Second Exam, Econ. 310, Spring 2004.
Name:____________________________________
Score:_______
Question 1 (40 points). Consider the firm depicted on the next page which is producing
100,000 units of output domestically using 4,000 workers at a total cost of $100,000 at
point A.
1. If the cost of labor in the U.S. is $20 per unit and the cost of capital is $100, how
many units of capital is the firm using. Place you answer and your calculations in
the box below and label all relevant values on your graph.
2. Suppose the firm outsourced production to India where labor costs are only $5
per unit. Depict the short and long run effects of outsourcing on your graph.
3. What effect will outsourcing have on the capital/labor ratio? Will the number of
jobs in the world, India and the U.S. combined increase of decrease? Depict on
your graph and explain what is happening in the box below.
4. Compute the ATC after outsourcing or if it cannot be computed explain why. Put
your computations or explanation in the box below.
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Second Exam, Econ. 310, Spring 2004.
Capital
A
100,000
4,000
Labor
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Question 2 (60 points). Consider the firm which outsources from question (1). Draw their
unit cost curves on the graphs before and after outsourcing on the next page assuming
that the market clearing price is P1 before any outsourcing occurs.
1. Draw the unit cost curves for a second firm which refuses to outsource on the
appropriate graph.
2. If the prevailing market price of the good is P1 depict the quantity produced by
each firm and it’s profit or loss.
3. Use the market supply and demand curves below show the short and long run
effects of outsourcing. What will happen to the number of firms, market output,
firm output, short and long run profits, and the number of firms that outsource.
4. Carryover the effects from your market supply and demand curves onto the unit
cost curves of the firms and show the effects of outsourcing on both firms profits
and output decision.
5. Discuss the winners and losers from outsourcing in the box below.
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Firm which outsources
Firm which doesn’t
outsource
P1
Output
Output
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Price
S Before Outsourcing
P1
Demand
Q
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Copyright 2004 MediaNews Group, Inc. and ANG Newspapers
The Oakland Tribune (Oakland, CA)
March 28, 2004 Sunday
HEADLINE: Global repositioning: As companies take jobs off shore, workers wonder
who's safe?
BYLINE: Jennifer Inez Ward - STAFF WRITER
BODY:
Natasha Humphries had a degree from Stanford University and a job as a senior
software engineer with handheld computer maker Palm. Like many tech workers, she
thought she was well protected from the exodus of jobs overseas.But after working both
in the Bay Area and in India to help develop the company's offshore service program,
she herself was laid off in August during a round of work force reductions. Humphries
says she lost her job because her work was transferred overseas.
"Everyone thinks they're immune," she said. "That they have a supreme set of skills that
will shield them from displacement. I thought my role in the company would continue to
evolve."
Today, the continuing transfer of technology and back office jobs to other countries has
left highly trained workers like Humphries, 30, pondering whether their next career move
will be safe from offshore outsourcing.
"My question is, what do we train for?" said Humphries, of Santa Clara. "What job is
offshore proof?"That question looms large as the economic recovery continues without a
significant boost in jobs.
Offshore outsourcing, once the talk of policy wonks, has turned into a hot political issue
that has stirred debate among unions, politicians and Fortune 500 executives.
"There's no question that the whole phenomenon of outsourcing has gathered
momentum," said Ashok Deo Bardhan, senior research associate at the Fisher Center
for Real Estate and Urban Economics at the University of California, Berkeley. It's not
clear exactly how many jobs have been lost to outsourcing. The AFL-CIO says the
United States has lost nearly 3 million private-sector jobs since 2001, many going to
overseas workers.
A 2002 study by Forrester Research offers a glimpse into the future if outsourcing
continues. The study predicts that over the next 15 years 2.2 million American service
industry jobs and $136 billion in wages will move offshore to countries like India, Russia,
China and the Philippines.
India's information technology service sector, the primary destination of business
services outsourcing from Western countries, now directly employs more than
200,0000 people, according to a recent UC-Berkeley study. It accounts for about $2.3
billion in exports, of which more than 70 percent are to the United States.
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The Bay Area, rich with white collar technology jobs, is especially vulnerable to
outsourcing.
Bay Area companies say outsourcing can be beneficial to the local economy, but so far
no one is offering a solution to replace jobs lost overseas.
Experts say the current wave of offshore outsourcing involves so-called "back office
services" _ call centers, accounting and even processing of tax returns.
"The savings are significant enough that there continues to be an incentive to move
some services offshore," said Bardhan, who co-authored the Berkeley report on
outsourcing.
Jobs most vulnerable to the new wave of outsourcing, researchers say, include medical
transcription services, stock market research for financial firms and other back-office
jobs.
The primary reason for outsourcing continues to be cutting labor costs by taking
advantage of the wage differences overseas.For example, the Berkeley study said, the
hourly wage for an accountant in the United States averages $23.35, while in India the
wage drops to between $6 and $15.
Not everyone believes outsourcing is bad.
A recent study by the American Electronics Association said offshore outsourcing is
responsible for only a small portion of recent job losses. The study said offshore
outsourcing will be beneficial to the U.S. economy in the long term.
Bardhan said offshore outsourcing did not create the recent rise in unemployment.
"Most of the jobs loss in the Bay Area or in the United States as a whole have come
about due to the [economic] downturn and not outsourcing," he said. "We've seen
outsourcing in manufacturing occur in parallel with strong growth in services. A
significant share of the services growth would not have occurred without the
manufacturing outsourcing, which then led to lower-cost computer products and a
rising demand for computer services."
And local business leaders say outsourcing jobs is an important component to keeping
their companies competitive in a fast moving global market.
Outsourcing proponents said that while cheaper labor is a factor for moving services
overseas, many companies believe the quality of overseas workers and easy access to
international markets make outsourcing key to being successful.At Mattson
Technologies in Fremont, outsourcing is more than just about taking advantage of the
lower wage costs overseas, said Neal Holmlund, vice president of operations for the
semiconductor equipment company. As part of a strategy to shield against the boombust cycle that's part of the semiconductor industry, Mattson has increased its
outsourcing operations to include back office services like payroll production.
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Holmlund said the company saves between 20 and 30 percent on its U.S. costs by
utilizing offshore outsourcing for its manufacturing production.
"For us and other [companies], yeah there are cost benefits to outsourcing," he said.
"But another significant aspect is meeting the challenges of a cyclical industry.
Outsourcing allows us to be flexible and respond to our customers' demands in a timely
fashion."
In particular, Holmlund said outsourcing allows the company to tap into additional
resources provided by offshore business partners.
"Because we can draw leverage for our partners' resources, we can respond faster to
rapidly changing business conditions," he said.
John Dillon, chief executive officer of Navis, said his privately held software company
does business around the world and having employees overseas is basic to its
operations. Of the company's 250 employees, 40 work in India.
Dillon said those overseas workers cost four times less than employees in the Bay Area.
"In Oakland we focus on doing creative, high-level design work," Dillon said. "The more
mundane functions are done overseas in India."
Dillon said that overseas work includes fixing bugs and defects in software products.
"Those tasks are not glamorous or exciting jobs," Dillon said. "They're tedious. And it
frees up my engineers here and allows them to work on more high-end problems."
Dillon points out that 75 percent of the company's revenues come from international
markets. That revenue, he said, comes back to Oakland, helping the local economy.
"I have about 32 percent of my employees located outside the United States," Dillon
said. "But two-thirds of my revenue comes from outside the United States. So, if you
think about it, we're a net importer, rather and an exporter of jobs."Dillon said
outsourcing is the reality of the technology world.
"Like it or not, we're in a global market," he said. "We really don't have much of a choice,
we have to stay competitive and take advantage of the different labor rates."
As businesses and workers grapple with how global economies are changing the U.S.
job market, the issue has moved into the political arena in this presidential election year.
In a recent Gallup Poll, 58 percent of Americans surveyed said offshoring of jobs will be
"very important" when they are deciding their votes for president. The Gallup poll also
found that 61 percent of said they are concerned that a friend or relative might lose a job
because the employer is moving that job to a foreign country.
And earlier this month a bill was introduced in Congress aimed at deterring U.S.
companies from outsourcing jobs overseas. The Defending American Jobs Act of 2004
was sponsored by 50 legislators. In addition, about 20 states have bills pending that
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would limit outsourcing.
The debate on outsourcing reached a new level when executives from Dell, Intel, IMB
and others urged the Bush administration not to regulate the practice.
"There is no job that is America's God-given right anymore," said Hewlett-Packard Chief
Executive Carly Fiorina in testimony before Congress. "We have to compete for jobs."
Proponents of outsourcing argue that any protectionist measures will more than likely
backfire.
Bardhan said enacting "protectionist responses" would be tantamount to "shooting
oneself in the foot."
"Attempts to halt outsourcing and promote protectionism could be quite costly," he said.
"Protectionism undermines efficiency and results in misallocation of resources."
Still, while companies can see immediate benefits to offshoring, workers say there are
few places to turn once a job has been moved overseas.
Experts say there's no clear road map to helping displaced workers and ensuring that
high-skill jobs remain in the United States.
"It's not clear what new skills would allow easy transition from the outsourced occupation
to remaining positions," said Bardhan. "A successful response to business and worker
displacement from outsourcing would probably involve mechanisms that ensure that
some of the gains from outsourcing are distributed more equitably and that investment
is made in research and development, new business development and education."
Stephanie Moore, an analyst with Forrester, said companies and workers must focus on
keeping high-skill jobs in the United States.
"America has to do a better job of educating young people and focusing on new
technology that will keep high skilled jobs here," she said.
As one of those high-skilled workers, Humphries, remains unemployed but is actively
searching for work. Humphries said her experience has made her become more
politically active and she is currently working with TechsUnite.org to speak out against
outsourcing.
One of the strongest voices against offshore outsourcing is organized labor.
Unions like the Communication Workers of America have emerged as strong opponents
of outsourcing and sites like TechsUnite.org have tapped into the frustration and anger
many technology workers feel.
"Exporting technology jobs is a serious economic threat to middle America," said Marcus
Courtney, president of WashTech, an organization of technology workers affiliated with
the Communication Workers of America. "When it comes to wages, benefits and job
security, exporting jobs is not a recipe for more jobs in the future, but a recipe for
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corporate greed."
Courtney, with help from the CWA, launched TechsUnite.org, to serve as a resource for
technology workers. One of its main goals is to fight the movement of technology jobs off
shore. Courtney said that 2,000 Californians subscribe to TechsUnite.org.
As offshoring continues, workers will find themselves in a bind, Courtney predicted.
"What jobs can we tell people to train for that isn't going to be exported overseas two or
three years later?" he said.There is, however, a counter-side to offshore outsourcing.
Globalization has allowed some startups to take a reverse path by launching overseas
and then moving the majority of their operations to the United States as their U.S.
market grows.
Pronto Networks, a Pleasanton software firm that counts among its clients Sun
Microsystems, said without a global work force the company would not have survived.
The company first started in India, said Ammar Afif, chief financial officer of Pronto.
Afif said it was critical to start developing its software products for Wi-Fi providers in
Bangalore, India. The company's founders are originally from India, but lived in the
Unites States for several year before traveling back and trying to develop a software
product. Today, Pronto has 45 employees in Pleasanton and 35 in India.
"There are positive aspects to offshoring," Afif said. "Had we not started in India, it would
have been difficult for us to succeed. The type of capital needed to start a company here
would have been hard to attain."
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India: back office to the world.(a discussion of the
development of the Indian economy, which is focusing on
office operations)
Contemporary Review, April, 2003, by Alex Ninian
COMPETITION in industry and commerce all over the world is increasing despite, and
perhaps even because of, the proliferation of mergers and acquisitions and the creation of
global giants. The relentless and mounting pressure of competition in the marketplace
continues to drive a never-ending need for companies to reduce costs and keep them to a
minimum.
Over the last 25 years this has led to businesses in developed, mainly Western, countries
transferring manufacturing operations to lower-cost centres, usually in Asia and the Far
East.
Now the same pressures are forcing managements to look at transferring office operations
in the same way, and they are finding that such a task is being facilitated by the
continuing developments in computers, information technology and communications.
The first international outsourcing developments involved Ireland and Australia and to
some extent Holland because of their infrastructure and their pool of educated labour as
well as their use of the English language but this has become largely outdated because of
the very limited cost advantage they offer. Now attention is focussing on India, Sri
Lanka, Malaysia, the Philippines and even China. These all offer labour and other cost
savings, but the other criteria of infrastructure, education and, particularly, English mean
that India is far and away the favourite location for this burgeoning and lucrative
business. The size of its foreign outsourcing operations is larger than all its competitors
put together. With its millions of educated and English-speaking people, India is
emerging as the back office of America, Britain and the Western world.
If you think cotton, tea and rice when you think of India, think again. Now think call
centres, help desks and credit card servicing. This is the 'sunshine sector' of the Indian
economy and is the fastest growing industry in the country.
It began with back-office work for Western-world insurance companies, stockbrokers and
banks where the direct customer contact and the front office was in the US or UK but the
calculations and data handling were done at the end of satellite lines in Delhi or Mumbai.
But now much of the front office operation is in India as well. American or British
customers who ring a local bank number in Denver or Manchester could well find that
they are answered and satisfactorily dealt with by a trained operator in Bangalore, in
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many cases without the customer knowing that they were not being dealt with locally.
Some American companies even train their Indian operators to speak with an American
accent and to comment on the weather in the caller's area.
American companies even train their Indian operators to speak with an American accent
and to comment on the weather in the caller's area.
As already mentioned, the main bases of success are language, education and cost and in
this regard India produces some two million graduates per year who speak English, many
of whom are qualified in accountancy, computer studies, business and commerce. Basic
salaries for bottom-of-the-scale operators might be in the region of $2,000 to $3,000 per
annum, but the economics of the issue is based on 'fully loaded costs' which means not
just the salary of the operator but the cost of his or her office, holidays, pensions,
insurance and social costs, sick leave, computer time and secretarial and other support.
Many analysts of the scene report that fully loaded costs in India amount to about one
third compared with like-for-like workers in the West.
Types of Operation
A general description of what these centres do would include loan enquiries, credit card
work, accounts reconciliation, the processing of insurance claims, bank transactions,
invoicing, collections, and even cheque writing.
More than a quarter of the Fortune top 500 companies in the world are doing this kind of
work in India, including British Airways, American Express, Citibank, HSBC, GE and
AT&T.
The field is also attracting the attention of analysts and consultants who can sell advisory
services to the growing number of organisations interested in the trend. Reports have
been prepared by McKinsey, KPMG, and Deutsche Bank, among others, and these have
been used as sources for some of the information used here.
The main category is Customer Care which includes the familiar call centre activity and
help desks, but also covers sales data and back-up for field sales people who, in turn, deal
with customers.
Human Resources and Payment Services are developing very fast -- a field which
includes employee records and data, payroll handling, and cheque processing -- and could
even overtake Customer Care in the foreseeable future. Finance and Administration is
another area where the cost factor is most important and operations in data analysis,
insurance claims, inventory management, as well as a range of accountancy operations
are being transferred from the West to India on a daily basis.
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The next stage of advance is in higher-level work where low cost will still be a factor but
the need will be for intellectual, value-added services where the scope is huge and
already a start is being made in providing remote technical research and development,
computer systems development and computer systems maintenance.
Economic Effects in India
Economists and practitioners in this field often refer to it as 'information technology
enabled services' or ITES and they see India as far and away the world leader in ITES,
being at least five times the size of its nearest rival, the Philippines.
It currently employs over 100,000 people and accounts for nearly $2 billion in revenues
which are virtually all hard currency foreign earnings. Its annual growth rate over the last
two years has been over 50 per cent per annum which puts it as the fastest growing
industry in the country and the nation's fastest growing foreign currency earner.
It is still in its start-up phase, going from almost nothing to having 400 centres in the last
five years and adding 50 more per year and, by all accounts, it still has a very long way to
go. A report prepared in 2002 by the National Association of Software and Service
Companies (NASSCOM) and McKinsey has forecast that in five years the ITES sector in
India could amount to $24 billion, or 3 per cent of the country's GDP, and employ up to
1.5 million workers. If the forecasts are anything like correct it means that ITES will
account for 30 per cent of foreign exchange inflows.
Apart from the human and personal effects of all this innovation there are further
economic knock-on effects. Most of the employees in the industry are in their twenties
and thirties and their new earnings are having an impact on the providers of products and
services to this specific age group. Furthermore, they mostly work for and with Western
organisations and spend much of their lives in contact, albeit remotely, with Westerners
and this results in tastes and purchasing habits becoming increasingly American or
European. This, in turn, drives demand for jeans, trainers, music, videos, and fast food
and drink.
Property is another sector experiencing the ripple effect from ITES, mainly through the
demand for modern offices and open plan work centres. Technology parks are springing
up in and around the major cities creating new demand for land for the creation of
suitable modern premises and old, single-storied slums like Gurgaon and Malad in
Mumbai are being transformed into vast, shiny, air-conditioned office complexes.
Infrastructure
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While India has so many features going for it, it does have increasing competition,
mainly from the Philippines and China, and the government is having to take an overview
of its strategic position. Its endemic bureaucracy requires that new developments have to
obtain a mass of consents and approvals with the inevitable risk of corruption, and a
serious reduction in red tape is required. Electricity supply is still too erratic and subject
to blackouts, and measures are required to improve power reliability. The telecoms
industry has too little competition and telecom rates are relatively high by international
comparisons. Further reform and liberalisation need to be accelerated. Employers in the
industry are pressing for new college and university vocational courses and
qualifications, specific to ITES, and for the setting up of vocational institutes for the
outsourcing sector.
India has a law called the Essential Services Maintenance Act which designates
operations such as hospitals as essential services and which requires electric power
suppliers to give priority to them and so avoid power failures and blackouts in these
sectors. The ITES industry is not currently covered under the Act and industry leaders are
pushing at government level for it to be included as a major piece of infrastructure
improvement.
The leaders of locally owned and operated businesses in this field have not been slow to
see what the governments and national authorities have been doing in the Philippines and
China to crank up their attack on the market and they have been vocal in calling for the
Indian government to be more proactive. The Philippines already has a National Council
to promote and co-ordinate its efforts nationally - efforts which include the release of
government land and tax holidays and the offer of resident status for foreign investors.
China has the disadvantage, of course, of relatively few English speakers but it is, at
government level, promoting a drive to produce English speakers and is also making a
national attack on the world ITES market by lowering telecom rates and setting up
technology parks.
Locations
The largest number of individual operations are in Delhi with well over 100, including
American Express and NCR. Mumbai, a major centre for Citibank, is second and still
growing although wages and salaries are rising at a rate which is tending to restrict its
competitiveness as compared with other cities.
Bangalore, with its reputation for IT expertise, is of course a very popular destination for
high tech applications. Chennai is one of the fastest growing centres, being a city with
reasonably reliable power supplies and the image of the advanced and advancing south. It
now has around 30 overseas companies carrying out outsourcing activities.
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Hyderabad, Kolkata, Abmedabad, Pune and Kochi have various claims for winning
market share, from low real estate and labour costs to strong local authority support, and
have another 50 call centre and back-office operations among them.
The Human Factor
Among all the technological, economic and political factors, this new industry brings
with it a personal impact on the individuals, families, groups and communities involved.
As with most new developments, the effects are a mixture of the good, the not so good
and the downright bad.
First and foremost there are jobs and salaries to be earned which were not there before. In
India's case, this is a situation which is 'all plus' with no minuses because every job is a
net gain in employment and the disadvantages of any technology or location transfer,
such as redundancies, are felt entirely in the Western countries which are transferring the
operations. It is tending to reduce the possibility of graduate unemployment in India.
And, as in most boom industries, the trend is for remuneration and benefits to improve.
Some of the benefits are relatively uncommon such as unlimited coffee and soft drinks,
free travel, and staff outings and parties which appeal to the new age workforce.
Working hours can be something of a problem for the reason that much of the work is
night work. This applies especially to 'live' operations where direct contact is required
between India and employees or customers in Europe or America, where the working day
is anything from 8 to 14 hours behind, meaning that 9 a.m. to 5 p.m. in the West is
anything from 5 p.m. to 7 a.m. in India. This can produce negative effects in the way of
sleep disorders, stress and related health problems. The huge majority of employees are
female in young age groups and the working hours can also have difficult consequences
on the conventions of Indian family life, social life, courtship and marriage.
Whole new patterns of social contact are emerging with daytime or early evening
arrangements for dates or family gatherings and the development of courtship and
marriage between employees in the same workplace.
Furthermore, people are having to come to terms with working alongside large numbers
of others, often in reasonably close contact, and in groups which would otherwise not
come together. Some of the higher-level, value-added centres employ several hundred
PhDs on one site.
On the more positive side many workers are able to use the unusual hours to combine
work with other activities such as training for a sport or studying for a further
qualification or degree.
The Players
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One of the biggest operators internationally is HSBC which has 1,500 operators in
Guangzhou and Shanghai, China, as well as 2,000 in Hyderabad and Bangalore, India,
plus 700 in Kuala Lumpur, Malaysia. At least 2,000 of this total of 4,200 are servicing
the UK, including clerical processing, call handling and personal banking representatives.
It is understood that twelve new personal phone bankers are being trained in Hyderabad
every two weeks.
Norwich Union is another company with a multinational spread to its back office work,
having a centre on Colombo, Sri Lanka, as well as two in India. In February another
British insurance company, Aviva plc, started a call centre in India which, it hopes, will
employ 1,000 people by the end of the year. Last month British Telecom, the UK's
largest fixed-line phone provider, announced plans to set up call centres in New Delhi
and Bangalore. British trade unions reacted with fury in spite of BT's claim that no
British workers would lose their jobs.
Probably the biggest of all is GE of the US, with over 11,000 employees in three centres
in India, followed by Citibank with 3,000, who work on loan processing, cheque handling
and trade finance, and British Airways with 2,500 who do passenger accounting.
But not all the centres in India are directly owned or run by overseas corporations, known
in the jargon as captive units, and locally owned operations are springing up at an
increasing rate, although the customers are overseas. The local operations, known as
third-party providers, are a mixture of start-ups from scratch by entrepreneurs or by
companies in related fields and they cover the whole range from simple call centres to
high-value work. Daksh eServices, for example, are a local start-up who have succeeded
in winning work from Amazon while Indian software giant Wipro Ltd has diversified
into the ITES sector by acquisition. The biggest indigenous operation is Convergys which
employs over 2,000 people and handles a dozen overseas clients.
Europe and the US
There are two sides to every coin and the actions in India and Asia are tending to have
some reactions in Europe and the USA. There is no doubt that cost savings are being
made and getting through to the bottom line of company profit and loss accounts but,
inevitably, it is not all plain sailing. Many companies are being criticised by local
politicians, trade unions and liberal groups, on the grounds of destroying jobs and
disrupting communities at home.
In the US, moves are afoot which could lead to local state laws which will require
companies who are recipients of public contracts to employ only US citizens or people
authorised to work in America. The state of New Jersey is taking the lead in this but it is
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not at all clear how constitutional this would be, how far other states would follow, or
how effective any state legislation might be. Can anyone imagine the US government
refusing to buy Ford or GM vehicles because they produce cars overseas?
In the UK similar criticisms are being made, including the suggestion that third world
workers are being exploited by the UK finance industry. This seems equally hard to
sustain since the Indian work force and economy are glad to get the work. Do workers in
Greenock feel exploited because IBM make computers there? Furthermore, the United
Nations review of parity purchasing power relative to the cost of living indicates that, for
local people's purchasing patterns, [pounds sterling]1 buys five times more than it does in
the UK, so that an annual salary of, say, [pounds sterling]2,000 is more like [pounds
sterling]10,000 in local purchasing terms.
Whatever the arguments, offshore out-sourcing by UK companies is increasing at an
accelerating pace led by the banking, insurance and finance sector. In addition to the
companies mentioned earlier, Lloyds TSB and Barclaycard have transferred 600 jobs to
India for call handling and software development work, according to UNIFI, the finance
industry union. It is also reported that insurance companies Ma, Churchill and Royal &
Sun Alliance have over 500 people employed in Bangalore, Delhi and Pune, carrying out
the processing of claims and developing software.
Perhaps most controversial of all is the announcement of the transfer of up to 1,000 jobs
from Reading to Mumbai by the Prudential which has sent shock waves through the
district and the whole financial field. Until now, much of the work transferred by British
companies has been back-office work, but this latest move involves primarily the call
centre operation and will confirm that offshore outsourcing is now encompassing the
front office as well. Job transfers in the industry had, until now, been in amounts of 50 to
200, but the Prudential's move will accelerate the growth to a total of over 5,000 by the
year 2004 from the finance sector alone.
When management consultancy firm Accenture published a forecast that up to 300,000
British finance jobs could go to India by the end of this decade, it was regarded by many
to be unrealistic but, seeing the size and type of recent developments, it may not be so
fanciful.
COPYRIGHT 2003 Contemporary Review Company Ltd. in association with The Gale
Group and LookSmart.
COPYRIGHT 2003 Gale
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