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bsharma writes "The next round of globalization is sending upscale jobs offshore. They include basic research, chip design, engineering--even financial analysis. Can America lose these jobs and still prosper? Who wins? Who loses?" News.com has a related story about outsourcing.
As you might expect, this worries me a lot. I'm fairly secure (I think), because they need at least one person here that knows English and Java and can understand the customers and do the face-to-face, but in the long run more and more places are going to look at the savings and ship the work overseas.
I've got two kids, 9 and 12, and I'm at a loss for what direction to steer them in career-wise. I used to think Engineering was the answer, since I've really enjoyed my, what, 20-odd years of slinging code. But by the time my kids are college-age, god knows what will be left in the US besides burger flippers, doctors, and lawyers.
-- ac at work
Is this somewhat painful? Yes. Does it help in the long term? Most definitely.
Do you really think that the mid east would be in the situation it is today if there was a wide diverse economy over there?
Blockquoth the poster:
America makes its money by being at the ultimate junction point of capital, intellectual property, communications, and business management. We're the deal-makers and the facilitators. We don't build anything ourselves because we're content to skim a little bit off the top of everything that passes through our hands.
However, sooner or later, all those other countries to which we've outsourced our industrial base will realise that they really don't need us. When they get their acts together, they'll just start dealing directly with each other. And when that happens, watch this Pax Americana come to a screeching halt.
I predict it will happen within the next 50 years, if all things continue as they are now...
2) People who are out of work cannot buy things made by corps who are farming out their labor to other countries. Companies see a mysterious downturn in profit and are unable to attribute it to the fact that people don't make any money and accordingly can't pay for things they are making money by farming out labor to fourth world countries, whose major export is dirt. Corps who are farming out their labor fold like sheets at a Motel 6 or move to country where their production facilities are. Now more people are out of work locally.
3) No profit! No company!
4) Repeat ad nauseam
Why do you think we are in the world of hurt we're in today? It's called Lowest Bidder. If you as Foocorp can save a buck manufacturing widgets, you'll save that buck because it means more money in your pocket. The downside is that in saving that buck you're going to put yourself out of business.
Wait about ten years. The results will be one of two things: depression to rival 1929 or bounceback as a result of these companies fscking over the US economy. Forget your interest rates, they mean nothing - the lowest bidder is causing our downturn.
This sig no verb.
Hmmm... yah. Can't be. Those inumerable people against globalisation must all be out of their minds.
Wait, let me get this straight. I'm assuming that your four-man operation replaces a three-or-four man operation in the U.S. Let's say salary costs are $50,000 per U.S. programmer, $15,000 per Indian programmer. A four-man U.S. team is $200,000 a year, while a one US, three Indian team is $95,000, for a savings of 48%.
Great! Your company now has an extra $105K to spend! Either you get a raise (not likely), or another team can be created, employing 8 programmers where four were employed before (and allowing your company to do more work). Of course, the real ratio is a little higher - you need slightly more support staff (management, office workers, etc) to support twice as many workers, on both sides of the ocean, so it's possible your company could jump from 4 workers to 10, for the same amount of money. Seems like a net good to me.
Further, the U.S. is the top market for high technology products, because we have the extra cash to spend on them. Increased employment in other countries raises their GDP, which means they can better afford high-end toys, which means they get cheaper and better for us, etc. etc.
Take a look at the numbers - globalization has been in full swing for a few decades now, and the U.S. has the lowest unemployment rate in years - lower than they thought possible a decade ago! Almost everyone wins when the people that can make a product the cheapest are allowed to do it. The only ones who lose, in the short run, are those who are displaced by the production move. The remedy for that is short-term government support, and the best way to get out is to acquire new skills.
Tell your children to become engineers. The problem-solving skills you learn will help them easily jump from career to career, as needed. Encourage them to take some liberal arts classes, too, to make them think more flexibly and excercise that right brain a little. May I suggest an economics class?
On the other hand, as long as I can make a living, I'm not going to begrudge someone in India, Russia, or other place their ability to make a living. What I object to is when the savings from outsourcing do more than keep a corporation afloat, but actually continue paying obscene salaries for CEOs. Perhaps we need to outsource board-level jobs to India and Singapore and Bulgaria. It's only fair. Don't you think?
You forgot something
... and who are willing to work for $7.01 an hour, or less!
American companies don't need high-cost burger-flippers with a PC, they need effective, efficient IT professionals that can justify their salary with corresponding efficiency
Simon
Coming soon - pyrogyra
--You have it exactly, and that's why it will destroy the US middle class, and do it within this decade we are in. example-china. China does NOT generally speaking buy mass quantities of american goods EXCEPT for tool making machines and similar. They are buying tools to make tools to make-EVERYTHING. They buy the stuff needed to work at, to actually produce, to aquire wealth. Like we used to work, that was successful and bbuilt a diverse robusrt economy. We were sold "globalization" as the "two billion armpit" theory, that if helped china along they would continue to "buy all our stuff" in ever increasing amounts. This hasn't happened, all that's happened is a HUGE balance of trade and short term profits for *some* people and massive loss of jobs. Our balance of trade deficit is simply staggering, we have gone from the world's largest creditor nation the world's largest debtor nation in 20 years, with the bulk of that within the last ten years, and it's growing increasily worse. THAT's all the proof required.
After (china primarily) have their full vertically integrated industries setup,(close now) they not only won't need to buy our stuff, there's no way any of our stuff would be cheap enough for them to bother with, because they will have a large enough internal market. all they will need to trade with then is for oil and other raw materials. And this goes from agricultural products all the way to high tech and everything in between, they won't need us, not a nickles worth. They will continue to export as much as possible, but only to places that have actual hard currency of value or have the materials they need. Our dollar is dropping in relative value. although till used widely, it is and will continue to be devalued, especially if gold backed currencies become required for international balance of trade payments. The current balance of trade numbers prove this with no shadow of a doubt. Other numbers I have seen have china as potentially surpassing the US around 2015 or so, although I personally believed that mass global warfare will occur before that time, basically over resources and who controls the planet. In fact I would maintain world war 3 is already in progress.
The US is living on credit and inertia and a severe case of the denials right now, we are en-screwed. As will be pointed out around the thread, people take a cavalier attitude and say theoretically it's a 'good thing" - until they lose their jobs and start the cycle that millions are on now, lose job, hunt for job, get job paying less, lather rinse repeat until you hit a brick wall with NO job.
The job loss stats are SO bad, they stopped reporting them, claiming they ran out of funding, which is a political dodge. this was a major story that didn't get much coverage, but is important for everyone to take a look at.
url to my last statement
http://www.bls.gov/bls/mlsdiscontinued.htm
text, short and to the point and anyone should be able to read between the lines here
What is the status of the Mass Layoff Statistics (MLS) program?
The Mass Layoff Statistics (MLS) program has been discontinued. Since 1994, the Department of Labor's Employment and Training Administration funded the MLS program. That funding ended on December 31, 2002. The Bureau of Labor Statistics (BLS) has been unable to acquire funding from any alternative sources and had to discontinue the MLS program as of that date. Limited historical data and documentation will continue to be available on the BLS Internet, at http://www.bls.gov/mls/.
Last Modified Date: January 2, 2003
Jobs in the US are NOT being replaced by the numbers, nor are wages going up, speaking in general terms, we are dropping, and fast. It's being manipulated to appear like theyare going up slightly, and even that is a scam, theypulled food and fuel from the consumer price index for example. They are lying, avoiding real numbers, basically pulling an enron accounting modal on an across the board obfuscation to this system to not panic the herd. They are doing the same things with the major market indices, in particular they remove tanked corps as fast as possible to keep those numbers artificially inflated. If you were to do (now timeframe) an historical records match, and keep the tanked companies over the past few year period and reconfigure the indices those charts would look a lot worse than they are now.
IMO
This is an extremely involved subject but the gestalt is we got shafted by literal traitors. Internationalists who are loyal to no one beyond their own power and greed and to whichever global cartel constitutes their gang. This was done on purpose to further a heinous (ultimate) agenda of a global two class fascist society, which I term technofeudalism. It is akin to wolfpacks fighting themselves, but all united in staying wolves over the herds.
I had these same arguments on forums years ago, I was saying the same thing then as I am now. I have personally since heard from people who vigorously disagreed with me then, conveniently when they were sitting fatcity on their dotbomb poker chip improbable beyond belief stock portfolios and a great paycheck. Now, a lot of them have changed their viewpoints 180 degrees, because they got bit, and bit hard. their stock profits turned out to be mostly vaporware and so were their jobs, and not even new jobs then, old jobs they had. Industry after industry has been destroyed or reduced to ridiculous levels. And not buggywheips, critical strategic infrastructure.
That is almost the only way for some people to get from casual ho hum academic styled discussion to back down on the ground in the real world, to just have it shoved in their face up close and personal. THEN they understand better the full ramifications of what's going on..
Frankly, I have been expecting this for about a year or two: if you can/could telecommute, what prevented your employer to outsource your job?
The developed countries have been outsourcing blue-collar jobs to developing (really low-wage) countries, thanks to the development of international transportation for moving the goods all over the world. Those jobs go now wherever the workforce is the cheapest
Every single part of computer hardware you have in front of you, has been made in Anywhere But US/Europe/Japan(TM). I hope you enjoyed playing/working with your computer, because karma is a b*tch.
Today, the internet allows the transportation of knowledge, voice and data all around the world. Of course, your job will go elsewhere.
Heck, if you think about it, you can see that no one is really safe from this:
- lawyers (you just need some meat in the court house, everything else, including C&D
:), is outsourcable paperwork)
- doctors (the remote chirurgy we dreamed about with Internet2)
- teachers (online schooling anyone?)
- people in the movie/entertainment industry: Bollywood could cripple Hollywood (Selling low-priced non-crippled CD and non-DRM DVD should be straigthforward for the Indian majors)
Here is some food for thought:My predictions are:
So, what does it mean for me?
One of these days, Chairman Mao is going to call the President of the United States and tell him to surrender.
Chairmain Mao will explain that Chinese Corporations are the subcontactors to the subcontractors to the subcontractors of the Department of Defense Subcontractors and furthermore; China now makes ALL the key components for ALL of America's military weapons and machines.
Then he will let out an evil sounding Chineese Laugh! (The kind you hear in James Bond movies.)
How can the US maintain it's power if all it's strategic manufacturing capability is located offshore? Recently, we nearly lost the US Steel Industry and it's not over yet.
Sure we have rules and laws which on paper prevent this sort of problem, however as the FDA recently found out in the "Tainted Strawberry Harvest", these rules are not always followed. In this specific case the FDA had rules that all food used in school lunch programs must be grown in the United States. The subcontractors decided to ignore the rule and subcontract from Mexico and imported 1.7 million pounds of Hepatitis laced frozen Strawberries. The good news is that the fraudulent company was the lowest bidder and we saved tax dollars.
I won't even comment on the strategic technology which has been leaked to other countries by defense subcontractors.
Greed will destroy us!