Saturday, August 20, 2011

Of Obama and Jobless Americans!

Eleven years back, when I came to this country, I would have had hardly imagined, I would be writing this blog by the fall of 2011. Frankly, I don't know this America. As soon as I leave Washington DC -Baltimore area which has not lost jobs thanks to Government spending, elsewhere I see only evidence of how a first world country slipping from its past grace and power. I have visited so many "foreclosure" towns in California and heard about ghost towns of Mid West, I clearly see, this country is on free fall. There is visible declining standard of living, education, research and finally quality of politics.

Now let's start with the basics-Americans don't have jobs. Official unemployment rate is at around 10% but in reality, I think more than 50% of Americans do not have decent income to maintain the lifestyle they once lived.

To be honest, I am even surprised that even 50% of them have jobs. Because every other service job is outsourced to India and manufacturing left for the shores of China and Korea. Those who is decently employed in this country is directly or indirectly related to Govt. spending on health care and defense.

Just think how we spend money-we spend around 30-40% on mortgage/rent, 10-20% on food, 15% on health care, 10% on cars, 10% on education, rest on fashion/lifestyle and saving/investment.

Is mortgage industry producing any job? Marketing, supporting call centers which generate maximum jobs in Mortgage are being outsourced to India. All the ITs in mortgage are being developed from India. All new web-marketing which reduces need for marketing professionals are being done from India. Where are the Americans in this industry except for a few underwriters and loan officers? Those are very limited positions. I repeat, products do not create jobs, only service does.

Now comes to health care. All customer support, IT and R&D in Pharmaceutical are already outsourced to India. Only medical desk jobs are left for the Americans which is perhaps not a lot. I am leaving asides doctors and nurses because those are no ordinary jobs for ordinary Americans. I am thinking for an average America graduate. So what Obama did? He was obsessed with Obamacare and never thought of how healthcare can be structured so that at least healthcare jobs are retained in USA.

Food industry is probably the only industry which is still in the hands of Americans.

Less I speak about spending on lifestyle, better. American lifestyle is exported from China. Perhaps no job except a few designer positions are left there-and if I am right, event those are done from India! No job in manufacturing of life style products.

Auto-industry actually provides solid jobs for Americans as very little can be outsourced.

There is a lot of outsourcing on Financial industry as well-but perhaps not as chronic as in the other sectors.

So where are the jobs for the Americans?

They are in service and manufacturing stupid! And those have been outsourced to create jobs in India and China!

Could America stop it?

It is not possible by political or patriotic action, neither it is advisable to stop a market competition or encourage protectionism.

America needed to innovate to stop these outsourcing -because no bill could have stopped it.


To give an example- let consider customer support for Dell or Comcast. Comcast or Dell didn,t need to spend any money on any dam call center. They would have employed thousands of Americans working from home and doing part time job. Their cost point would have been reduced to below $500 per seat -and I believe they are paying a lot more to Indian call centers They didn't think-neither Americans thought of how we can retain advantage in this competitive market.

Same for lifestyle product. US Govt. needed to spend highly on research on robotics and automation so that cloths can be manufactured just from a computer aided design. US Govt. spent a huge budget on robotics for defense ( which is ok because US is the largest arms exporter) but no money was spent on automation of lifestyle industry. This would have kept a lot of jobs in America. I saw no innovation in this space when state of the arts in robotics would have reversed the trend.

So looking forward, I see US is full of politicians and no statesman like Abraham Lincoln. Obama would have learned his first lesson from Lincoln-do not appease all sections of Americans-set your goal and try to achieve it instead of wasting your time in debate and speech just because you love it. That's what Obama did and still he is doing so. His sole aim is to discredit GOP but he needs to spend more time on innovative ideas.

Politics won't save USA. Only technology and business innovation will do. This country is full of innovators even today-look forward to them and not to the economists or politicians.

Message is simple- Americans have to innovate so that they can beat Indians and Chinese in price and cost of production- or else this high unemployment rate will continue.