Meet the Zippies

Thomas Friedman jumps on the “outsourcing” issue that’s been the rage of the blogosphere the last few weeks.

“The Zippies Are Here,” declared the Indian weekly magazine Outlook. Zippies are this huge cohort of Indian youth who are the first to come of age since India shifted away from socialism and dived headfirst into global trade, the information revolution and turning itself into the world’s service center. Outlook calls India’s zippies “Liberalization’s Children,” and defines one as “a young city or suburban resident, between 15 and 25 years of age, with a zip in the stride. Belongs to generation Z. Can be male or female, studying or working. Oozes attitude, ambition and aspiration. Cool, confident and creative. Seeks challenges, loves risks and shuns fears.” Indian zippies carry no guilt about making money or spending it. They are, says one Indian analyst quoted by Outlook, destination driven, not destiny driven; outward, not inward, looking; upwardly mobile, not stuck-in-my-station-in-life.

With 54 percent of India under the age of 25 — that’s 555 million people — six out of 10 Indian households have at least one zippie, Outlook says. And a growing slice of them (most Indians are still poor village-dwellers) will be able to do your white-collar job as well as you for a fraction of the pay. Indian zippies are one reason outsourcing is becoming the hot issue in this year’s U.S. presidential campaign.

Somehow, I don’t think this issue will decide the race. Indeed, John Edwards is staking much of his candidacy on it and has won only one state in the Democratic primaries with it.

Taking all this in, two things strike me about this outsourcing issue: One, economists are surely right: the biggest factor eliminating old jobs and churning new ones is technological change — the phone mail system that eliminated your secretary. As for the zippies who soak up certain U.S. or European jobs, they will become consumers, the global pie will grow, and ultimately we will all be better off. As long as America maintains its ability to do cutting-edge innovation, the long run should be fine. Saving money by outsourcing basic jobs to zippies, so we can invest in more high-end innovation, makes sense.

Well, yes. Although it seems to defy the premise of the problem, which is that they’re just as smart and tech savvy (if not more so) and will work for less money.

But here’s what I also feel: this particular short run could be a real bear — and politically explosive. The potential speed and scale of this outsourcing phenomenon make its potential impact enormous and unpredictable. As we enter a world where the price of digitizing information — converting it into little packets of ones and zeros and then transmitting it over high-speed data networks — falls to near zero, it means the vaunted “death of distance” is really here. And that means that many jobs you can now do from your house — whether data processing, reading an X-ray, or basic accounting or lawyering — can now also be done from a zippie’s house in India or China.

I thought “zippies” were, by definition, Indian? And one wonders how much lawyering a Chinese kid is going to be able to do from his house.

And as education levels in these overseas homes rise to U.S. levels, the barriers to shipping white-collar jobs abroad fall and the incentives rise. At a minimum, some very educated Americans used to high salaries — people who vote and know how to write op-ed pieces — will either lose their jobs, or have to accept lower pay or become part-timers without health insurance.

That’s a trend that’s gone on for a couple centuries now. Although, granted, the pace is much faster in the digital age.

“The fundamental question we have to ask as a society is, what do we do about it?” notes Robert Reich, the former labor secretary and now Brandeis University professor. “For starters, we’re going to have to get serious about some of the things we just gab about — job training, life-long learning, wage insurance. And perhaps we need to welcome more unionization in the personal services area — retail, hotel, restaurant and hospital jobs which cannot be moved overseas — in order to stabilize their wages and health care benefits.” Maybe, as a transition measure, adds Mr. Reich, companies shouldn’t be allowed to deduct the full cost of outsourcing, creating a small tax that could be used to help people adjust.

Now, Reich is a really smart economist and I’m just a guy with a blog, but I fail to see how unionizing unskilled labor that’s by definition not mobile is going to solve the outsourcing of white collar jobs.

Either way, managing this phenomenon will require a public policy response — something more serious than the Bush mantra of let the market sort it out, or the demagoguery of the Democratic candidates, who seem to want to make outsourcing equal to treason and punishable by hanging. Time to get real.

What, precisely, does that mean? He doesn’t say–that’s the end of the column.

Update: Matthew Yglesias says Friedman is “totally right.” About what, he doesn’t say.

FILED UNDER: Economics and Business
James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. Kathy K says:

    Perhaps he’s just noting that it’s the (once) white-collar workers that will be doing those non-mobile jobs since it may be all that is left here…

    Regards,
    One of the part-timers.

  2. Al Bullock says:

    Had problems with modem interface. Called my ever handy dandy AOL help desk over in Ashburn.At least, I always thought they were in Ashburn. Nope, all four calls went to India. Well educated and gramatically correct but with a very thick accent. My partially deaf and aging hearing had a difficult time in understanding.

    When AOl management says they are part of the neighborhood one has to understand it was not their jobs that went overseas.

    Between the jobs industry sends overseas and the billions of dollars going back to Central and South America it no wonder jobs are lost and the economy suffers.

    America first. Write AOL!

  3. melvin toast says:

    I’m all for riding around in horse drawn carts and chasing after iron horses with rakes and hatchets.

    The industrial revolution started over a hundred years ago people. We’ve disemployed farmers, butters churns and adding machines. But we don’t care because we’ve got three sets of clothes for every hour of the day. Get Real? Definitely! Time to realize that times the are a changing. You better start swimmin or you’ll sink like a stone!

  4. I come from a family of schoolteachers–very educated people with a habit of working for very little pay.

    I was raised to believe that I could aspire to something higher, and actually “put [my] intelligence to some use.”

    Now I’m being told that won’t happen because someone half a world a way with no cultural literacy and thickly accented English is answering phones. (A phenomenon that I think will stop very soon, for obvious reasons.)

    Can we all just get a grip, here?

  5. RicK DeMent says:

    Problem is that we are outsourcing future expertise along with those jobs. Since there are no low level computer jobs to be had anymore there is no reason for people to get computer science degrees. The entry level jobs are gone too. You don’t graduate from collage with a civil engineering degree and go build Hoover damn. The fact is that if this trend continues, the only people who will be qualified to do the “higher” lever work will be the Zippies, not anyone from the US. Also all the innovation will start coming from India, because they will have the experience, not Americans.

    In fact pretty soon the only job left in the US will be that of a salesman.

  6. D R Lewis says:

    The reason why the zippies are indian this time round (a decade after the real Zippies), is because they represent the true spirit of america – which is: if there are any indians to rip off, then young, white, americans, like yourselves believe you are entitled to rip them off.

    I was one of the 14 zippies who got ripped off by america in a gigantic hoax involving wired magazine and the manufacturers of Dunlop tires. For my troubles, I got paid $10 by a man in a three-piece suit, and was told my goodwill was worth nothing, seeing as how “we already own every teenager in America.”

    I hope someday, you gettit, because I’m getting tired of watching loudmouth yanks on television, thinking they have more right to freedom of speech than any other nation living on this planet.