November 25, 2024
Business

Company resists shipping jobs overseas

PORTLAND – The publisher of Maine Antiques Digest says his small company in Waldoboro is proof that it isn’t just large firms that are being tempted to send work to other countries where costs are cheaper.

A Philippine company recently sent Samuel Pennington a letter and brochure offering to design and lay out his paper, make advertising sales calls and develop content from Manila, the Philippine capital, on the other side of the world.

Pennington turned down the offer, but the letter has him convinced that outsourcing jobs to other countries is more than a simmering debate in this year’s presidential election.

If foreign companies are reaching companies as small as his, then they are going “pretty far down” to drum up business, he said.

“Outsourcing is a big problem, I think,” Pennington said. “Maybe in 40 years we’ll be making the same as the people in the Philippines. Our standard of living is going down and theirs is going up.”

The threat of losing jobs overseas is particularly worrisome in Maine, which has lost nearly 18,000 manufacturing jobs during the last three years, the nation’s highest rate of production job losses.

Jobs in the service sector, which have been a stable part of Maine’s work force, are increasingly going overseas as well.

For years, it was manufacturing work that moved from U.S. factories to newer facilities in China or Indonesia. Now, the flow of jobs overseas includes white-collar, relatively high-paying jobs, said Christine Ferrusi Ross, a senior analyst with Forrester Research, a high-tech consulting firm.

She noted that a Massachusetts hospital relies on technicians in India to help interpret X-ray and CAT scan results.

“They’re much more focused on what you would think of as an office job,” Ross said.

South Portland-based iCST develops software and provides short-term computer programming help. But about 80 to 90 percent of its software development work is now done in India even though clients have the option of work done overseas or in the United States, said company President Ashok Nalamalapu.

Most choose offshore work because of the cost savings, and programmers in India, many who have advanced degrees in computer science, are often better-educated than their counterparts in the United States, Nalamalapu said.

But because workers in India earn about 20 to 25 percent of the salary of U.S.-based programmers, his clients realize savings of 30 to 50 percent, Nalamalapu said.

Still, many companies are resisting the urge to contract work overseas, Ross said.

“On a pure economic basis, if we all looked at the numbers, we would all be offshore right now,” she said. “The reality is that a lot of the companies don’t want to go.”


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