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Outsourcing As A Source Of U.S. Jobs
An anonymous reader writes "The Economic Times, India's leading financial newspaper, reports that Diana Farrell, Director, McKinsey Global Institute during her speech at Nasscom 2004 said that Bureau of Labour Statistics is predicting a job gain of 22m in the US by 2010, against a job loss of 2m, due to offshoring. You can read the full article here."
and they dont count underemployment. I know alot of engineers who are flipping burgers and selling stereos burdened by student loans (which survive bankrupcy!).
Religion is a gateway psychosis. -- Dave Foley
- In the last three months, more than 40 percent of the unemployed have been out of work more than 15 weeks. That's the worst number since 1983.
- According to the monthly payroll survey for January, jobs rose by 112,000. Before you start cheering, that doesn't actually keep up with population growth.
- Since the recovery officially began in November 2001, employment has actually fallen by half a percent, while the working-age population has increased about 2.4 percent.
All of these facts (with more available) come from Paul Krugman's editorial in the NYT today. His column should be required reading for anybody who wants to talk about the economy.Actually you should have no problem getting in to a Chemistry Masters program. You will have a longer prereq phase to catch up to those with an undergrad background in it. E-mail or call an admissions advisor at a school you're interested in. Even if you can't jump right in to their Masters program, they'll tell you what you have to do. Worst case you would have to be a non-degree student and take the classes you need.
It is true that most places frown on two Bachelors degrees unless they're from different colleges, like one in CS and one in art or theater. Once you get your Bachelors, you can load up on as many Masters and PhDs as you have time for.
Once it's a publicly traded company with subsidiaries and partnerships in multiple countries it doesn't really matter. The ships will be re-flagged, the profits will be transfer priced to tax havens, and the plants will be upgraded to wherever labour and environmental standards are the worst.
With agreements like the MAI, it doesn't really matter where the head office is. If the company's publicly traded, it'll be held by Institutional investors and round and round the profits go. The only ones that see the benefits are the executives.
Here's where you're wrong. Profits do not lead to growth; Growth may be a strategy to increase profits. Growth (in business terms) may not lead to more jobs, or those jobs may be elsewhere.
The desire for more profits may lead to expansion, but only if that's what will result in higher profits. Take Porsche for example. Increasing their production capacity tenfold would likely lead to lower net profit, as it would erode their sticker price. Prestige is their buying motivation. Make Porsches commonplace and you lose the prestige.
In the forest industry, it was quite common in the 90's for a company to open one new higher capacity plant while closing an old plant. The old plant often employed more people (the new one was more mechanized). The company has grown, but less people are employed.
Similarly, An auto manufacturer may "grow", increasing it's production capacity by outsourcing parts that had been produced in-house to multiple offshore subsidiaries. By shifting it's ratios of parts supplied by each plant they can keep costs the lowest, while billing the highest in the countries with the lowest effective taxes (transfer pricing). Now the company has grown by increasing it's profits, but there are less jobs.
Offshoring depends on the market for your product not decreasing to increase profits. Unfortunately, if production is commonly offshored from the consuming market, incomes fall in the market, leading to less sales, which decreases profits.
(For those who've never taken an ethics course, this is called Kant's Categorical Imperative.)
This is only true is the growth is distributed evenly. Logic does not bear your assertion out.
A "growing economy", in business terms simply means that larger amounts of money are being transferred. If I were to sell you a rock for a promissory note for 200 trillion dollars, then buy the rock back for the promissory note, we would have increased the GDP by 400 trillion dollars, which is about 4000%. But who did this benefit? Only me, as I'd now have an asset with a book value of 200 trillion dollars (liquidating this asset is annother matter).
Much of what goes on in the economy (and one of the areas of largest growth) is companies acquiring eachother and merging. Often this is done by a stock swap. If two large companies swap stock at market value, the book value of the transaction adds to the GDP, and it appears that the economy has grown. Rarely are jobs created by stock swaps. The merged company may decide to grow, but often the reason to merge is something that precludes growth.
to Canada.
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http://www.siliconindia.com/shownewsdata.asp?ne
The amount was 13.5 billion dollars.
US used to grant an aid of $25 million to India annually. That too was stopped when Congress got worked up over some issue. But India is now attracting investment, not aid. See the various projects underway here:
http://www.bharat-rakshak.com/ubb/ultimate
From the article: She pointed out that the Bureau of Labour Statistics was predicting a job gain of 22m in the US by '10, against a job loss of 2m due to offshoring.
And then there's this article, which points out that because of globalization, technology and stagnant prices, none of the old statistical models of employment work, and apparently no economist has come up with a new model, since their predictions over the past year have been completely wrong.
So I doubt I'd trust what any economist, or group of economists, or the BLS, has to say about future employment numbers.
--Rob
Towards the Singularity.
The lack of job growth in the US, despite the looting of the Treasury for subsidies to these rich people, once again destroys the argument of "supply side" economics. After the debacle of Reagan's supply side, the last time these unemployment numbers were close to this high (excepting Bush Sr's next-closest nadir), you'd think this nonsense would be rejected
If you examine the Reagan Economic Record you'll see that Supply Side economics worked very well. During the Reagan years, real family incomes increased for all income quantiles, proving that a rising tide indeed does lift all boats.