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Larry Blakeley (Contact Info: larry at larryblakeley.com)

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This article written by Katherine Boo describes the phenomena of outsourcing and the first stages of Americanization of the indigenous culture of the coastal city of Chennai, the capital of the state of Tamil Nadu - "the fourth-largest city in India, after Delhi, Mumbai, and Calcutta," from the perspective of the Indian workers.

She begins by describing how within minutes after a Plano, Texas sales clerk's handwritten updates to his resume dropped off with the local copy shop ends up at Office Tiger of Chennai.

She goes on to tell the story about outsourcing, the local culture, and the personal life of one employee, Harish.

The article has been summarized, as follows:

"Their employer, a company named Office Tiger, did the work not just of an American copy-shop chain but of seven of the twelve biggest banks on Wall Street—confidential labor carried out in unmarked rooms with film-covered windows, closed-circuit cameras, and electronic security so unforgiving that as the typist finished the résumé from Plano three bankers, accidentally locked in a nearby room, were frantically pounding on a door. Office Tiger also performed work for a Big Four accounting agency, several white-shoe Northeastern law firms, an insurance conglomerate, two large publishing concerns, a Madison Avenue advertising agency, global management consultancies, and other enterprises whose identities were not divulged to workers of the résumé-typing rank.

The document specialists, all college graduates, earned roughly a tenth of what they would have commanded for this work in the U.S., and less, too, than they would have been paid in some call centers. But it was the possibility that one could rise up from a lowly position that had made Office Tiger one of the city’s status employers, a firm whose workers were so pleased by their affiliation that they put it on their wedding invitations, just below their fathers’ names. A foreign notion—that jobs should be distributed on the basis of merit—was amending the rules of a society where employment had for millennia been allotted by caste, and great possibilities abounded. A clerk who today did a bang-up job of formatting the work history of a part-time handyman in Plano might be an adjunct investment banker by year’s end.

Capitalizing on their celebrated work ethic, on a dozen practical-minded local universities, and on the ability of the élites to speak, in addition to Tamil, the clipped and elegant English of their colonizers, Chennaians developed the sort of forward-looking economy that many of America’s post-manufacturing cities still struggle to achieve. “Better cheape” Western business is Chennai’s new niche.

The new American attachment is not physical but conceptual—the lure of cheap, smart, pliable labor.

Among the white-collar options available to Chennai’s college graduates are work for Verizon, Bank of America, Hewlett-Packard, Citibank, Visa, MasterCard, and Electronic Data Systems, a Plano-based tech company founded by the free-trade opponent Ross Perot, which recently announced a layoff of fifty-two hundred U.S. employees.

The Americanization of Chennai has been so swift and—save inside the Park Hotel—so quiet that many of its citizens do not yet grasp the change in their cultural and literal landscape. An animation company makes cartoons seen by American children on Saturday mornings. Radiologists read American MRIs, clerks adjudicate patients’ insurance claims, and programmers automate Medicaid eligibility for an entire Midwestern state. Chartered accountants complete U.S. tax returns while underwriters certify U.S. mortgages. And within Office Tiger’s pink building aspiring financiers analyze American firms that are ripe for corporate takeover in a place they call Wall Street East.

The co-C.E.O. is Joseph Sigelman; the other co-C.E.O. is Randy Altschuler, also thirty-three. Their enterprise, Office Tiger, is named not for the fauna of the East but for the mascot of Princeton University, where they met in the cafeteria their freshman year and became best friends. Joe and Randy, middle-class boys who had attended, respectively, St. Ann’s in Brooklyn and Manhattan’s Hunter College High School, were the kind of Princetonians who sough entrée into student government, not the eating clubs. They shared abstemiousness and obsessive work habits (if you dined most nights on applesauce that you kept in your dorm room, you saved money and gained an extra hour to invest in your medieval-history paper) that since college days have become a selling point.

After Harvard Business School and jobs at Lazard Fréres Goldman Sachs, Deutsche Bank, and the Blackstone Group, in 1998 the friends gave up a combined annual income of half a million dollars and the experience of hearing Paris doormen say, “Welcome back to the Ritz, Mr. Sigelman,” in order to pursue an idea born in a late-night fit of pique. It had become apparent to them that not every typist and copyist working the midnight shift in their investment banks—the moonlighting actor, the artist with the ring in his nose—was putting his heart, soul, and syntactical memory into completing the PowerPoint presentations that needed to be done, perfectly, by morning. Randy began to speculate that workers overseas might invest more care in the menial jobs that Manhattanites seemed not to relish. Joe, who had been introduced to Madras on a family vacation when he was twelve, thought that some of its underemployed citizens might be grateful indeed. “You met people in factories or running the elevator who had the intelligence and spirit to do so much more,” he remembered. “We thought, why not release that talent?”

The Indian government gave them a ten-year “tax holiday.” American and British venture capitalists gave them seventeen million dollars for the startup, only a sliver of which they had to spend on labor. (Tamil Nadu’s per-capita income equates to thirty-six U.S. dollars a month.) Their first “office” was a sheet-metal shed. Former business-school classmates gossiped that Joe and Randy had cracked from the stress of investment-banking and run off to an ashram. Initially, ashram life would have rendered a better return. “We had virtually no business,” Randy recalled, “because at the time people thought it was crazy to be sending work to India. So we had a hundred people sitting in a room and we’d get one fax a day to type. When the fax came through, it was like a five-alarm fire—we’d all fall over each other trying to get it done, and we always, always fucked it up.” But this slow start turned out to be profitable. During the mutual-reassurance sessions common to foundering enterprises, Joe and Randy got to know their employees better than they ordinarily might have. All were college educated. A third possessed postgraduate or doctoral degrees. Randy returned to New York to establish the American side of the business and, from a small office overlooking a Dunkin’ Donuts, pressed his former Wall Street colleagues to give the Indian workers a trial run at higher-end labor.

Six years later, the Manhattan banks that Randy and Joe abandoned still have odes to “thrift” in their marble lobbies, but those banks also have rows of capacious, upholstered, untenanted cubicles. Almost twenty per cent of the jobs on Wall Street have disappeared in the last three years. Office Tiger recently doubled its staff, to sixteen hundred and fifty workers, and will nearly double in size gain by year’s end, on the strength of “judgment-dependent services": equity analysis, legal research, and accounting jobs that pay an annual salary of up to a hundred thousand dollars in the United States and between ten and twenty per cent of that in Chennai.

Salomon Brothers in its heyday received five hundred job applications a month. Office Tiger sometimes receives fifteen hundred applicants a day, many of them accompanied by parents who pray as their sons and daughters take one test after another in the hope of earning an interview with the beautiful, ruthlessly efficient human-resources executive in black pajamas, who does her work in the reception area, behind a thin glass wall.

One false assumption had been that only the manufacture of goods, not the provision of services, could be exported. Another, supported most recently by the U.S. Department of Labor, is that the number of American jobs lost to outsourcing is minuscule. But Labor statisticians rely on the corporations to link their domestic downsizing to work they now send abroad—a connection that some corporate leaders are loath to make. Other analyses suggest that the number of American jobs lost to this phenomenon will soon reach a million, as the Indian and Chinese back-office sectors expand by thirty per cent a year. Indian analysts foresee outsourcing in biotech research, pharmaceuticals, architecture, and the law. Although many economists believe that this global transition is mutually beneficial—that an economy is better off specializing in areas where it is relatively more productive and importing in areas where it is not—a study by the University of California at Berkeley identifies fourteen million American jobs at risk in the near term. The latest consolation is that, since many outsourced jobs are low-end and mechanistic, Americans are now being liberated to use their exceptional skills as innovators and entrepreneurs. Being tactful, the Tigers pretend to agree. What is the advantage of pointing out that the country of Salman Rushdie and Amartya Sen may not, in fact, be creatively impaired? The résumés and credit-repair leaflets spewing into the copy shop from Texas are less diplomatic. They intimate that some Americans have been “freed up” to do nothing productive whatsoever.

“The outsourcing backlash?” Joe was saying. To him, it was political entertainment, music for Presidential campaigns. “In the real world, it’s inexorable. This is radical global change, and it is going to happen more and more, not just because the labor in developing countries is cheaper but because the work is often done better. Businesses will have to outsource to stay competitive, and eventually the American public will get used to it. Look, that’s what a free market is all about.”

Joe passed the applicants awaiting interviews, lost time in a balky elevator, and recovered that time by racing through the twilight to the Taj Hotel, a few hundred yards from Office Tiger, where he has been living for the past five years. His route was through a back alley, where he dodged a succession of two-wheelers, three or four passengers astride. Some of the riders were his employees, hastening to work at the start of the American business day. “It kills me,” he said, shaking his head. “Their brains are their careers, but I can’t get any of them to wear a helmet.”

After three years at Office Tiger, Harish is still occasionally jarred by dislocation. When Wall Streeters call and say, “Hey, Harry, what’s up?”—as they do, often—the wrong picture always pops into his mind. What’s up is a rotating metal fan on the low Styrofoam ceiling of the room where he sleeps, on the floor, beside his father, mother, brother, and grandmother. The ceiling fan’s hum is a baseline to Harish’s late-night puzzling about the virtual world he now inhabits.

Office Tiger has been escalating for nearly two years now, the growth of its Wall Street research operations fuelled by regulatory reforms that came (along with criminal actions and billion-dollar legal settlements) when United States banks were caught manipulating their research in order to boost the profits of favored clients. Companies now send junior-analyst and research jobs to Office Tiger not just because it is cheaper but also because it is nine thousand miles from Wall Street temptations.

This ranking of company over country suited many of the Chennai élite who had assembled that night in the Breeze Hotel’s upstairs banquet room. The city’s Rotary Club was honoring an entrepreneur named Ranjini Manian, whose firm, Global Adjustments, had settled the families of thousands of multinational executives into the city. Just as Nostradamus had predicted the toppling of the World Trade Center, the Rotary governor said, he had prophesied that India would be a superpower. He gleefully reeled off the names of Global Adjustment’s prominent clients, but then his mood darkened slightly. Hollywood—“a multibillion-dollar industry, you know”—was not on the list. Reach out to American film moguls, he urged Ranjini and the other attendees. “Tell them that they can film in India for ten per cent of what they’re currently spending.”

The fact that most (of the city) were thickly streaked with the residue of urine streams was not a political expression but, rather, a reflection of the fact that, multinationals or no, forty per cent of Chennaians live in slum dwellings, where latrines are few.

Though Tamil Nadu had a devastating HIV-infection caseload and nearly a hundred thousand children died annually of preventable diseases, the healthcare topic of greater local interest was the progress of a Chennai-based hospital chain named Apollo. Apollo was aggressively recruiting ailing Westerners who were willing to outsource their hip replacements or chemotherapy. Thanks in part to reasonably priced postsurgical sightseeing tours, the chain’s hospitals were now treating twenty thousand foreign patients a year. Meanwhile, as Chennai’s population surged on the prospect of good new jobs, rents in Triplicane and other middle-class neighborhoods doubled. Electricity prices jumped, too. But by far the greatest problem was the fact that although residents now had Cosmopolitans and Red Bull, they had no water.

He had just seen the film “The Lord of the Rings,” which had prompted him to reflect on Asimov and the rest of his science-fiction and fantasy canon. “Now I can hardly think of those books as fiction anymore,” he said. “So many new things have been happening, and what just last year seemed impossible is now not. What I think instead is how lucky I am to have been born into this strange, right time. In these last years, we’ve found that New York and Chennai can do the same things—that we almost are the same thing. Already, we are half of the time in New York, just our bodies are left behind.” In such hybrid lives, he knew, some parts of one’s culture disappear. But among the vanished elements might be caste discrimination and religious bigotry-things Harish longed to see go. “So much of globalization is, I think, mischaracterized and misunderstood. It is because of this trend that there will come a day when there are no boundaries, no castes or divides between Muslims and Hindus or Christians—a day when, indeed, there will be no nations at all? Indian time? New York time? They are passing phenomena, in my opinion. Soon we will all share one time zone—or, really, there will be no time at all.”

There was already, in his life, no time. He had been working like mad for his American clients. There was a programming job that outside contractors had said they’d need three months to complete. Harish did it on his own in sixty hours. “It was just intuitive, a three-day stunt,” he said, modestly. “I have no big theories, but some problems I can solve from the bottom up.” Such efficiency-minded innovation was a Tiger trademark, and helped explain why, over five years, only a single American company had, after a trial run at Office Tiger, opted out. (The exception was a New York firm that, battered by the events of September 11th, decided not to traumatize workers further by sending their jobs offshore.)

The constant expansion required new macros, databases, quality-control systems, and information systems—so many inventions, so urgently needed, that Harish didn’t always consider their implications. For instance, the system he’d created to help candidates see and correct their data-entry errors had now mutated into a tool that helped executives identify and remove imperfect “permanent” workers.

He had somehow thought that holding the line against Americanization would make it simpler to submit to his Indian duty. But, whether or not he bought the Dockers or the Florsheims sold in the shopping mall next to the office, it seemed that his work was changing him more than he had realized. “It’s a cat’s cradle,” he said unhappily.

After five years of intellectual challenge and cultural escapade, Randy and Joe’s company had become first respectable, then profitable; someday soon it might make them quite rich.

Ambitious plans, Joe knew, “and I worry that talking about them makes me sound like a jerk. But Randy and I were raised on the premise that, if you work hard for something, most of the time you will get it. You know, that’s the single greatest thing about America, and, if that’s what Americanization of the world means, I’m all for it. Neither Randy nor I was born rich; Randy’s mother raised him by herself. But when we decided we wanted to build something close to a perfect meritocracy, where workers got recognized for what they did, not for whom they knew or how much money they were born with, we committed ourselves totally, and it happened—it’s not perfect, but it’s real, and our workers’ lives have been changed for the better.”

Today, at private corporations like Office Tiger, the official stance on caste is “Don’t ask, don’t tell.” This scruple excuses executives from acknowledging what impolite inquiry makes clear: Brahmin and other upper castes dominate the supervisory class, while untouchables still clean toilets. They’re lucky to have jobs at all.

More than 5.6 million people in Harish’s generation alone are unemployed in Tamil Nadu, a depressing answer to the question that Randy and Joe are occasionally asked by New York executives. After so much outsourcing, are there still Indians to be hired? Given the pervasiveness of need, the state literacy rate of seventy-four per cent is impressive, and indicative of the breadth of faith in education. For the poor, however, such faith is unlikely to be rewarded in the new meritocracy.

Academics who study the future of world labor see, in the middle distance, a divide so stark that the term “division of labor” will no longer apply. Poorer societies will work, they say, while the richer ones will invest and consume.

If outsourcing was “inexorable,” as Joe argued, it wasn’t quite a deus ex machina. It was driven by human beings who wanted to capitalize on global economic opportunities, and made choices to that end. Joe and Randy loved Harish and their other Tigers, perhaps even as much as the Tigers loved them."

- "The Best Job in Town," Katherine Boo, Senior Fellow with New America Foundation, The New Yorker, July 5, 2004. http://www.newamerica.net/index.cfm?pg=article&DocID=1883

Copyright: 2004 The New Yorker