Is outsourcing bad?

A few months back, the client company for which I was deputed in US decided to switch software/software service vendors and eventually that means that employees from our company would be replaced by the employees of the competitor. But quite unexpectedly this created a buzz in the little town where we live. The link below is an excerpt from a local newspaper's website.

http://www.tampabay.com/news/business/article456721.ece

There are a lot of legal and moral issues listed in the article but what attracted me was the comments section. There were so many people who considered that outsourcing is a threat to the employment of US population and foreigners especially Indians take away a lot of their opportunities. Looking at this whole thing from a conservative bird's eye view, there are a lot of reasons to believe so. Some of them are

1. A lot of Indians could be spotted in Oldsmar (the town where I live) especially in and around the client location.

2. Apartments meant for the economically lower section of the US society (the labor class) are largely filled by Indians (the rent is cheap!!!).

3. The state transport buses which were once miracles in Oldsmar could be spotted quite frequently these days. And guess who's travelling - Indians.

4. Gym, swimming pools, public courts, you name it - Indians are everywhere and even worse, their population has grown like insects and the facilities are constantly occupied by them.

5. Walk around the client office and chances are that you end up seeing an Indian in every direction you turn. This may not be true with Americans. :)

And what is the sole reason for having so many Indians - outsourcing and hence outsourcing is bad. This is what majority of the local population believes.

So is this true? Or rather what is the degree of truth in these statements? Let us take a closer look.

The first and foremost thing is cost of operation to the US companies. A truly capitalistic nation should try to minimize its expenses and do good to its people and that's precisely what US does as on date. If an American charges $100 per hour for a job, an Indian does it for $20 or $30. This might sound untruthful but this is the reality. And guess what - the person who comes to the client location has all the expenses that a normal American has and still he is paid peanuts. And surprrrrrrrrrrise! The Indian is able to save quite some money and spend it for his economically downtrodden family back in India. What this means is that an average American charges n times as much as an Indian worker for the same job and trying to justify this, is a policy that US hates - communism.

Second is an impression that Indians do not pay taxes. I'm not sure how much an American pays as taxes. But as an Indian in US, I could say for sure that Indians pay a considerable sum of their earnings as taxes.

Third, the development of businesses that depend on demand-supply system are largely benefited by the floating population. Instances are groceries, household appliances, leasing, mortgage, automobiles, garage, etc.

I could keep listing reasons in this direction but suffice it is to say that outsourcing serves as a benefit to the American client, the American Government, the Indian/American vendor and thousands of Indian families. If the objective is to truly reduce outsourcing and make sure that local population is getting employed, the right way to do it is to compete with the Indian employees in the cost quoted just like it happens in any other business. After all, the lowest bidder wins and so is the case here! Might be hard to digest but this is the naked truth behind all these outsourcing myths.