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Wage offer upsets LIC men

These are tough days for workmen. Not just for Tamil Nadu Government staff. Even for Class III and IV employees of the Life Insurance Corporation of India (LIC). The wage talks for 2002-07 have reached a deadlock, it appears.

The management has proposed 8.5 per cent across the board increase in the total wage bill as on August 1, 2002. For 1997-2002 settlement period, there was an effective increase of 14.5 per cent in the wage bill. For 1992-97 settlement period, the wage bill increase was around 13.5 per cent.

Besides a reduced increase in wage bill for 2002-07, the management has made the norms for productivity linked lump sum incentive (PLLI) tougher by adding a few more parameters. Now PLLI is made the function of additional factors like early claims ratio and augmentation of income from real estate. To compound the problems, LIC mandarins have set higher threshold targets in these segments for disbursing PLLI. Surely, the leaders of employees' unions are not amused. As though these are not enough, the management has sought to assert its right to rotate workmen within a division, zone and state. And, it has mooted `outsourcing' of office upkeep, routine cleaning and the like jobs. Not surprisingly, the offer made by the management has elicited the expected negative response from unions of all sorts. It will be interesting to see what course this wage issue takes, especially in the backdrop of the Supreme Court's ruling in the case of TN Government's staff.

Going off track on `offshoring'

Beauty lies in the eyes of a beholder, so goes a saying. Offshoring, likewise, is good and bad depending on, who you are and which country you live in. For most lay Americans, `offshoring' is now a dirty word. MGI (McKinsey Global Institute), however, feels `offshoring' need not be viewed so by Americans. A MGI report finds a software developer in the U.S. costs $60 an hour whereas it costs just $6 an hour for an Indian. Surely, this cost differential should have a positive fallout on the American business. More than anything else, this cost saving for America Inc., the report says, can trigger either price cuts or further investments. Not just that, `offshoring' by U.S. outfits can also see creation of demand for American products (hi-tech ones, at that) especially in `destination countries' like India, for example. The fact that many a service provider is incorporated in the U.S. means that the money it earns is repatriated into the American system. MGI estimates every dollar diverted abroad in the name of `offshoring' creates value of $1.45 to $ 1.47. The U.S. is estimated to capture $1.12 to $1.4 of this and `the receiving country' 33 cents. Are Americans reading MGI report?

K. T. Jagannathan

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