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04/05/2005: "Still thinking about outsourcing?"

"An international consulting firm determined that the average labor productivity in the modern sectors of India is 15 percent of that in the United States. In other words, if you hired an average Indian worker and paid him one-fifth of what you paid an average American worker, it would cost you more to get a given amount of work done in India than in the United States. Paying 20 percent of what an American worker earns to someone who produces only 15 percent of what an American worker produces increases your labor costs, even though you are hiring "cheap labor" and are virtually certain to be accused of exploitation."
Applied Economics: Thinking Beyond Stage One, by Thomas Sowell's (P.41)