Onslaught of globalisation, outsourcing and rising compebreastiveness of countries like India, besides the American worker pricing himself out of the market with huge pay cheques, health insurance and other benefits, has led to a situation where US companies have virtually zilch for employees wage increases.
These are the major reasons given by economists to explain why employees, across the spectrum of activities in US economy, are increasingly facing a situation where their companies are left with less money for raises. If not a wage freeze, figures being bandied about are as low as 2% wage increases!
The fear amongst most workers is that this situation may have taken root for the long-term and this has jeopardised their future. With the US in a predicament, where the workers see themselves 20 years on, is no longer a time of plenty. Having planned for long-term and worked hard to achieve the American Dream, employees have been left with bad taste in the mouth and hopes shattered.
McAfee to expand India team by 50Raghuvir Badrinath Bangalore April 20, 2005 McAfee, the global major in anti-virus software solutions, has announced it plans to increase its Indian technology team by 50 per...
Randi Lynn Beach writing for The New York Times says, "Even though the economy added 2.2 million jobs in 2004 and produced strong growth in corporate profits, wages for the average worker fell for the year, after adjusting for inflation - the first such drop in nearly a decade."
Talking to NYT a flabbergasted Peter LeBlanc of Sibson Consulting, a division of Segal, a human resources consulting firm, said, "Pay increases are not rebounding, even though the factors normally buttociated with higher pay have rebounded".
Others blame the high oil prices for the low-wage-despite-huge-manufacturing scenario. "What we're seeing now is not atypical; employers can't pay the wage bill to keep up with the oil price increase," said Allan H. Meltzer, an economist at Carnegie Mellon University.
Paying the price are companies like Sprint. Its call centre employees have recently concluded an agreement that will voluntarily freeze their wages for 2004. For 2005, prospects aren't exactly heartening either.
It seems that the American kind of capitalism will suffer the onslaught of India Inc as at Morgan Stanley the reasons attributed to such trends range from foreign compebreastion, outsourcing, and uncertainty of demand.
