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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.
"Who wins? Who loses?"
The American People do. The American Corporations win. Just as they always do.
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As always, we screw ourselves, as long as we continue to support companies that outsource to other countries for jobs that should go to us. It's amazing how prices of products aren't cheaper despite outsourcing to foreign countries. If people continue to buy products front countries that outsource, then badly needed jobs are going to continue to slip away. If enough people could be rallied, an organized boycott against those companies should be implemented, after all, if they are going to cost the American people money, then they in turn should start costing the companies money. It could be like a union, but of consumers instead of employees.
The bottomline: If we don't send jobs abroad and reduce our costs, we'll end up sending customers to other countries!
Wouldn't that be worse? Let us say there is a law against American companies having their work done by foreign workers. Let us also assume that we stop all immigration, since most people who want the former want the latter too. That would make American products much more costlier.
So, foreign companies will develop the same products with lower costs and end up hijacking the marketshare. Is that really better for American prosperity?
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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...
It should be no big surprise. As we keep pushing things out of the US we have less and less real value.
We, as a nation, actually build very little on our own shores.
Besides the Natural Resources for Farming and Mining there is nothing here that needs to stay here. As we look for ever cheaper methods of production and higher profit margins, we will move the work to other nations.
We don't actually make anything of any value anymore. We are a nation of lawyers and marketing types. All we need now is an army of telephone sanitizers and we'll be all set.
Will there be U.S. Steel plants? Refineries? Agriculture? No. Will any durable good be manufactured in the U.S. No.
The only thing that other countries can't compete with the U.S.: the creation(in the loosest sense), distribution, and consumption of U.S. made MassMedia.
The war on terrorism is already a poor excuse for a reality-TV show, the war on drugs is an effort to direct your 'escapes' to more profitable, advertising-rich video and movies; the war on piracy is nothing more than a giant squeezing blood from a stone.
When all that is real has been lost to a soft, dehumanized, videodrone people - that is when the countries who have made the shovels, dug the ditches, grown the food, built the roads and cities in the U.S. - that is when those countries will walk in and quietly pick up the fallen reins of America, and sense may return.
I think I just choked on a pretzel.
I posted a dupe! I'm ready to be an editor!
The article is pretty much spot on. By decree of some department head somehwere, 1/3 of the people in each gruop have to be GDC employees (GDC is the termed used for the 2 companies we outsource work to - InfoSys and Tata) - which means if you have 30 people in your group, 10 must be contractors, and 2/3 of those must be off shore.
What's really depressing is that these changes aren't being done to get BofA back in the black or because it's going down the drain. It's so that they can show 7% (or 4% or something, I can't remember) more profit than they did last year.
This is absolutely *killing* morale. People worry about jobs. A lot. Our group has actually lucked out a bit - due to the closing of remote offices and a couple people leaving for their own reasons, we've been spared - Our manager is fantastic, he's doing everything possible to keep from laying any of us off. But other groups aren't so lucky. Quite a few people were laid off today, so the rumor mill says.
It's tough. It's one thing to be laid off for poor performance - it's a whole other ballpark when you're simply getting replaced with somebody a little cheaper.
If you don't like seeing companies leave to US, why do you not spend more time considering the role of higher taxes in forcing companies to make the exodus? On a smaller scale, we are seeing people leave California due to high taxes and the cost of living.
The US govt. needs to get spending under control so it can stabilize it's tax base. Also, implimenting a "Flat Tax" would eliminate the 100,000 pages of our broken tax laws and take the politics out of paying taxes. Much of the power in Washington is directly tied to the trading of tax favors for campaign contributions.
This is probably good for humanity in general. As lesser fortunate countries economically and technically advance they will tend toward democratic processes, equalizing rights to women and children, lesser corruption, etc. Tribalism seems to hold sway with some but I look for the day when the whole world is roughly equal in terms of freedom, economic opportunities, educational access, and medical care for all not just my country, ethnic group, class, etc.
If there is someone out there who can do exactly what I do only cheaper, who am I to complain if a customer or employer chooses them?
My job is to insure that I can provide more value than the competition. This means that I have to do something that they cannot or I have to do something that they can do only better, meaning that I have to do it faster, cheaper, or with better quality.
That's just how it works folks. Deal with it and get cracking.
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.
Any empire in history has subjugated the poor of other nations in order to sustain it's own wealth. The US is acting similar in this regard. Unfortunately for you and I, we do not get to reap the benefits alongside the corporations, we are merely discarded in the process. The term globalization does not mean that we will all live easier and everyone will have a job, it means that the empire will no longer have a home base, just as corporations have become a faceless entity to complain about, they are becoming a stateless entity that is no longer subject to the free market rules. These new global corporations may cut a large swath of productivity, but they move from third world country to third world country leaving devastation and ruin in their wake.
Today the beneficial country may be India and Singapore, but as wages there begin to climb, those same companies will pack up and move elsewhere to start the whole process anew. There is no ethics in that, and there is no sense of responsibility in global corporations who continue in such endeavors.
Hammer of Truth
What? From what I've read, most of the outsourced jobs, however white collar they may be in the 'States, are passed so that they can lower costs buy exploiting the workers in cheaper markets. Trust me, this was never about economic stimulation in third-world countries. Corporations are certainly more interested in the bottom line, and do you really think for one minute that their motivation is actually triggered by some huminitarian spark in their hearts? Hardly.
Think about all of the jobs in the steel industry and raw goods refining that used to be housed in the US. I was born in a region that housed booming towns that thrived on the steel, zinc, coal and cement in Pennsylvania. I can tell you firsthand that when refining was able to be done for 87 cents in Asia, the companies left town, the towns dwindled, and the equipment sat under 30 feet of water at the bottom of the quarrys. Was this good for us? The people that live there are just simple folk scrounging as best they can in small, dilapidated houses. Yeah, I guess they're only a mile from the nearest McDonald's, maybe they are better off than Hong Kong.
Oh, and guess what? A major factory and headquarters of Lucent (now Agere) used to be housed there, they even built a state-of-the-art Optoelectronics factory a few years ago. What happened when the bottom dropped out of optoelectronics? It was cheaper to manufacture in Asian countries, so tens of thousands lost their jobs. The new plant was sold for $40 Million in a fire sale, the grounds and any one of the many buildings were easily worth that much.
It's happening all over again now. Tell me how that's good for my town, Waterton Man.
--- What
Hmmm... yah. Can't be. Those inumerable people against globalisation must all be out of their minds.
The submission asks who wins and who loses. That's an easy one:
Winners
Overcompensated CEOs
Wealthy stockholders
Non-U.S. workers
Losers
American workers
Paying fair U.S. wages, while complying with U.S. regulations to protect the workers and the environment, costs money. So a company can gain a competitive edge by hiring workers in foreign countries where salaries are lower and where such rules do not exist. If some smoke-belching plant across a border can pay people $10/day and work them for 12 hour shifts, then the company using that workforce can realize lower operating costs and, hence, higher profits.
Folks, this isn't rocket science. All other things being equal, businesses will go with the cheaper source every time. What we need to do, as a country, is to level the playing field. We need tariffs, laws, and fines to discourage firms from outsourcing desirable jobs.
Screw pure capitalism. Unregulated capitalism doesn't work. That's why we have massive unemployment in the tech sector while desirable jobs are going to overseas workers in impoverished countries. And all the while, U.S. CEOs and other executives are receiving compensation packages that rival the net worth of some small countries. It's time we put our feet down and protected the vast majority of working Americans rather than pandering to the greed of multi-millionaire CEOs.
People worry about jobs being shipped overseas. I work for a company where half the development staff is in Bangalore (I've even been to Bangalore) and many of the people I work with used to work for Infosys, which is one of the leading software development firms.
Outsourcing can hurt- people in the US do lose jobs here when jobs go overseas. But for every car, shoe, or software program which goes overseas, some person their gets a job. Their earnings go up. They spend money.
A software developer in India earning $20,000 a year might even have enough money to buy something from the US (OK, maybe they might buy a Daewoo instead of a Chrysler- there are models of Korean cars which are popular in India which are not even sold in the US...)
Do people here who worry about jobs going overseas not want to see the level of prosperity go up in India? In China? In the Phillipines? In Africa?
These considerations don't even begin to take account the benefit that people in America realize when goods and services become cheaper here. Sure you might argue that when living standards go up in Mexico, standards in our country go down towards that of Mexico- but remember that in the 19th century people like Marxists predicted that this would happen, that the world would constantly develop towards the edges. Of course, they predicted that when the edges are exhausted, the revolution begins...
I think that this is a reaction of smart corps on a stupid INS strategy. INS doesn't approve many of H1B application (no need to mention profGC applications) based on the logic: "it's a tough job market for americans and we should protect them".
But it doesn't count the fact that many H1B applcations are for positions which most of americans cannot fit due to limited education and skills. On the other side, smart corps doesn't care about americans - they have a job and they need it done.
So, no wonder they outsource the job offshore, where, by the way, the price for job is even lower. But now a big chunk of taxes is also gone from american budget.
Now I want to aks, who are those people that INS is trying to protect?
Less is more !
Maybe you'll then say that it's not the goverment but the wealthy fueling your conspiracy. Well, considering that of that 1% you're talking about, only 10% of their children will manage to do anything but piss that wealth away, I don't see a successful continuation there either. And what you're talking about implies generations of development.
Money flows downhill. It goes where things are cheap, and moves them where they are expensive. You'll never track it by looking for master manipulators, you'll find it by looking for people blatantly trying to make a buck.
Oh, what's that in your url? Subgenius? Aha, I see. Nevermind, you're a lost cause
That way, american corporations can reduce costs and make more profits so that the US can remain a rich country. In a couple years, the US will be the richest country and 99% of its population will be below the poverty threshold.
Opus: the Swiss army knife of audio codec
If the jobs are going out of the country, and The Country as a concept does nothing about it, then it's time to go where the jobs are.
I'm as patriotic as the next guy, but if all the U.S. companies are content with the economic sabotage currently going on, I'll move to India.
This is all backwards. You want raw materials in >> refined products out, to keep wealth in the country. Not the other way around.
...
"From what I've read, most of the outsourced jobs, however white collar they may be in the 'States, are passed so that they can lower costs buy exploiting the workers in cheaper markets."
How is offering a good job at a high wage (relative to the local economy) exploitation? Perhaps you ought to talk to some of the programmers who work in India and ask them what their other career options were like.
"It's happening all over again now. Tell me how that's good for my town, Waterton Man."
It may not be good for your specific town. And if that's all you can look at then you have a very narrow world view.
-- this post written by someone who lost their job to cheap Indian labor
Money and power are finite resources.
That obviously isn't true. If it was true, we'd ALL be living in prehistory still, trying to eek out a meager existence in small hunter-gatherer bands, living to the ripe old age of 25-30, if we were lucky.
No, economies produce wealth (through the combination of base resources, capital, labor, increased productivity, etc. etc. etc.). Economies CAN and generally ARE win/win for this very reason. Economies at local, regional, national, and international scales grow far more and far more consistently than they shrink ... the very definition of the creation of wealth.
Is it a scary time for a techie like me? Yes. But overall this is a good thing.
Because Japan (and now Korea, etc.) started making cars many US employees were initially displaced. But we now enjoy cars (from all countries including the US) which are far better and lower priced than we would have had without competition. (My 18 year old Tercel just crossed 200,000 miles but when I was a kid they didn't even bother with the sixth digit on the odometer.)
We have also enjoyed all sorts of inexpensive goodies like toys, home electronics and clothing that would have cost far more if all made here.
So the Indian programmer makes "only" $10,000 - that's still 20 times the average. His standard of living is probably pretty good. Outsourcing hurts our income but helps keep our costs down.
But there are bigger gains:
Peace - countries with close business ties almost never go to war.
Population - the wealthier a country gets, in general, the lower its birthrate.
Environment - of course the "first world" has a far from perfect environmental record but it is WAY ahead of the third world where fishing by pouring poison or tossing dynamite in the ocean is an accepted method, where "recycling" involves open fires to burn the plastics off of wire and electronics, and where the air is many times worse than in the worst US city. Something about not having to worry about the next meal allows one to consider the environment more seriously.
~~~~~~~
"You are not remembered for doing what is expected of you." - Atul Chitnis
It's about making the rich richer and the poor poorer.
Mod me troll if you wish, but the highest tax bracket before Reagan took office was almost 80%. That means the government taxed 80% of the income of the very richest people. Now it's down around 30%.
There are more rich and very rich people in the U.S. than in any time before in history, and they hold a much larger share of the wealth pie than the wealthiest few ever held before. NAFTA benefits the rich, and not the poor. The tax codes benefit the rich and not the poor. WIPO, Sales Taxes, "death" tax reductions -- it's all meant to guarantee that once the money is in the hands of the wealthy, it never leaves.
That giant sucking sound isn't the sound of jobs going overseas, it's the sound of money flyng out of your wallet.
What would you think if you went to a podiatrist mailing list and one of the topics of discussion was a debate over some complex memory paging algorithm for the linux kernel?
l
d en_Orde r/Hidden_Order_Chapter_20.html
The opinion surely come down as: either this is one bunch of smart podiatrists or, this is one bunch of cocky podiatrists who have no idea what they are talking about.
International trade is a difficult subject. Often situations that seem bad for one country are actually beneficial, as first pointed by the great economist David Ricardo two hundred years ago. This holds across the entire field of economics, starting from the fact that trade is a win/win scenario, while most people think its a win/lose scenario.
If you are concerned about the impact of jobs moving abroad, I suggest you read up on economics, so you come to understand, for example, why not all jobs when to Mexico after NAFTA got signed, as Ross Perot predicted.
Here are a few useful links:
http://www.systemics.com/docs/ricardo/david.htm
David Friedman. Hidden Order: The Economics of Everyday Life, Harper-Collins, 1996.
http://www.daviddfriedman.com/Academic/Hid
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?
Anyone with even the most basic understanding of economics should dismiss this article as totally unsurprising and move on. The idea I'm already reading in comments that "jobs should stay in America" is idiotic. I want stuff to cost less, and if producing it elsewhere can do that then that's what globalization is all about! It's the same argument when it comes to trying to get rid of ridiculous farm subsidies. I don't want to pay more for corn just so people can continue to be farmers. Familiar Slashdot argument: if the business model of __________ (like being a programmer or a farmer) is untenable, then get out of it! The Constitution doesn't recognize a right to make money doing the activity of your choice.
Maybe someday, when smart use of technology has finally allowed us a balance between needs/wants and resource scarcity, large numbers of people will be able to say, "I feel like being a farmer" or "I feel like managing servers" and do it. But for now, that's just not how it works. Suck it up!
And by the way, this argument goes both ways. People living in the US just happened to have been born (or have been lucky enough to move to) one of the most resource-rich nations on the planet. How dare we even consider enacting policies that would deny these benefits to the rest of humanity? It's that kind of thinking -- or, at least, the perception by other that that's what we're thinking -- that has all these misguided, ignorant, and extremely poor Muslims trying to blow up our civilization
I think another word for that is "capitalism." We are simply achieving it at a much more efficient level, thanks to technology. We can still invent new technology, you know.
Maybe the problem is not that "higher level jobs" are being displaced but that these jobs are no longer as important, thanks to technology. Penmanship used to be a CAREER until technology displaced it. Maybe it is not good enough to JUST be a programmer anymore. I program in PERL all the time (and admin my own LAMP), and I am a freak'n Financial Analyst (majored in Economics).
But I enhance my productivity by leveraging PERL to "Invent" new tools for financial analysis.
Instead of picking one career, maybe you would be safer picking two. That way it might be easier for you to invent ("you" not necessarily referring to the parent).
Sdelat' Ameriku velikoy Snova!
How many people here drive Japanese cars?
A lot of people here are saying the same things auto workers said in the 80's. They're taking our jobs. Its going to destroy the economy.
You know what's going to happen? Cheaper programmers -> lower costs -> more profit -> corporations expand -> more jobs for both Indians and Americans.
In the short term it kinda sucks, but in the long run things will be better for everyone. Of course in the long run we're all dead anyway (sorry Mr. Keynes).
This assumes that corporations aren't corupt colluding bastards, but that really is a separate issue and would be a problem with or without free trade.
The book How Americans Can Buy American by Roger Simmermaker explains this from a consumer/taxpayer perspective. The book's main idea is that manufacturing companies, regardless of where they manufacture, pay most of their taxes in their country of headquarter , so consumers should buy from companies owned domestically. Then it lists several thousand brands and corporations and their country of headquarter. It's a neat book to bring to the store, but it's also scary to see that companies like Universal Pictures, Stanley Tools and Chrysler are foreign owned. I suppose in the book's next edition we'll see more Indian brands in the IT section.
--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..
If you remember your Snow Crash, this is the sort of thing Neal Stephenson was talking about:
Is the use of inexpensive intellectual labor abroad a bad thing? Depends on who you talk to: to a telecom engineer in Dallas who's trying to make payments on a $500,000 house, it is. To someone who can buy cheaper software or services because developer rates went from $150,000/year to $5,000/year, it may not be. And to the population of India, of course, it's a different story entirely.Really, this is the way the game has to be played for the developing world to proceed. After all, the manufacturing and commodity export sectors in the developing world are so competitive across nations that they can't serve as engines for fast growth. The most effective way to move from sweatshop to smartshop is to change the competitive balance and make the developed world compete for their own jobs: the same market forces that give us cheap steel, fossil fuel, and agricultural imports cane be turned back on the markets in which we've previously held both absolute and comparative advantages. Eventually -- and the key here is "eventually" -- this will result in increased prosperity for all, but it's not at all clear that the short-run result will be increased prosperity for us.
This isn't to say that I'm happy about this in terms of my own career (though it is why I'm moving from tech to law), but if the alternative is an ever-larger, increasingly impoverished, and restless population in the developing world -- just the sort of populations attracted to radical terrorist movements -- I'll take the salary hit.
"Freedom is kind of a hobby with me, and I have disposable income that I'll spend to find out how to get people more."
Wealth begets wealth.
Yes, there's quite the imbalance between my salary and a Fortune 500 CEO's, and that's not changing much. What is changing is that people in other countries are ending up with more money to spend individually, and end up with their marketplace infrastructures being upgraded. India has Internet connections. FedEx delivers in India. The same countries getting the jobs are also becoming consumers and export markets. There is temporary pain like this for us, but there will eventually be ROI. It just sucks when you're the individual out of a job.
And what happens to us Americans if and when the US faces disaster? I'm not loyal to the US so much as I am loyal to a country that provides:
If the US crumbles in this endeavor (which I doubt), it will do so while a few other countries outdo the US in the areas listed... some would argue that there are other countries that already far exceed it in the areas that matter to them.
You too can play the globalism game.
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?
After WWII US dollar became the only currency left standing -- every other country that had an economy good enough to support international trade in its own currency was devastated, US remained ok (because it was separated from a war by the oceans, and please shut up about what others "owe" to the worst military among allies in WWII).
What followed was a horrible abuse of this "de-facto international currency" status, the (number of dollars abroad)/(amount of products traded abroad for dollars) was significantly lower than the (number of dollars in US)/(amount of products traded in US). In other words, everything was cheaper abroad and expensive in US, so US simply printed dollars (or, to be more precise, created them as Federal Reserve loans) and injected them in this system. The system worked through osmosis, it became easier to buy products abroad, sell them in US, pocket the profit and call yourself a rich company while producing nothing, and merely exploiting the slowness of trickling of dollars abroad by making it a bit faster.
Of course, due to this difference in prices, and efficiency of non-export parts of foreign countries' economies, US citizens could hear blood-curdling stories about low salaries abroad, when they were counted against US dollars, however it was nothing but a propaganda trick -- the prices difference was not taken into account, and the lack of reliable currency conversion rates for countries and products not involved in trade with US allowed for absolutely ridiculous numbers. Just look at GNP figures and think, how is it possible to have such a disparity, yet people don't starve everywhere abroad. So for US citizen there was no visible difference between indeed starving people in Cambodia and rather prosperous people of India.
However everything comes to an end. "Osmosis economy" can't run forever, and just buying stuff while racking up trade deficit becomes more dangerous, and other currencies (mostly Euro) issued beyond the US control are becoming used in international trade. However US companies can't expand the production within the country -- educational system and media prepared only consumers for them, there aren't enough people that can and are willing to produce something, they would rather accept sliding quality of life for themselves. So US proclaims itself to have "service economy" (aka doing each other's laundry) and "high technology" (aka having a lot of engineers). The problem is, "service economy" is big fat zero unless it supports production of something, and engineers in US meet just as much competition from foreign engineers as US workers did before, therefore all the outsourcing you can see.
So US as a whole became an arrogant, unskilled and incapable of supporting itself nation by abusing currency machinations -- something that often happened to individuals and now happened to the country as a whole. And here is the sucky part -- crook that lost his money does not harm millions of people that ARE capable of productive work yet happened to live in a country where the macroeconomic processes deny them this work.
If US wants to restore its currency system to something usable, sooner or later it must significantly devalue dollar, and possibly tie it to valuable commodities (say, gold) and stop the "osmosis" forever. If US wants to restore its production capability it must rebuild its educational system. And if US wants to get people capable of doing productive work now and not in 20 years, it must reduce barriers to immigration. All of those measures will without any doubt decrease "quality of life" -- at leasr temporarily, and at least for some parts of the population. However the only alternative to them is accelerating slide into poverty, and turning the country's economy into an equivalent of giant failed dotcom, like flooz.com x 1e6.
Contrary to the popular belief, there indeed is no God.
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!
I think what Americans may not realize is that they are pricing themselves out of work and assuming that the rest of the world can't possibly develop the technology, skills and resources to do what America has. That is a shocking bit of arrogance, and likely the cause of the current "crisis". If there is an exec candidate from Bulgaria that will work for a third of what some American then guess which is a better business choice? All things being equal aside from salary demands makes the choice pretty simple.
The other nifty thing about a free market is that change isn't always to YOUR benefit, but it may be for the benefit of the system itself. Its like an ecosystem. You are selecting yourselves out of jobs. Its like a predator that can only eat a certain type of high-quality meat and only if it is fresh and only if variable A, B, C, and D are in place. Guess what? A predator that isn't so damn picky is going to flourish unless something else exists in that ecosystem to keep it in check. You could try to legislate the problem away while the rest of the world learns to adapt, resulting in isolation. The risks are obvious if you look at the issue from this perspective, so I won't try to lay them out further.
The answer could very well be in the CEO salaries, but somebody in charge deserves credit for success. Back to the ecosystem perspective, consider this: the biggest lion gets the most meat. Even if that meat is rotting and the rest of the pride can't survive. Eventually that big lion dies too. Basically what I'm saying here is that I don't entirely disagree with you specifically.
perl -e 'print $i=pack(c5, (41*2), sqrt(7056), (unpack(c,H)-2), oct(115), 10)'