Pay cut: 1,731 euros per month
Avoiding a layoff: priceless?
French textile workers were recently made an offer that most, undoubtedly, refused: relocate to India and work for local wages or lose their job. The Times of London reported May 12 that the Carreman company gave its employees the unenviable choice in part to comply with French labor laws.
Carreman told workers they could keep their jobs if they moved to Bangalore at a 96% pay cut, according to the Times. They were not offered airline tickets. A recent online search put the cost of a one-way ticket from Charles De Gaulle airport in Paris to Bangalore airport at about $628, with a plane change.
Offshoring jobs to relatively cheaper Asian and Eastern European countries, such as India and the Czech Republic, has long been a subject of contentious debate in both Europe and the United States. But the global economic downturn has pushed the issue into the headlines again. Faced with sharp drops in demand, many companies are choosing to cut costs by moving jobs to cheaper countries. In March, IBM announced that it would cut 4,000 jobs and move them to India, sparking a public outcry. Forrester research estimates that as many as 3.3 million jobs will move overseas by 2015.
The acceleration of work moving overseas has spurred politicians to take action. This month, President Barack Obama promised to close tax loopholes for companies that move work abroad (whether by hiring foreign workers for the same jobs, aka offshoring, or contracting out jobs to foreign companies, aka outsourcing, is not clear).
"I want to see our companies remain the most competitive in the world. But the way to make sure that happens is not to reward our companies for moving jobs off our shores or transferring profits to overseas tax havens," Obama said in a May 4 speech announcing plans to change the tax code to help discourage outsourcing.
French Prime Minister Nicolas Sarkozy has made similar promises, backing laws intended to reduce the number of jobs moving outside of France and offering to help bail out the country's auto industry only if the auto manufacturers did not move jobs to other countries.
The Carreman case is just one example of the consequences such laws can have, intended or not. IBM also offered to allow employees to keep their jobs if they moved abroad to cheaper countries.
Related links:
Extra: Outsourcing actually creates jobs, study finds
How you can still buy American
10 ways you can still buy American
Could Indian outsourcing be in trouble?
How Obama would fix the economy
