January 30, 2004 - If you were unemployed, lived in Indiana and drew unemployment compensation benefits your check was processed in India, at least until Indiana’s contract with Tata Consultancy Services was terminated in November 2003. Indiana unemployment claims were being processed by Indians who paid no US income tax, no Indiana state taxes, and no property tax to support Indiana local governments or schools. The people who processed Indiana unemployment checks to laid off technology workers did not shop in Indiana stores, make payments to Indiana banks for mortgages on Indiana real estate or car loans on automobiles registered in Indiana. Tata won the contract, calling for faster processing and 24 hour web-based access to state records, with a bid $8 million lower than the two U.S. companies who competed. Bidding on the new contract has been restructured to permit Indiana companies to partner with universities and other firms so that they are more competitive with multinational outsourcing firms.

If you were covered by HMO with a provider contract with a major hospital or clinic and required x-rays or sophisticated lab work, the chances are that the results were interpreted by a radiologist or technician sitting at a computer in Bangalore. Last summer Gartner, Inc. authored a research report that predicted that 10% of American technology jobs will be outsourced overseas by the end of this year. These are jobs that Americans are trained for; jobs American’s want; and jobs Americans are doing now. The problem is that the jobs are wanted overseas where people are ready to do them for 20% of the paycheck their American counterpart commands. American companies pay no payroll tax on the foreign workers’ wages; no unemployment taxes on their salaries; no medical insurance premiums to cover them. By 2015 fully 3.3 million middle class Americans earning $136 billion a year will see their jobs outsourced.

The Bush Administration has taken a hands-off approach to outsourcing. Just last month executives from the major technology companies went to Washington to persuade the President to refrain from any move to regulate the flow of American jobs overseas. Hewitt-Packard’s CEO Carly Florina says that “there is no job that is America’s God-given right anymore. We have to compete for jobs.” Translated that means that to keep their jobs American the middle class employees are going to have to get by on 80% less income and to give up the benefits that come with employment. To survive they are going to have to compete with President Bush’s “guest workers” for the jobs that are left. To compete they are going to have to be willing to accept that a falling tide strands all the boats and that theirs will soon be hard aground.

Whose boat will be floating then? The Other America, made up of those of whom F. Scott Fitzgerald wrote, “The very rich are different from you and I”? Well they might well reflect that their boats float on the American middle class – their customers. Whether their products are manufactured in China, Malaya, or Singapore they are sold to the American market place. They might consider that with every job they export they make that market place smaller by one more family and when it gets smaller even their yachts will be aground.