A Paper-Thin FT Page-One Story on Outsourcing

Rarely will you see a front page story as thin as this one, and if you do it will probably also be in the Financial Times.

It goes above the fold on page one today with a story clumsily headlined “US proves call centre match for India over hire costs.”

Call centre workers are becoming as cheap to hire in the US as they are in India, according to the head of the country’s largest business process outsourcing company.

The FT says massive unemployment in the U.S. has driven down call-center wages here while Indian ones are up 10 percent in the last year.

I’m having a hard time believing this one—especially since it’s sourced to one guy: The CEO of an Indian outsourcing company. There are no data here; no other sources backing up this assertion. Why is this in the paper at all, much less on the front page of a sophisticated financial publication?

I made the case in The Wall Street Journal several years back that companies were rethinking going overseas since the costs of small-town operations could be competitive—all things considered, like real estate and telecom and reputational costs. But the FT isn’t talking about any of that. It’s saying, or implying strongly, that wages are similar.

And that’s just hard to figure. If you take free-trade fundamentalism to its logical conclusion, U.S. wage stagnation won’t stop until pay in poorer countries find an equilibrium.

Despite the disaster for the American worker over the last three decades, I don’t think we’re there yet.

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.