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The Full Outsourcing Discussion
GileadGreene writes "Thomas Friedman of the New York Times recently did an interesting Op-Ed piece about the "silver lining of overseas outsourcing": the growth that it generates in the US job market as Indian companies outsource work that US workers are better at. Apparently total exports from US companies to India have grown from $2.5 billion in 1990 to $4.1 billion in 2002 as well. So maybe this outsourcing thing isn't so bad after all." Ultimately, free trade works out well; I think one of the issues is that white collar jobs are just beginning to feel the pinch, and are acting like manufacturers did in the 1970s and 1980s.
>The 90% of the shares owned by US investors aren't
>owned by your next door neighbours, they're owned
>by multimillionaire investment traders.
Wrong! Most of the shares are owned by individuals through:
1. pension funds
2. 401k plans
3. mutual funds
Institutional investors, such as those university endowments, own a much much smaller amount of stock than you think.
Most stock owners are way way below the millionaire level.
Get some facts and quit parroting democrat liberal mantra bs lines.
I really wonder if Harvard's endowment managers worry about whether or not the companies that they invest in send jobs overseas.
It certainly works out for the American companies selling the products.
Except whoops, they aren't American, turns out their headquartered in the Caymans for tax reasons. And their products are manufactured in China or Malaysia, and their customer support is in India.
But it does boost their executives, who live in the U.S. Though not legally, they also legally live offshore for tax reasons.
There are lots of good arguments for free trade, but Friedman doesn't know them.
Insourcing (the opposite of outsourcing) is actually increasing more quickly than outsourcing is. Over half of all Americans own equities (i.e. stocks or mutual funds). So either you have a better source for your facts than I do, or you don't. But the information I have flatly contradicts your concerns.
I do not have a signature
Apparently fewer students are pursuing EE/CS as a career. Supposedly down 33% over the last two years at MIT, 23% in the country as a whole this year. Potential gradual students are opting for Wall Street instead. See an article in today's NYT
All the computers are from Compaq. The basic software is from Microsoft. The phones are from Lucent. The air-conditioning is by Carrier, and even the bottled water is by Coke
Right, the problem with this 'argument' is: 95% of the computer is made in Taiwan or China, the MS sofware is outsourced in India, the Coke is bottled right in India, the AC units are probably made in Japan, etc.
This article offers no proof of any kind that outsourcing is good for the US economy. It just uses a random collection of impressions ('oh my, they use Compaq here too', 'man, good thing they drink Coke, they don't get malaria') and then jumps to the conclusion: 'outsourcing is GREAT, it creates jobs in the USA!'.
Thomas Friedman has been the choir boy of the Bush administration at the NYT for quite some time now. So much for the 'liberal' media. I can't believe they keep him on staff.
there's no place like ~
More sophisticated investment vehicles such as hedge funds usually have their money tied even more closely to the fund. The managers of LTCM, for example, used to be heavy investors in their own fund. Additionally, their fees were usually a percentage of the return -- if they made no money, then they (virtually) didn't get paid, whereas if they showed positive returns, they took a (large) cut of the returns.
For similar arguements, check out a recent op-ed by economist Paul Krugman and a recent article on outsourcing in the Economist.
Yes, I referenced an article from the Economist. I realize that makes me a f#$%'n prick.
Do a little research please...
The reason why the unemployment rate has been falling is because people have been being crapped out the other side of the unemployment intestine, so to speak.
The rate has been going down because less people have been in the workforce, as it's measured. Compared to the numbers normally entering the workforce, the number of jobs has been dropping like a rock for the last 3 years or so.
The unemployment rate is dropping not because of domestic job creation, the rate is dropping because people are falling out of the bottom of the system. According to the Bureau of Labor Statistics, we are in the middle of the highest rate of long term unemployment (not working 6 months or longer) in 20 years. There are more than enough stats to support the arguments of liberal and conservative consituencies, which as one poster already suggested implies that the debate is not necessarliy a politically oriented one.
:-)
Proponents of offshoring like Bush economic advisor Gregory Mankiw like to talk about how increased productivity eventually leads to job creating investment in the economy. That's fine of you're talking about a domestic economy -- growth stays home. In a global economy, the same principle holds, in toto -- the job creation doesn't necessarily occur in the same countries where the productivity is reported because outsourcing works for commodities (sorry guys, software IS a commodity these days) and the focus is no longer placed on whiz-bang ways to make it, but rather how to make it cheaper. Hmmm, does this mean we can thank object oriented programming and code re-use for the outsourcing fiasco? Bring me the head of Grady Booch!
Jokes aside, we need to remember that (especially since the bubble burst), corporations are run by bean counters. And to bean counters are like crackheads, if saving a little money is good, saving a shitload of money is great -- even if there are negative side effects (like the destruction of the middle class). And like the addicts they are, they will go through all sorts of mental gymnastics to explain/justify their addiction. Only when confronted with the truth, in the right way, can you make an addict accept the truth of his disease. What we could benefit from is an economic/mathematical model that would confirm the hollowing out effect we constantly complain about.
Just to qualify myself on that addiction stuff, I've been clean & sober for 16 years by the grace of God.
"You can never win or lose if you don't run the race"
The unemployment rate is dropping because there is less people looking for work. How can we have less unemployement when there are less jobs now than there was in 2001? So why are there less people looking for work? Is it because so many people are discouraged because they can not find any decent jobs? Are more people retiring each year than are being added because of immigrants and our youth? Just come to western Michigan and discover how many jobs are going to foreign workers and have yet to be replace with any new jobs. How can anyone have a decent career when one has to start over with every recession in another career thus losing any benifits one has earned in the previous career.
This is where comparison with American unemployment rates with European unemployment rates break down. For one thing, unemployment payments in the US lasts only six months (where I live anyway). In Germany you can stay on unemployment forever theoretically, as long as you're really applying for jobs. I'm sure if the US did away with unemployment payments altogether, unemployment rates would go down even more as people laid off from white-collar jobs would be applying to work at McDonalds and whatnot that much quicker. Whether this is good or bad depends on whether you are a worker, or a member of the idle class like Paris Hilton who benefits from the misery of people who work for a living.
Here's how you 'stop' looking for work. Let's say I'm a high power software developer, and get laid off. I apply for unemployment benefits, so now I'm included in the unemployment statistics. My unemployment benefits run out in say, 8 months, but I've stil not found a job. My unemployment benefits run out. Eventually I can't survive on $0/month any more, so I get a job at the local movie theatre. I'm no longer counted as unemployed.