assumes the employees get healthcare and benefits. If we do a BPO deal, we could lower this by almost 50% to 36,000.00 per year. Why? In India, for example, a college-educated person who speaks english can get a job paying $4.00 US per hour. They’ll work without benefits, ridiculous hours, and endure the type of mental and physical abuse that is otherwise considered illegal in developed countries. The BPO company will mark that labor up 80-100% and still make a ridiculous profit. They’re based off-shore and the revenue is transferred to that third world country entity at favorable tax terms. Why? Would India’s government not want that revenue flowing into their economy!?!!
This directly affects America’s (or your country’s) economy, because the paycheck for that employee is now being spent in India, Pakistan, China, etc.. You get the idea. Anywhere, but here at home. Small business loses those dollars and have to downsize (cut jobs, close offices, cut costs). This is the vicious reality of BPO.
How has this affected us? Look at our economy. People are being cut out. Children are going hungry and Families destroyed. Am I being overly dramatic? I highly doubt it. I’m one of those people, but I’m going to survive, because I adapt.
This is a wakeup call america. If we continue this bullshit with BPO, we’re going to be more repressed than the USSR and the “Final Fall” of that Empire. We have to stop supporting companies that outsource. We have to place taxes on Foreign Labor Outsourcing (20-30% at a minimum) or we have to guarantee standards of work . We’ll put food back on the table and insure a growing economy again.
The single biggest mistake Obama made (and I really like the guy) is that he embraced BPO indirectly when he held a dinner for the Prime Minister of India. Are we doing so well that we can afford to send our payroll dollars elsewhere? Last I checked, the answer was no.
Our future success is in innovation. It’s in supporting the dream that anyone can make it with an idea and hard work here in America. If we continue on the path we’re going down, we might as well get on the soup line now.
I’d like to end this posting with a personal note. I don’t hate anyone not in our country (like India, China, Pakistan, etc). I’m a Chinese American myself, but the reality is jobs are decimated and families destroyed, because of these unfair business practices. This was the problem in America and we evolved beyond it. The problem was called slavery. That’s right.. I said it. Supporting BPO is basically supporting slavery. If you don’t believe me, just look up some of the comments from people that work in these BPO call centers off-shore. They all tell the same story. They’re treated like crap. I personally know a person who works in India at a BPO call center. He tells me the supervisors have been known to beat their employees (in the past). Sadly, this call center is owned by a very large BPO provider doing business for quite a few publicly traded companies.