Welcome to the age of Remote Control Journalism—that’s what Pete Szekely, who is the chairman of the Reuters unit of the Newspaper Guild, calls the news we’re going to get from sources like Reuters. I ran into Pete yesterday. He reminded me of an important development that’s worth updating: Reuters is moving a number of jobs previously done in the U.S. to Bangalore, India.
Reuters started by having Bangalore journalists create corporate earnings tables but is expanding quickly to include reporting work. Reuters has also set up a polling unit in Bangalore to make calls to collect data. And Reuters is planning to expand its Singapore operation by moving picture editing there, consolidating all picture operations from around the world to that country.
Now, let’s not think that behind this development is a desire to give us better news. Listen to Tom Glocer, the chief executive of Reuters, who spoke via a previously-unreported Reuters-Citigroup Media Conference:
At the same time, we are reducing our own costs by staffing up a lot in Bangalore. We are up to about 350 people there and we think we will get to about 1,200-1,500 when we are done. The amazing thing is, and this is just the dirty little secret about outsourcing that people need to talk about publicly a bit more, not only is the cost conflation amazing at four, five or even siz to one, but the quality and productivity is better, too. We are flooded! We have 100 qualified applications for every data input person and these people have qualified accounting degrees. [emphasis added]
Well, Tom, glad you’re just brimming with orgasmic excitement. To translate this into real human lives, according to Szekely, a Reuters news associate in the U.S. gets paid about $43,000 a year. In Bangalore? About $8,000 a year. A correspondent pulls down $76,000 in the U.S. compared to the comparable job in Bangalore earning about $30,000. Wages are not as low in Singapore but still a difference: local hires on the picture desk would range from $18,200-$24,400 (based on on exchange rates at end of 2004), compared to a salary for picture desk employees in Washington, D.C. ranging from about $57,000 to about $85,000 (most people are on the higher end in Washington because they have worked for Reuters for some time).
As Szekely says:
The first story I ever wrote about 30 years ago was I heard a police scanner, a car had slammed into a bar, I went down there, saw the car through a plate glass window, people were stumbling around. I wrote all of this down and I had a better story because I had been there. Sure, we all do some reporting on the phone. Reuters has taken this to an extreme, you’re having people who are in a different country, a different time zone, a different day trying to write about companies on the other side of the world and will have to make news judgments for people here in a different culture. It has nothing to do with the area where the news occurred and where it’s going to be consumed.
Beyond the obvious rant against off-shoring (and I express some uneasiness about the outrage about off-shoring because it can often veer off into xenophobia), here’s what I think is worth taking away: This is a great example of the bankruptcy of the liberal view, most prominently pushed by academics like Robert Reich, that our salvation in the global economy of today is to just get smarter. We’re too dumb, Reich likes to, essentially, say. Just go back to school, and you’ll be fine. Reich, who actually has never had a real job outside academia, likes to do what conservatives do: blame the victims. It’s your fault, working America, that the jobs are disappearing.
The Reuters example exposes such musings as pure nonsense. You have highly-skilled people like Szekely’s people being replaced by highly-skilled, literate people in India. As professional as they are, Szekely’s folks are fighting a hard battle fought on a very difficult front: wages. The only problem we have that we have the power to fix has nothing to do with our education or skills. But, this is a problem of politics and economic power, which can only be solved when we find a way to control the trading of wages as the commodity that fuels the economy.
