Trump and Clinton want to bring back millions of outsourced jobs – here’s why they can’t

By Stephan Manning and Marcus M. Larsen.

One of the big themes in the current presidential race is how decades of free trade have dealt a heavy blow to the American worker as millions of jobs were shipped overseas to take advantage of cheap labor.

That’s even turned some pro free-trade Republicans into protectionists. As a result, the candidates are promising to bring these jobs back to the U.S. – whether by lowering taxes (Donald Trump), improving skills (Hillary Clinton) or building infrastructure (Bernie Sanders).

But can all these manufacturing, service and knowledge-intensive jobs that were outsourced or offshored to China, India and other places really be “brought back,” as the candidates seem to believe?

Bringing Gender from the Dark Side to the Light in International Development and Management

By Keshav Krishnamurty. 

A panel on Gender, International Development and Management was hosted on October 23 at UMass Boston as part of the Academy of International Business US-Northeast conference, including panelists Banu Ozkazanc-Pan (UMass Boston College of Management), Kade Finoff (UMass Boston College of Liberal Arts, Economics Department), Cynthia Enloe (Clark University, Worcester) and Deborah Jones (Victoria University of Wellington, New Zealand) with Alessia Contu (UMass Boston College of Management) as the moderator.

The discussion began with Alessia Contu noting that any conversation about gender lands up with an all-female panel, and stating that it is important how scholars teach gender to their students. Some excerpts follow:

(Question) Alessia Contu: What does it mean to think about gender seriously in political economy?

Banu Ozkazanc-Pan : Gender is the complex interaction between biological sex, identity and perception of gender role/gender expression. It’s not just about women! “Genderblind” does not relate to gender-neutral outcomes. It’s like when students conduct a SWOT analysis of a company, there are assumptions being made about gender in business all the time. Who’s going to benefit from a cost-effective workforce? What are the real gender consequences of those decisions? What we research, practice and teach about international management needs to include all those.

The Force of Political Economy Awakens at UMass Boston

By Keshav Krishnamurty.

Two weeks ago, UMass Boston played host to the Academy of International Business (AIB) US-Northeast 2015 Frontier Conference themed “Bringing the Political Economy back in” (October 22-24), facilitating a broad discussion and engagement on the issue of Political Economy and International Business amongst leading academics from top universities across the world. The first highlight of this conference was the panel “Challenges to International Business Research: Bringing the Global Political Economy back in”, featuring panelists Mona Makhija (Fisher College of Business), John Cantwell (Rutgers University), Rajneesh Narula (University of Reading, UK) and Ravi Ramamurti (Northeastern University), with Suhaib Riaz (UMass Boston College of Management) as the panel moderator. This panel underlined the great importance of political economy perspectives and raised some fundamental issues for future research.

Oxford English for Cheap: The Dark Side of Offshore Call Centers

By Mehdi Boussebaa.

Offshoring of call center work to ‘developing’ nations by Western companies has become a huge business. For many, it represents a positive force of ‘globalisation’, bringing not only labor cost benefits to Western companies but also employment and career opportunities to ‘developing’ nations. Others, however, see a darker side. Call center work is often exploitative, oppressive and talent-wasting as it puts university-educated workers through ‘dreary work, unsocial hours and Big Brother-style observation’ (The Observer, 30 October 2005). Plus, these workers often experience abuse and racism on the phone and even lose – partly at least – their identity in an attempt to pass for Westerners. According to Shehzad Nadeem, training Indian workers in a ‘neutral’ global English accent may have the effect that these workers get stripped of their mother tongue (The Guardian, 9 February 2011). A recently published study in the Journal of International Business Studies (Englishization in offshore call centers: A postcolonial perspective) goes even further: training and monitoring the ability of Indian workers to speak ‘pure’ English in some ways re-creates colonial relations and further divides the West from the rest. Why is that?

Slumdog Millionaires: Can Impact Sourcing Alleviate Poverty?

By Chacko Kannothra and Stephan Manning.

Call centers, tech support, payroll processing – more and more service jobs are performed abroad. Global outsourcing is one of the most controversial trends of our time. To some, it is mainly a cost-cutting exercise which has led to job losses in Western economies and has started a ‘global race to the bottom’. The recent shift of clients and providers to second and third-tier outsourcing locations to keep labor costs low is an indicator of that. To others, outsourcing has also generated new income and entrepreneurial opportunities especially in developing countries. Clearly, in particular for the young and educated in urban areas, such as Bangalore in India, the outsourcing sector has been a career stepping stone. But how about the vast majority who still live in poverty? Will the global service industry widen the gap between the new urban elite and the rest? Maybe not if we believe in the new trend of ‘impact sourcing’ – the creation of outsourcing jobs and training opportunities for the poor and disadvantaged, in particular from slums and rural areas. Impact sourcing was celebrated a few weeks ago at the 17^th World Outsourcing Summit as a promising way of combining business and social benefit. The Rockefeller Foundation even calls it a means towards reducing poverty. But are these claims realistic?

The Offshoring Paradox: Are Firms Unable or Unwilling to Retain Their Employees?

By Stephan Manning.

It is almost ironic. Some years ago many U.S. and European firms started offshoring IT, finance and accounting, software testing, engineering work and other services to India, China and other developing countries mainly to cut labor costs. Now, most of these firms struggle with retaining qualified workers abroad, after having cut thousands of jobs at home. According to various reports by the Offshoring Research Network, employee turnover remains one of the most persisting problems facing firms with offshore operations. Why is that? Well, many firms complain about ‘wage inflation’ in offshoring hotspots (see Plunkett 2014 report). But is that the whole story? Compared to Silicon Valley software engineers, most counterparts in Bangalore, India, still earn only 10-20% of salaries in the Bay area (see Payscale, article by Tam). So are firms unable or unwilling to retain workers offshore?

Don’t Listen to Economists

By Julie A. Nelson.

According to a recent New York Times article, the Primark retailing group, based in the UK and Ireland, is stepping up to the plate to aid the families of the killed and injured in last year’s Tazreen Fashion factory fire in Bangladesh. The company claims to have already delivered $3.2 million in assistance, and a spokesperson says simply “you take responsibility for the results of where your clothes are being made.” Meanwhile, however, WalMart, Sears, and other U.S. companies that were also supplied by the factory have declined to contribute to efforts to aid the victims. What gives?

From Ally McBeal to The Zookeeper: Can Massachusetts Become Hollywood East?

By Pacey Foster, Stephan Manning and David Terkla.

Hollywood and New York used to be the centers of movie-making in the U.S. This reality is changing as more and more states now attract ‘run-away’ productions from Hollywood. Massachusetts is one of them. After hosting well-known movies and TV shows in the 1990s, such as Good Will Hunting and Ally McBeal, Massachusetts experienced a drop in productions in the late 1990s and early 2000s. To counteract this trend, and to compete with other states that had begun to offer tax incentives to film and television productions, Massachusetts set up its own tax incentive program in 2006. This program has clearly contributed to an increase in the volume of productions and total employment in this sector. According to a study by HR & Associates, the tax credit in Massachusetts generated in 2011 2,220 full-time equivalent jobs and $375 million in state spending that year.* Movies shot in Boston and Massachusetts since 2006 include The Departed, Gone Baby Gone, The Zookeeper, The Town, and The Social Network. But can Massachusetts really grow into a new film production cluster? Can Massachusetts really become Hollywood East?

The Fashion Trap: Why Fairtrade Works in Coffee but not in Clothing

By Stephan Manning.

The recent collapse of a garment factory in Bangladesh was devastating. Over 400 mostly young female workers died; over a hundred are still missing. An ‘accident’ that would be unthinkable in the U.S. or Western Europe. Prior concerns about the building conditions (including a large crack) had been ignored – by the owner, by government officials and global buyers. Whether or not clients, such as Benetton, Cato Fashions, Primark, Mango and Joe Fresh, actually knew about the situation is not important. The fact however that they did not make sure – even after a series of recent fires with hundreds of casualties in similar factories, such as the Tazreen factory – that basic safety standards many of us take for granted are met and followed up on is revealing. After decades of protest and campaigns by ILO and international NGOs, such as the Clean Clothes Campaign, it seems that the global fashion industry has not even managed to secure very basic health and safety conditions for garment workers in major producing countries.

After the Decline of Large U.S. Corporations: Where Do the New Giants Come from?

By Stephan Manning.

The latest Forbes 2000 Rankings leave no doubt: Large corporations continue to exist (and they grow even larger), but fewer than ever originate in the U.S. Among the Top 10 listed firms (in terms of sales, profits, assets, and market value) four are Chinese – including the first and second ranked Industrial and Commercial Bank of China (ICBC) and China Construction Bank. So is it really true that large corporations are collapsing, as Gerald Davis and Israel Drori suggest in their provocative article? Or are we simply witnessing the declining relevance of U.S.-based firms? Should we, in turn, just focus on the continuous power of Western multinationals in global production networks, as David Levy suggests in his related post, or is there another important dynamic: the gradual but certain shift of gravity from U.S., European and Japanese firms to new giants from BRIC countries – China, India, Russia and Brazil – and other emerging economies?