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

[EastAnglianLefty]

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.

Also the fact that McDonnell has always been known to be a serious political operator. You don't put somebody on the ballot to widen the debate if you think they actually will widen it.

[CumbrianLefty]

Yes, that as well.

[Open Source Intelligence]

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.

From my personal experience productivity lags and knowledge transfer falls off a cliff. Also, when layoffs inevitably come some point off in the future, my sneaking suspicion is the remote workers are gone first all other things being equal. The ones that are star performers won't be let go, but how many star performers in your company do you really think there  are? You're all being compared and ranked internally, so your grading scale is relative from the start.

Guy in the cube next to me after Covid hit I saw 1 day in 2 years. Damned if I could tell you a single thing of note he contributed.

[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.

From my personal experience productivity lags and knowledge transfer falls off a cliff. Also, when layoffs inevitably come some point off in the future, my sneaking suspicion is the remote workers are gone first all other things being equal. The ones that are star performers won't be let go, but how many star performers in your company do you really think there  are? You're all being compared and ranked internally, so your grading scale is relative from the start.

Guy in the cube next to me after Covid hit I saw 1 day in 2 years. Damned if I could tell you a single thing of note he contributed.

His supervisor will know what, if anything, he contributed.

[quesaisje]

From my personal experience productivity lags and knowledge transfer falls off a cliff. Also, when layoffs inevitably come some point off in the future, my sneaking suspicion is the remote workers are gone first all other things being equal. The ones that are star performers won't be let go, but how many star performers in your company do you really think there  are? You're all being compared and ranked internally, so your grading scale is relative from the start.

Guy in the cube next to me after Covid hit I saw 1 day in 2 years. Damned if I could tell you a single thing of note he contributed.

This sounds consistent with my experience. But I would put a different spin on it.

Most knowledge transfer problems are solvable with better documentation. The lack of that documentation probably imposed significant costs on the organization even in a non-remote environment. It's just that no one was measuring them.

Productivity monitoring is improved, because managers can focus on work products without having to care about whether it looks like someone is working. This also makes the laggards more obvious. If a remote team is less productive, odds are it's either because their manager isn't paying attention or because the organization doesn't empower managers to deal with under-performers.

I'm also less sure that what you say about layoffs is true in most cases, especially as working remotely makes a team less of a cost center. It probably means that the highly productive worker is less vulnerable, all else being equal, and that the person who brightens everyone's day with a smile in the break room is more vulnerable. But doesn't that even out? For a high performer who was offending much of the office with their body odor and off-putting attempts at small talk, maybe they're much better off.

[Zinneke]

Jesus people, do not fall into the trap of thinking remote work should become the norm. It utterly destroys social fabrics, it doesn't allow serious negotiation between non-sociopathic human beings, it is a path to race to the bottom social standards...no wonder the American techbros are pushing it the most.

[Open Source Intelligence]

From my personal experience productivity lags and knowledge transfer falls off a cliff. Also, when layoffs inevitably come some point off in the future, my sneaking suspicion is the remote workers are gone first all other things being equal. The ones that are star performers won't be let go, but how many star performers in your company do you really think there  are? You're all being compared and ranked internally, so your grading scale is relative from the start.

Guy in the cube next to me after Covid hit I saw 1 day in 2 years. Damned if I could tell you a single thing of note he contributed.

This sounds consistent with my experience. But I would put a different spin on it.

Most knowledge transfer problems are solvable with better documentation.
 The lack of that documentation probably imposed significant costs on the organization even in a non-remote environment. It's just that no one was measuring them.

I'm an engineer that has tried to make sense from documents from the 1970s before when coming across problems, so yes, in a perfect ideal world, we have great documentation. But in reality, we don't, and while documentation can tell you what changed or what the design is, it typically doesn't tell you why it changed or why the design isn't something else. That requires a 10-minute conversation in-face typically. Email has reached the end of effectiveness when you can receive hundred plus a day. So you might get an answer to your question, might not, while a walk over to a cubicle you can get design history and the why instantaneously. That also improves productivity to get an answer now versus 3 days from now when a person is clearing out the email cache. Direct chat does help but like email requires acknowledgement first so it works great with a limited number of people, not for a lot.

I'm also less sure that what you say about layoffs is true in most cases, especially as working remotely makes a team less of a cost center.

Depends on industry. My job requires a manufacturing and testing facility that cannot be just propped up anywhere, so a cost center will always be present. If you're on the creative side of a publisher for example, yeah, I can see how the entire office can be made redundant. 100% remote also ensures there's no such thing as culture which can be important. I work with people that are entirely remote and sometimes I can't tell you how much I wish I could just walk to their desk and talk to them through issues we're having to resolve them.

[MasterJedi]

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.

Companies want their US workforces in office because they have a huge amount of real estate losing money if they don’t. They’re happy to allow it if it brings them profit at the top while bending the common man over.

[Skill and Chance]

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.

It depends entirely on whether remote work actually = not having to pay for real estate (or only having to pay for, say, half as much).  If you can get to the point where you don't even have a physical office and you just fly the team into a hotel ballroom for company meetings every 3-6 months, then you're clearly winning.  If there is an inherently physical component to the business and you have office space adjacent to it, you are probably losing. 

There's also a significant pro-family aspect to remote work.  It's kind of surprising to me that doesn't factor more in who supports/opposes it.

[Open Source Intelligence]

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.

It depends entirely on whether remote work actually = not having to pay for real estate (or only having to pay for, say, half as much).  If you can get to the point where you don't even have a physical office and you just fly the team into a hotel ballroom for company meetings every 3-6 months, then you're clearly winning.  If there is an inherently physical component to the business and you have office space adjacent to it, you are probably losing.  

There's also a significant pro-family aspect to remote work.  It's kind of surprising to me that doesn't factor more in who supports/opposes it.

I don't think you can divide it that easily. There's a pro-family aspect for example to homeschooling, that doesn't mean everyone anti-homeschooling are anti-family.

I see if "remote near everything" is the future it's going to do what globalization did to U.S. manufacturing slowly and gradually. Why if I could have nothing but remote workers would I ever hire anyone living in New York City or Chicago or San Francisco or any major city when you could hire someone with the same qualifications that lives in Randomville, could get paid half the rate, and have a higher standard of living once you account for local living costs? Heck, why not have a bunch of Mexican office workers living in Mexico? You can pay them 10-20% and that's still a good job there. How do labor laws work in a 100% remote company? If a person living in Manitoba sues her supervisor living in Connecticut for online sexual harassment for a company that used to be based in Illinois, no longer is post-going fully remote, but the corporate place of organization is Delaware, what state or province's judicial system carries the day? I imagine some version of that has happened somewhere before so there's a little precedent, but quick and easy it likely was not with every lawyer pushing jurisdictional battles.

[Dan the Roman]

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.

It depends entirely on whether remote work actually = not having to pay for real estate (or only having to pay for, say, half as much).  If you can get to the point where you don't even have a physical office and you just fly the team into a hotel ballroom for company meetings every 3-6 months, then you're clearly winning.  If there is an inherently physical component to the business and you have office space adjacent to it, you are probably losing.  

There's also a significant pro-family aspect to remote work.  It's kind of surprising to me that doesn't factor more in who supports/opposes it.

I don't think you can divide it that easily. There's a pro-family aspect for example to homeschooling, that doesn't mean everyone anti-homeschooling are anti-family.

I see if "remote near everything" is the future it's going to do what globalization did to U.S. manufacturing slowly and gradually. Why if I could have nothing but remote workers would I ever hire anyone living in New York City or Chicago or San Francisco or any major city when you could hire someone with the same qualifications that lives in Randomville, could get paid half the rate, and have a higher standard of living once you account for local living costs? Heck, why not have a bunch of Mexican office workers living in Mexico? You can pay them 10-20% and that's still a good job there. How do labor laws work in a 100% remote company? If a person living in Manitoba sues her supervisor living in Connecticut for online sexual harassment for a company that used to be based in Illinois, no longer is post-going fully remote, but the corporate place of organization is Delaware, what state or province's judicial system carries the day? I imagine some version of that has happened somewhere before so there's a little precedent, but quick and easy it likely was not with every lawyer pushing jurisdictional battles.

The big shift will be state income taxes. New Hampshire and Massachusetts already went to court over remote work. With Boston becoming the new biotech center, expect a large number of companies to begin "relocating" to Concord/Manchester. New Hampshire is the only state with no income tax within 800 miles.

[Damocles]

The eternal Anglo strikes again!

[Benjamin Frank 2.0]

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?

This is a logical fallacy known as the fallacy of composition.

The fallacy of composition is an informal fallacy that arises when one infers that something is true of the whole from the fact that it is true of some part of the whole. A trivial example might be: "This tire is made of rubber; therefore, the vehicle of which it is a part is also made of rubber."

[Benjamin Frank 2.0]

I like how some people here say that making people work in the office is 'neo liberalism screwing over workers', while other people here say that allowing people to work at home is 'neo liberalism screwing over workers.'

[CumbrianLefty]

Its almost as if neoliberalism can "screw over workers" in more than one way!

[Zinneke]

I like how some people here say that making people work in the office is 'neo liberalism screwing over workers', while other people here say that allowing people to work at home is 'neo liberalism screwing over workers.'

The difference is one is a "false friend" of those opposing neo-liberalism. A lot like UBI.

[It’s so Joever]

A hybrid model is probably the best for companies to adopt in terms of productivity.

[Libertas Vel Mors]

Over the last 35 years, the US has pursued a far more capitalist set of policies than the UK. We are now seeing the consequences of that when combined with modern technologies. Great thanks must of course also be given to our constitutional structure, which has stopped attempts at expanding the size of our government.

[jojoju1998]

Over the last 35 years, the US has pursued a far more capitalist set of policies than the UK. We are now seeing the consequences of that when combined with modern technologies. Great thanks must of course also be given to our constitutional structure, which has stopped attempts at expanding the size of our government.

Well it's also the fact, that the UK Upper Class is not that....  modern. It's basically a bunch of land lords, so they have no incentive, or don't feel the need to invest in industry.

The American Upper Class, or at least the main bulk of it, was created through the industrial revolution. Look at Andrew Carnegie for example. And compare him to say this guy here, https://en.wikipedia.org/wiki/John_Crichton-Stuart,_3rd_Marquess_of_Bute#Interests.

Two very different sources of wealth. John Crichton Stuart's wealth was inheritated through land holdings. Andrew Carnegie built his wealth through industrizalition.


I reccomend everyone read this article here that talks about the aristocratic land holding nature of the British Upper class, and how that has led to the UK's decline. https://www.palladiummag.com/2023/04/27/britain-is-dead/

"Britain’s culture of governance expresses the culture and priorities of its political and administrative elite. Questions about that culture are ultimately questions of elite sociology. Entrance into the British elite has slowly become more meritocratic over the generations in a formal sense, with the imperial Chinese exam system influencing the Northcote-Trevelyan Report of 1854. This in turn led to the removal of informal patronage structures. But an informal system of social selection persisted long into the twentieth century, minimizing the potential costs to institutional memory and group social engineering. British institutions continued to prioritize a humanist and professional elite in running a vast industrial, scientific, and commercial empire.

What differentiated the British elite of this time from most of Europe was the embrace of capitalist production by much of its aristocracy. Despite disputes on protectionism, the emergent middle class never experienced the same level of conflict with the nobility as their French or American counterparts. Compare, for instance, the backgrounds of two elite class premiers: George W. Bush and David Cameron. Bush’s patrilineal great-grandfather Samuel P. Bush established the family’s political dominance through technical education and the management of a firm that manufactured steel railway parts.

In contrast, Cameron’s father, paternal grandfather, and great-grandfather were all Oxford-educated partners in the stockbroker’s firm Panmure Gordon & Co, while another Sir Ewen Cameron was chairman of HSBC. His maternal grandfather came from a family of minor titled gentry and military officers. The differentiating factor between the two major factions of the British elite was whether they derived rents from aristocratic land holdings or professional-class financial speculation. Neither built their fortunes on the industrial basis that enriched the Bush family and many of their American peers.

The British analogs of the Bush clan—manufacturing and infrastructure-owning families—were often nonconformist protestants excluded from the Church of England and thus from educational routes into administration and politics. Instead, they either collaborated with the state at a distance or sought to join it by phasing out manufacturing and using the profits to buy land and professional education. It was not until the late nineteenth century, by which time the UK was falling behind the U.S. and Germany, that non-elite merchants like the Liberal MP, Unitarian, and screw manufacturer Joseph Chamberlain found a way into political office.

The resulting British state was over-geared towards non-productive economic rent-seeking. In effect, Britain didn’t have an incentive to chase development for survival, because it was the dominant power of early industrialization. Consequently, it never produced an elite whose primary base of power and wealth was industrial production, and which thus had a strong stake in developing and maintaining an industrial society.

Religious and social exclusion from Oxford and Cambridge meant that the middle classes did not share the generalist education of most British elites. The avenue into power for this synthetic class had for much of the nineteenth and twentieth centuries been the Oxford literae humaniores course in classical Greek and Latin, often supplemented by study for civil service exams focused on British constitutional history. These exams, both old and new, have produced a generalist administrative class with institutional and humanistic knowledge but little technical skill. Even after such restrictions were lifted, however, tensions kept rising between the old preference for general education and the bourgeois need for technical expertise."

[jojoju1998]

It should be noted that in countries where industrilization was successful like the US, or even Germany, the power of the " aristocratic " land owners was greatly reduced, by ironically, Government mandate, or in the US's case, revolution/civil war.

In Germany for example, they had the junker Class, aristocratic landowners, and they were forced by the Government to basically give up their lands.

The UK never had that. The UK Government never forced it's land owners to give up land. And so the land owners still to this day, have far more power than they should.

[David Hume]

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

Some "high end" white-collar works that would look bad if outsourced to India, has already been outsourced to UK. One example is headhunter in finance.

[Filuwaúrdjan]

Over the last 35 years, the US has pursued a far more capitalist set of policies than the UK. We are now seeing the consequences of that when combined with modern technologies. Great thanks must of course also be given to our constitutional structure, which has stopped attempts at expanding the size of our government.

Thirty five years ago the British Prime Minister was Margaret Thatcher, who had recently entered her tenth year in power. She was replaced the following year by John Major, whose government pushed through some of the most radical and controversial of the 1979-97 Conservative privatizations and expanded further on Thatcher's marketization policies in parts of the public sector. The Labour government in officer from 1997 until 2010 (under Tony Blair's leadership until 2007 and thereafter under Gordon Brown's) pursued a policy of implementing traditional socialist goals using market mechanisms and the fruits of the deregulated financial services sector. Social spending increased significantly as did some regulation in certain fields, 'yet' the period was marked by widespread prosperity up until the financial crisis of 2008. Since 2010 we have had Conservative governments under an embarrassingly lengthy list of Prime Ministers (Cameron 2010-16, May 2016-19, Johnson 2019-22, Truss 2022, Sunak 2022-present). All of these Conservative Prime Ministers have had right-wing economic agendas, with the Cameron era policy of 'Austerity' being particularly significant, along with Truss managing to spook the markets so severely during her extremely brief period in office that a major run on the pound was triggered almost immediately. If the present government lacks much room for maneuverer on this front, it is largely due to the social damage done by 'Austerity' coupled reduced credibility with the markets due to 'Liz Truss', along with the post-pandemic issues that have been a problem everywhere.

[Open Source Intelligence]

Over the last 35 years, the US has pursued a far more capitalist set of policies than the UK. We are now seeing the consequences of that when combined with modern technologies. Great thanks must of course also be given to our constitutional structure, which has stopped attempts at expanding the size of our government.

You could expand that to Europe and not be far off. Financial Times in the past has pointed out the kind of business development done in Silicon Valley there's no European equivalent, pointing out at the time the greatest European software product developed was Skype but nothing followed up on it  (this was some years ago, things might've changed since then and I don't keep up on the latest IT product). When more recently asking where are the European versions of Elon Musk and Jeff Bezos developing private space enterprises, that it's probably a difference in wealth generation (the FT are to be clear critical of this, but there are still science/technology improvements generated by the money marks). Musk and Bezos became filthy rich off technology advancement so it's a bit of a follow-on. The richest European businessman in contrast was a Frenchman off of luxury goods like handbags. So not quite the equivalent of a person that would be seeking to do technologically difficult but could make you famous things. As a possible side-reason for it all, in something else mentioned by the FT, it cannot be underestimated how much of a benefit American business as compared to say British business the effect of our stock market and passive investors just flooding it with retirement funding.

[omar04]

Over the last 35 years, the US has pursued a far more capitalist set of policies than the UK. We are now seeing the consequences of that when combined with modern technologies. Great thanks must of course also be given to our constitutional structure, which has stopped attempts at expanding the size of our government.

Thirty five years ago the British Prime Minister was Margaret Thatcher, who had recently entered her tenth year in power. She was replaced the following year by John Major, whose government pushed through some of the most radical and controversial of the 1979-97 Conservative privatizations and expanded further on Thatcher's marketization policies in parts of the public sector. The Labour government in officer from 1997 until 2010 (under Tony Blair's leadership until 2007 and thereafter under Gordon Brown's) pursued a policy of implementing traditional socialist goals using market mechanisms and the fruits of the deregulated financial services sector. Social spending increased significantly as did some regulation in certain fields, 'yet' the period was marked by widespread prosperity up until the financial crisis of 2008. Since 2010 we have had Conservative governments under an embarrassingly lengthy list of Prime Ministers (Cameron 2010-16, May 2016-19, Johnson 2019-22, Truss 2022, Sunak 2022-present). All of these Conservative Prime Ministers have had right-wing economic agendas, with the Cameron era policy of 'Austerity' being particularly significant, along with Truss managing to spook the markets so severely during her extremely brief period in office that a major run on the pound was triggered almost immediately. If the present government lacks much room for maneuverer on this front, it is largely due to the social damage done by 'Austerity' coupled reduced credibility with the markets due to 'Liz Truss', along with the post-pandemic issues that have been a problem everywhere.

Are there any good overviews of austerity you would recommend? My general impression at the moment is that the Conservatives generally decided to slash basic social programs ranging from parks to youth programs while shielding pensioners from the worst of austerity cuts.

[CumbrianLefty]

The calculation - for a while a very successful one - was that most of "their" voters would not be very affected, and to the extent they were could be fobbed off with stories about how various "out groups" were to blame (malingerers/benefit scroungers, wasteful Labour councils and so on)

However, the decay of Britain's public realm is now obvious to all but the most blinkered boomers.