Thursday, August 17, 2006

You can't legislate a living wage, you have to EARN it.

As I examine all the ways that US business could compete with Offshore BPO outsourcing, the one thing that keeps coming up is that American companies can't beat the pricing that Offshore providers can offer. Salaries of 20,000.00 per year are commonplace in nations that support offshoring. This makes stateside, labor for labor comparisons almost pointless. Clearly US business and Offshore outsourcers of business processes are taking advantage of the disparity between standards of living between two nations.

I think that right now, you are probably going.....duh..... However lets examine this trend. If you consider that there is a finite amount of wealth in the world, and that assets shift according to where free markets roam. The US is on the incorrect side of an ever-increasing curve. As countries that support Offshore outsourcing gain in terms of labor, wealth and market share, the opposite relationship must occur on the other side of the curve. This means that the US must prepare for deflation of wages in order to balance out the gap between nations.

So, when I see things like this It proves to me that politicians are not governing for our future. They are merely satiating the panicked crowd. The reality is that you can't legislate what the free market is creating. You can't just swipe a pen and balance the massive gap between the standard of living in India and the standard of living in the US. As long as the ability to exploit these two differences using the revolution of technology communications exists, it will continue to erode the ability for wages in the US to evolve. Forcing stores to support a living wage without chaining the economic landscape just means......Less jobs. As companies close stores in areas that require a living wage either through bankruptcy or intelligence.

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