Outsourcing has become one of the most common trends in the telecom industry. At almost every stage of the telecommunications process, jobs are held overseas, particularly in countries like India. The high-tech capabilities of the cities and the ability to pay workers very little have combined to make outsourcing extremely profitable for companies like Verizon.
In early August Verizon workers in Albany, New York were prepared to go on strike over their contract negotiations. The 1,000 workers are part of the Communication Workers of America and the International Brotherhood of Electrical Workers unions. Their main objective was to stop Verizon from outsourcing so many of their jobs.
Because of union protections, the workers received higher pay and better benefits than many others in the telecom industry. To cut costs Verizon had planned to outsource more of the jobs in Albany and around the country.
The Impact on Jobs in the United States
In the United States, the impact of outsourcing for workers has been clear. As long as lower-priced options are available, the average worker has less power in negotiations with companies and is therefore less likely to earn high wages and good benefits. In June 2008 workers classified as administrative and support staff were included in one of three categories to see the largest jump in unemployment due to mass layoffs. Most of these layoffs were caused by the company choosing to outsource those positions overseas.
Additionally, the loss of each American job that is sent overseas creates a shortage in the collection of social security taxes at a time when those funds are going to be the most needed.
Outsourcing in the telecom industry has weakened unions by giving them less leverage for workers and has diminished job security.
There have been several IT companies that have had to return their outsourced jobs to the US because of consumer complaints and other problems. In general, consumers seem leery of outsourcing because of what it means for the quality of the products and services they are receiving from companies.
The Impact on Other Countries
For those parts of the world that receive outsourced telecom jobs, conditions are favorable. With growth in many sectors of the economy, including the lucrative IT fields, the job outlook is bright in these areas. These countries are encouraged to continue investing in a high-tech infrastructure.
When wages go up in those countries, however, they will lose their appeal to US companies that look to their workforce for cheap labor. They will return most of those jobs to the US or will seek out a new country that meets their needs. As a result, job security in these countries may not be stable.
Because of the demands of the outsourced jobs, which are largely technical or service-oriented in nature, the residents of these countries are now pursuing advanced education more frequently. The countries themselves are also pouring a greater amount of money into the development of exceptional learning facilities. Some of the universities in India, for example, are among the best in the world for engineering and other fields. As a result, the outsourcing of US jobs in telecom is creating a more knowledgeable, more well-educated, and better-paid population in these countries.
While outsourcing to foreign countries is nothing new, US workers will have to continually fight companies like Verizon in order to hold onto their positions and to maintain employment. With the economic situation in the states continuing to look bleak, more companies are likely to see outsourcing as a way to cut costs and satisfy the demands of their stockholders.