But what will happen on Wall Street, at least, seems certain to consultants such as Stan Lepeak, managing director of research at outsourcing advisory firm EquaTerra Inc. in Houston. Lepeak said he expects more outsourcing by financial services to cut costs.
If Congress tries to curb offshore outsourcing, Lepeak said it will be difficult. "To what degree can the government control the business practices of private entities?"
But some of the shift overseas is due to the growing markets in those countries as well, Lepeak said. For financial services firms that deal in wealth management, overseas customers are increasingly important. "If you look at where the new millionaires are coming from, a lot of them are overseas," he said.
Eugene Kublanov, the CEO of Neo IT, an outsourcing management consulting group, in San Ramon, Calif., said that for now, uncertainty will restrain the financial services from taking on new offshore initiatives. But once these firms hit bottom and know where they stand, they will likely start new offshore ventures. It's a pattern, he said, that he has seen in previous downturns.
Kublanov also sees the federal government exerting some leverage on outsourcing, particularly if a Democrat is elected and that may bring incentives to keep jobs onshore and penalties if that isn't the case. The impact could be direct or indirect, through changes in tax incentives and possible restrictions on visas.
Ron Hira, an assistant professor of public policy at the Rochester Institute of Technology and author of Outsourcing America , said Wall Street firms have had a major impact on U.S. economic policy.
Most analysts believe that we are going to have a pretty severe recession, Hira said. "That provides more fertile ground for those advocating positions to level the playing field for American workers. It isn't clear that there is a critical mass of politicians from both parties to overcome the elitist stranglehold in Congress."
"Will the recession be severe enough for the American people to question the current flavor of globalization and economic policy? Probably. Will it be severe enough for elites to question it? That remains to be seen," Hira said.
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