Sure information technology has made it easier for companies to treat their labor as temporary and transitional and it certainly can allow for corporations to extract some additional cost savings through sourcing from lower cost areas, but I feel that we have just accepted as given (perhaps due to this being a business school :P) that corporations chartered by a government have the right to do this unfettered. How does having to move to a completely different culture to keep your job effect your children and your community? What sort of price is paid by the greater society for this lack of national presence and community support?
Wednesday, February 4, 2009
IBM Project Match
Since we have been speaking so much about how pools of talent for companies is being less and less limited to specific geographic constraints, I wasn't surprised to see this little article come across one of the blogs that I frequently read (http://www.marginalrevolution.com/). Apparently the company that has produced most of the materials we have reviewed to this point, IBM has a program called "Project Match" where recently laid of employees from areas like the USA can get immigration and visa assistance to move to countries like China and India in order to get new jobs with IBM for pennies on the dollar of the jobs that they used to have.
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I think this illustrates a very real problem of globalization - that it exerts downward pressure on wages. And, because of advances in information technology, it's no longer just the jobs at the bottom of the income scale but also middle-income jobs that are being affected. For now the jobs are leaving the U.S. but I think that eventually wages in the U.S. could fall as a result of the more "efficient" global labor markets. Either way, the current globalization trend will certainly lead to greater and greater income inequality. I think this issue deserves more attention than it gets.
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