The news about the Pasadena website that has hired two people in India to cover city council meetings from 8,000 miles away, which I wrote about last week, stirred up an awful lot of pontification all over the media and blogosphere (a nice collection of links can be found here).
Most of the virtual ink was spilled lamenting the horror (the horror!) of this development and hardly anybody else seems to have picked up on my point that the salaries being paid to the two Indian journalists ($12,000 a year for one in Mumbai and $7,200 for one in Bangalore, according to the LA Times) are actually evidence that pay for educated Indians is skyrocketing.
I did at least get one comment to that effect, from soon-to-be business school professor Girish Mallapragada:
I worked in software product sales in India from 2001-2002. I had an engineering bachelor’s and an MBA. I used to earn 13,000 USD per annum (bonuses not included) which was just about the average for a rookie MBA. As of now that figure has just about doubled and a rookie MBA in software sales can hope to get anything ranging from 20-30,000 USD per annum. Yes, salaries are rising but not to an equal extent across all jobs.
It turns out this phenomenon of rapidly rising salaries for skilled white-collar work in India has gotten a lot of coverage in the Indian and IT media. But it’s been mostly ignored in the U.S.
Now those salaries are still a lot lower than those for similar jobs in the U.S. I’m not trying to argue, as Robert Samuelson did in his column Wednesday, that the offshoring of white-collar jobs to India is a nonevent. You don’t have to have a whole lot of jobs move overseas for the phenomenon to have a significant impact here. Many white-collar workers in the U.S. really are competing in a global labor force now, which wasn’t the case a decade ago.
But that means highly educated Indians and Eastern Europeans and Filipinos and so on are able to compete in that global labor force now too, and seeing their pay go up dramatically. That means, first of all, that the cost advantage to offshoring is shrinking. It is also means that more people around the world are getting shots at rewarding, well-remunerated jobs. And that’s a bad thing why?