Millennium Post

Snatching American jobs

Shooting the Breeze

President Barack Obama has recently given India a loud chiding for showing reluctance to accept reforms. ‘In too many sectors, such as retail, India limits or prohibits the foreign investment that is necessary to create jobs in both our countries, and which is necessary for India to continue to grow’. The rebuke has an underpinning of the complaint – ‘jobs in both our countries’ – that the Indian tardiness to let, say, Wal-Mart set up its stores in the country has been a hindrance to export growth and, therefore, job creation in the US. The president’s case against India has another part to it which is marked by even more petulance. He thinks India [and the Philippines, though to a milder extent] has no right to snatch the offshore jobs. So far he has targeted only the low-wage call-centre jobs, but his ‘bring jobs home’ bill that got narrowly stalled in the house of representatives last year had an India-specific content, India being a major provider of the service.

The bill threatened to punish the American companies that would relocate their customer call centres overseas by making them ineligible for government loans or contracts. The federal loan ineligibility period could be as long as five years. The bill said that a customer service representative, if based overseas, must disclose her location to callers and offer to transfer the call to a US-based representative. Following the Obama initiative, quite a few state legislatures are about to introduce similar bills, its most eager proponents being Arizona, Florida and New Jersey. The lawmakers are undoubtedly being pushed by Communications Workers of America (CWA), a trade union representing 1,50,000 call centre workers. CWA alleges that in the four years between 2006 and 2010 the number of call centre employees in the US dropped from 5.2 million to 4.7 million. India is believed to be the prime snatcher of these jobs.

Is it merely pre-election rhetoric, the presidential poll being only a few months ahead? Of course it is natural that the job issue will dominate political discourse in the midst of an ongoing economic downturn that has cost the country an enormous number of jobs, the unemployment figure failing to drop below 10 per cent for years. But Obama has been consistent in his suspicion about India as well as Indians, both offshore and at home. It is as if he was on a mission to reverse Bush’s openly pro-India policies. It has been reported that till 2008, the rejection rate of professional L1 B visa applications from India hardly ever exceeded 2.8 per cent. But it touched 22.5 per cent the next year, the very first year of Obama presidency, and has remained among the highest since then. Such slights timed with the president’s favourite alliteration – that jobs that can be done in Buffalo need not shift to Bangalore. If it did help American corporations to cut back on costs, that was none of president Obama’s concerns. He hates the idea of any job being shipped out to India.

Are Asian Indians an issue in the American society? It is difficult to believe so, as South Asians were only 2.7 million in number in 2007, in a nation of 300 million. From the outside, most of the Telugu or Hindi speaking Indians in New York or Los Angeles work in technology or medical sciences, with good numbers being employed in low-pay works like taxi drivers, cashiers and restaurant work. But that’s an extraneous picture. Between 2002 and 2007, Asians in general, and Asian Indians in particular, have moved big time into setting up successful businesses on the American soil, a phenomenon that seems to have seemed significant to president Obama.

In these five years, the number of Asian-owned businesses in the US has gone up 40.4 per cent [source: US Census reports], with Asian-owned firms accounting for 5.7 per cent of all non-farm businesses. But the quickest movers are the Asian Indians. In 2007 the 3,08,514 firms owned by them, representing 30 per cent of all Asian-owned firms, booked a total receipt of US $152.5 billion. However, the 4,23,609 Chinese-owned firms followed their Indian counterparts in receipts, the figure being US $142.8 billion. In 2002-2007, the two linguistic/racial categories whose businesses grew fastest in the US are Asian Indians [73 per cent] and Vietnamese [85.7 per cent]. And they were doing just as fine in micro-businesses as well as medium sized ones. In 2007 if 41,047 Indian-owned firms booked receipts of less than US $5,000, there were as many as 78,144 Indian-owned companies with receipts in excess of one million dollars.

The number of Indian-owned firms with million-plus dollars in receipt increased 57.4 per cent in the 2002-2007 period. So something was happening with the Indian diaspora in the new millennium that could be felt in the nation’s business ecosystem and not just in the frequency of the curry restaurants.

It is felt most, perhaps, in California, which is not only the home of Hollywood, America’s best known calling card to the world, but by far the most entrepreneurial of its 50 states. Of all California’s businesses, a substantial 14.9 per cent are owned by Asian Indians. While a major job-creating sector like wholesale trade has over a quarter owned by Indians, their share in retail trade being a substantial 18.9 per cent, the Indian presence [13.6 per cent] in the professional and scientific sector too is markedly visible. This is in addition to the traditional Indian stronghold in the accommodation and food sector, which remains virtually unchanged over the years at 32.8 per cent.

Since the Gold Rush era [1850] California has been the crucible of human migration in America, with waves of newcomers having embraced the state’s diversity of opportunities. But the recent surging tide of Indian business ownership in the state may be a pointer towards an entirely different future trend.

American politicians may not welcome it. If Mitt Romney, the Republican hopeful in the presidential poll, championed offshoring as a businessman, he may not adopt a stance altogether different from Obama if he wins the election. All countries welcome cheap labour from abroad but nobody welcomes too many foreign employers in their midst.
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