| In The News #68 >> | ||
>> TITLE Supply and Demand at Work in the Global Financial Labor Market Lead Story-Dateline: >> SUMMARY The primarily western-based financial services sector is in rapid shift mode. U.S. and European firms are scrambling to export call center and information technology jobs to developing countries. Wages in these countries, India for example, run about one-tenth the wage rate of developed nations. However the savings are not that exaggerated once the administrative costs are included. Experts maintain that the benefits of outsourcing to developing nations do not hold for every industry. In the financial services sector the accounts are often more complex and foreign staffers are not adequately trained to handle many questions. Phil Middleton, head of retail banking at Ernst and Young, also cautions businesses about the potential dangers. According to Middleton, costs will soon rise as the supply of Indian PhD’s with excellent language skills willing to work for virtually nothing quickly become employed. It appears some of these increase may already be beginning as reports indicate that Indian wages are increasing at an annual rate of 15% to 30%. >> Talking it Over and Thinking it Through
>> Thinking About the Future Supply and demand analysis still works to forecast prices, even when you are talking about forecasting gains from outsourcing financial labor. This article maintains that the cost/benefit structure will soon change as the global demand for financial sector labor quickly absorbs all the qualified international applicants. By thinking about this scenario from a supply and demand perspective, which jobs will be safe from exporting? What should you study in college? Think about the field you are currently studying. Is it safe from global competition? Accounting? Marketing? Management? Sociology? No one can predict the future but it would be wise to give this question some thought.
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