Job outsourcing affects JHU

It's the newest trend for companies across the United States outsourcing information technology (IT) departments to smaller companies overseas.

This trend is attracting much attention from politicians as well as students graduating in technology related fields. Even Hopkins is jumping on the outsourcing bandwagon.

The Computer Sciences Corporation (NYSE:CSC) announced on Mar. 6 a five-year outsourcing contract with Johns Hopkins Health Systems (JHHS), which provides managed care services throughout the Mid-Atlantic region, according to a news release.

Although CSC is centered in El Segundo, Calif., its has over 575 offices worldwide.

According to the Outsourcing Institute, an online source for outsourcing opportunities worldwide, some of the main reasons why companies choose to outsource include: reducing and controlling company costs, improving company focus and liberating internal resources for other purposes.

A study by the economic research firm Global Insight for the Information Technology Association of America, a high-tech trade group, supports outsourcing overseas.

It claims that offshore IT software and services outsourcing increases average real wages of U.S. workers.

It states "with lower inflation and higher productivity, real wages were 0.13 percent higher in 2003 and are expected to be 0.44 percent higher in 2008."

This seems to be good news for the American people, indicating that all will prosper from the outsourcing trend. "The benefits of global sourcing contribute significantly to real gross domestic product in the United States, adding $33.6 billion in 2003."

But many Americans aren't too quick to praise international outsourcing of IT services.

Many prospective graduating students are concerned that by outsourcing tech jobs overseas, companies are limiting the opportunities they offer to our own nation's job market.

Ben Topper, a junior at JHU, said "as a mechanical engineer who is paying a lot of money for an education in the United States, I am concerned that many jobs in my field are being relocated overseas.

I worry that the job market will get even more competitive, with more people than ever graduating from universities and now (because of outsourcing) fewer jobs in the states will be available. I am strongly against it."

Still, other Hopkins undergraduates, such as Nikhil Palekar, a computer science major, understand the practicality of outsourcing.

"I think that due to globalization, firms must utilize the advantages of different markets in order to gain a competitive advantage so if labor is cheaper in a particular geographic location and the goods produced or quality as those provided in a more expensive market, it is necessary that firms utilize this disparity in costs to their advantage..."

Students do have reason to worry however. According to a recent study by the Information Technology Association of America (ITAA), the migration of tech jobs to low-paid foreigners has eliminated 104,000 American jobs, nearly 3 percent of the positions in the U.S. technology industry. The study insists however that although outsourcing has thrown some Americans out of work and hinders the hiring of hundreds of others, the trend will ultimately lower inflation, create jobs and boost productivity in the U.S.