Bwa ha ha ha!!

The Los Angeles Times reports that the political tide may be turning on offshore outsourcing:

Although public opinion polls show Americans are worried about this outsourcing of jobs, few people appear willing to back that up if it means spending more money or more time. Even those who have lost jobs sometimes express more resignation than outrage. The lack of widespread passion on the subject, some say, helps explain why dozens of measures in Congress and state legislatures for limiting outsourcing have failed to gain much traction. And the presumptive Democratic presidential nominee, Sen. John F. Kerry of Massachusetts, who in February characterized executives who outsourced as traitors, lately has toned down his rhetoric on the subject. Against this backdrop, the nation’s unemployment report for April — to be released Friday — becomes crucial. A strong report, coming on the heels of March’s impressive net gain of 308,000 nonfarm jobs, will diminish remaining incentives to restrain outsourcing. Sluggish job growth, on the other hand, will conjure up the slack reports of last winter. Outsourcing became a prominent election issue in December after a string of poor job reports sparked fears that U.S. job creation was in a long-term slump. Opponents of outsourcing aren’t sure how they were put on the defensive so quickly. “It was shocking to find a Democratic-controlled House in the liberal state of Washington could not pass a significant piece of legislation dealing with the offshore-outsourcing issue,” said Marcus Courtney, president of the Washington Alliance of Technology Workers. The bill would have prohibited state contracts from being sent overseas. Courtney blamed “a nationally coordinated lobbying effort by corporate America” for the fact that none of the 80 bills in Congress and legislatures has passed.

It’s just coordinated lobbying?! What about well-honed rhetoric backed by cogent analysis and hard data? [Yeah, you know it’s actually the lobbying, right?–ed. Allow me my meager illusions of influence, OK?] Part of the Times’ reasoning is based on the E-loan experiment that I blogged about in March. Consumers are given a choice between having their paperwork processed in 10 days overseas or 12 days in the United States. According to the LAT, “In the three months that ended Monday, 85.6% of 14,329 loan applicants chose processing overseas.” Meanwhile, Miguel Helft writes in the San Jose Mercury News that data privacy concerns with regard to offshore outsourcing are grossly exaggerated:

like most issues in the polarized debate over outsourcing, the privacy fears are stoked by hype, misconceptions and a dose of xenophobia. Preventing personal data from going overseas will do little to keep Americans safe from privacy violations and identity thieves. Unless Americans get better privacy protections at home, they’ll continue to be victimized by unscrupulous businesses and criminals. To be sure, there have been some well-publicized privacy horror stories overseas. But American companies have been handling credit cards and financial records offshore for years with no evidence that there are any more privacy abuses or breaches overseas than domestically. “The security of data is not determined by where it is geographically,” says Dave Wyle, president and CEO of SurePrep. Wyle’s California-based company employs a largely Indian workforce to help accounting firms with data entry and other tasks involved in tax preparation. Wyle describes SurePrep’s Indian operations as airtight. Customer data is stored at a highly secure data center in Irvine. All electronic correspondence with India is scrambled with the highest level of commercially available encryption. At the Indian offices there are no removable data storage devices, no printers, no Internet connections or telephones that reach outside the building. Workers aren’t even allowed to bring paper and pens to take notes or cell phones to make unauthorized calls. By comparison, Wyle says, at U.S. firms you’ll find paper files stuffed with sensitive data lying around, data stored in removable hard drives and e-mail everywhere. “SurePrep has better security than any firm I’ve ever seen,” says Wyle. I have no way to confirm Wyle’s claims, and it’s likely that many other firms are less careful than SurePrep. But Wyle makes a good point. American companies have been hacked countless times. Rogue employees have stolen and sold data from the most pedigreed blue chip companies. Once stolen, data is only a click away from Romania, Russia or any other organized crime haven. Because privacy laws in the U.S. are weak, at best, companies that are lax about data security rarely face consequences. “We need to get our privacy protections in order first, before we start chastising other countries,” says Chris Larsen, CEO of E-Loan.

Read both pieces.