WSJ: US Companies Outsourcing White-Collar Work to UK in Search of Lower Wages

[pikachu]

Link

It isn’t just films. American businesses are sending all types of work across the Atlantic, drawn by depressed U.K. salaries, tax incentives and a weak currency. This isn’t the traditional outsourcing model of the 2000s, which saw the mass relocation of American manufacturing jobs to China, or call centers to India and other parts of the developing world.

Instead, the U.K.’s cost advantage has collided with the rise in remote work to allow high-skilled jobs—software developers, consultants, lawyers, film producers—to be done by people in Britain.

“In the old models of outsourcing you’d give the outsourcing company the boring work. But there’s the new breed of outsourcing that is cheaper but also often creative,” said Matt Buckland, who spent two decades as a tech recruiter in the U.K. for companies including Facebook. “You might still give your team in Hyderabad basic Python code. In the U.K. you might give them AI.”

Surging wages and staff shortages in the U.S. are further incentives to look across the pond.

The average salary for a back end software developer in the U.S. is near $130,000, though closer to $175,000 in cities such as San Francisco and New York, according to data from global recruitment agency Robert Half. In the U.K., a developer’s average salary is about $66,000.

The cost of living explains only part of the gap. Software developers in Cleveland—one of the poorest major U.S. cities—can outearn peers in London by about $40,000, according to Robert Half’s data. Roles in finance, accounting and marketing have similar trans-Atlantic pay gulfs.

“The strength of the [U.S. economy] over the last 15 years has pushed wages up and made it more attractive to offshore,” said Nick Bloom, a Stanford University economics professor who studies outsourcing. “If you’re based in New York or San Francisco it’s now going to be cheaper to offshore to northern England than to Mississippi or Alabama.”

[PSOL]

You can’t put America First with capitalism.

[Continential]

Good to see the UK become a third world country

[lfromnj]

If work can be done remotely then why pay someone higher wages here ? One of the dumbest movements in recent history to start demanding full remote work.

[Big Abraham]

Brexit has and will continue to accelerate Britain's economic dependence on the U.S. For some time now, John Bull has failed to  sufficiently demonstrate he is willing to aspire to be anything other than an American client state.

[LabourJersey]

This, I think, is much worse for the UK than the US.

[jojoju1998]

I actually wonder why the UK hasn't been able to develop it's own industry. It has alot of good companies right ? rolls Royce. Shell. Unilever. Why can't it harness those companies ?

[Benjamin Frank 2.0]

Everything finds its own level.

[PSOL]

I actually wonder why the UK hasn't been able to develop it's own industry. It has alot of good companies right ? rolls Royce. Shell. Unilever. Why can't it harness those companies ?

They voted for the Tories for decades and were stupid enough to pass on the likes of Foot and Corbyn who would have fixed everything.

[Filuwaúrdjan]

This is not actually presently happening, for what it's worth.

[Upper Canada Tory]

If the article is describing a real phenomenon, I am not sure what the point of this is for the companies. Yes UK wages are lower, but UK workers are also less productive. They would benefit from a reduction of costs but also suffer from a roughly equal loss of output? (Though I am not sure if and how remote work affects the difference in productivity)

Also, if companies are so desperate for wages, why go all the way across the ocean to the UK? Why not hire Canadian workers, whose wages are also lower than those of Americans?

[Pouring Rain and Blairing Music]

Good to see the UK become a third world country

Idk if I’d say “good,” but they’re reaping what they sowed in 2016.

[PSOL]

Good to see the UK become a third world country

Idk if I’d say “good,” but they’re reaping what they sowed in 2016.

Brexit was good actually. Getting out of that Nietzschean monstrosity was the only wise electoral choice Great Britian made in decades. Their real sowing was with the election of Margaret Thatcher.

[ingemann]

I actually wonder why the UK hasn't been able to develop it's own industry. It has alot of good companies right ? rolls Royce. Shell. Unilever. Why can't it harness those companies ?

You know how American management has a reputation for being short sighted? Well British management have a reputation for that even more so, while also having a reputation for incompetence.

[Cassius]

[CumbrianLefty]

Good to see the UK become a third world country

Idk if I’d say “good,” but they’re reaping what they sowed in 2016.

Brexit was good actually

It really absolutely was not - and I am far from a starry eyed #FBPEer.

[2952-0-0]

Also, if companies are so desperate for wages, why go all the way across the ocean to the UK? Why not hire Canadian workers, whose wages are also lower than those of Americans?

They do. The tech sector in Toronto now has more jobs than the Bay Area. But it's entirely due to outsourcing by US-based tech giants. The only local champion I could think of is Shopify.

[Beet]

I remember watching an old video of a debate on American civil rights from the mid-1960s, which took place in the UK, in which one of the conservative speakers stated that the average Black American has a higher average income than the average White Brit.

This is nothing new.

[Upper Canada Tory]

Also, if companies are so desperate for wages, why go all the way across the ocean to the UK? Why not hire Canadian workers, whose wages are also lower than those of Americans?

They do. The tech sector in Toronto now has more jobs than the Bay Area. But it's entirely due to outsourcing by US-based tech giants. The only local champion I could think of is Shopify.

Our very high and currently rising unemployment rate suggests otherwise.

I'm sure there is some outsourcing to Canada but why isn't there more job growth here?

[oldtimer]

I remember watching an old video of a debate on American civil rights from the mid-1960s, which took place in the UK, in which one of the conservative speakers stated that the average Black American has a higher average income than the average White Brit.

This is nothing new.

That's true.

If Britain had free movement with America everyone would leave like it was 1850, since there wouldn't be a language or culture barrier.

[PSOL]

Good to see the UK become a third world country

Idk if I’d say “good,” but they’re reaping what they sowed in 2016.

Brexit was good actually

It really absolutely was not - and I am far from a starry eyed #FBPEer.

The current horror show would not have happened if northerners turned out for Corbyn. McDonald should have been the candidate instead to reach out to these voters, as Corbyn’s personality is weak for these voters, but that still doesn’t change the fact that the decades of Tory and blairite rule destroyed Britain and voters should have known better.

The re-entrance to the EU by Starmer will be his first major crime against the masses.

[MaxQue]

Also, if companies are so desperate for wages, why go all the way across the ocean to the UK? Why not hire Canadian workers, whose wages are also lower than those of Americans?

They do. The tech sector in Toronto now has more jobs than the Bay Area. But it's entirely due to outsourcing by US-based tech giants. The only local champion I could think of is Shopify.

Our very high and currently rising unemployment rate suggests otherwise.

I'm sure there is some outsourcing to Canada but why isn't there more job growth here?

No company can access financing due to the corrupt Bank of Canada keeping interest rates artificially high.

[Zinneke]

Adjust the wage disparity to PPP and it is not that big of a difference.

[CumbrianLefty]

Good to see the UK become a third world country

Idk if I’d say “good,” but they’re reaping what they sowed in 2016.

Brexit was good actually

It really absolutely was not - and I am far from a starry eyed #FBPEer.

The current horror show would not have happened if northerners turned out for Corbyn. McDonald should have been the candidate instead to reach out to these voters, as Corbyn’s personality is weak for these voters, but that still doesn’t change the fact that the decades of Tory and blairite rule destroyed Britain and voters should have known better.

The re-entrance to the EU by Starmer will be his first major crime against the masses.

Andy McDonald is a nice guy, but never really leadership material.....

Oh, you meant John Mc*Donnell*??

Sadly, his remarks about the IRA back in the day meant he would never even have got on the ballot.

[DaleCooper]

If work can be done remotely then why pay someone higher wages here ? One of the dumbest movements in recent history to start demanding full remote work.

The blame seems misplaced to me. Corporate obsession with control might have allowed hybrid work to last a tiny bit longer, but sooner or later they'd realize that there is no benefit whatsoever to having workers in an office when they can do the same thing remotely. At most they might've bought themselves a year or two.