The Full Outsourcing Discussion

Free Trade helps megacorps by grub · 2004-03-01 04:02 · Score: 5, Insightful

Hemos adds: Ultimately, free trade works out well

then I read this in the article:

"look around this office." 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, because when it comes to drinking water in India, people want a trusted brand. On top of all this, Nagarajan said, 90 percent of the shares in 24/7 are owned by U.S. investors.

OK, so that's how Free Trade works out well: domestic workers are put out of jobs but the big multinationals reap the benefits. Where are the phones from Lucent and the the Carrier air conditioners manufacturered? Where does Coke bottle the water? They don't ship it over from the US. They probably have a filtering and bottling plant down the street.

The 90% of the shares owned by US investors aren't owned by your next door neighbours, they're owned by multimillionaire investment traders. They don't give a shit about the people making them the money, they're just cogs in their money-machine.

Saying Free Trade works out well because faceless corporation make billions is just plain wrong.

--
Trolling is a art,

Re:Free Trade helps megacorps by Anonymous Coward · 2004-03-01 04:21 · Score: 1, Insightful

> fund managers make zillions based on return. they don't care.

Fund managers don't own the funds they manage.

That is why they are called 'mutual' funds.
Re:Free Trade helps megacorps by nodwick · 2004-03-01 04:23 · Score: 4, Insightful

The 90% of the shares owned by US investors aren't owned by your next door neighbours, they're owned by multimillionaire investment traders. They don't give a shit about the people making them the money, they're just cogs in their money-machine.
Not true. For example, Coke (KO) has a market cap of over $121 billion. Even Bill Gates, currently the world's richest man at $46.6 billion net worth, can barely afford a third of Coke even if he liquidated all his holdings in everything else.
You're right in that major shareholders are institutions - Coke's float is 67% held by them. However, that's because "institutions" are usually just investing the public's money. Coke in particular happens to be one of the S&P 500 companies -- know all those people invested in mutual and S&P index funds? Chances are most of them, including a few of your "next-door neighbors", own at least a few shares, and what profits Coke profits them too.
Ultimately, if you think that big multinationals are the ones that are going to be making the money, there's nothing that's stopping you from hitching your money to their wagon. There's nothing stopping you from being one of those investors that's profiting from their returns. Especially in this day with low-cost online brokerages, it's a fallacy to think that only rich people can afford to be investors.
Re:Free Trade helps megacorps by Anonymous Coward · 2004-03-01 04:26 · Score: 1, Insightful

I might agree with you that a lot of people own stocks but how many of them depend on them as the only source of income.

I don't know about you but most of the people I know make living doing their job rather pocketing money made on stock market. So if they loose their job it is not likely they will survive on gains that they can get on their investments.

BTW, you are not supposed to take money in your 401K before retirement.
Re:Free Trade helps megacorps by agslashdot · 2004-03-01 04:29 · Score: 4, Insightful

>Wrong! Most of the shares are owned by individuals through:
>1. pension funds
>2. 401k plans
>3. mutual funds

And when I don't have a job, who is going to be putting money aside in my 401K ? You ??
Re:Free Trade helps megacorps by Alice+Springs · 2004-03-01 04:31 · Score: 5, Insightful

The complexities of the issue are not simple reflected in the idea of equity holds by 'workers'. They are much better understood in terms of household balance sheets. Most households balance sheets are, by and large, debtor balance sheets: the car, the home, credit cards, etc. As it stands, people have been able to carry this debt but it is becoming increasingly difficult to do so ... evidenced by record bankruptcy filings despite the increased difficulty in filing bankruptcy. No, we are looking at naive capital vs. labor here. Naive capital looks for a return using simple world models. These models systematically fail because they do not capture the complexities of the real world. For example, if all jobs are shipped overseas because labor is cheaper in india/mexico/china then no one has a job in the US. If no one has a job in the US then no one in the US can be a buyer of products and services. So, the aggregation of seemingly rational choices result in an irrational conclusion. Sophisticated capitalists exist: George Soros and Blair Hull to name two. The US is a kind of democracy. The intent of the Founding Fathers was that jobs be shipped overseas because (a simple world model) suggests is cost efficient to do so. From the preamble of the US Constitution: "We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America." Oddly, this is something so-called 'conservatives' sometimes forget.
Re:Free Trade helps megacorps by transient · 2004-03-01 04:43 · Score: 5, Insightful

I've read No Logo and I disagree. Branding is an important function. When you run out of toothpaste, do you perform a complete, rational analysis of all competing products? Somehow, I doubt it. I'll bet you just go out and get the same kind you had before. If Colgate consistently produces a product that you like, then why shouldn't you keep buying it? Likewise, I own a Honda Accord and I'm quite pleased with it. I can reasonably expect to be to just as pleased with another Honda if I choose to buy another one. If cars weren't branded, I'd have to tear them apart to make a purchasing decision. I will admit that it's deceitful and stupid when a brand tries to attach itself to a lifestyle, but I think you're ignorant of your own tendencies if you claim that branding is somehow inherently bad.

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irb(main):001:0>
Re:Free Trade helps megacorps by kin_korn_karn · 2004-03-01 04:55 · Score: 2, Insightful

seems to me that the people that can figure out how to live without working are the enlightened ones, not the ones whose lives are spent enslaved to corporations.
Re:Free Trade helps megacorps by CelloJake · 2004-03-01 05:05 · Score: 3, Insightful

Hmmm.. So you are saying that they need more of my money? If you want to have money get a job. I know lots of people hiring. I Seriously fear the day that welfare pays as much as minimum wage.

-Jacob
Re:Free Trade helps megacorps by StillNeedMoreCoffee · 2004-03-01 05:06 · Score: 3, Insightful

Well Lets see. The current conservative governement wants us all to be stock holders because they truely believe that that will make Republicans of all of us.

To that end they want to replace "assured" retirement with "un-insured" stock ownership. Companies with the help of government have gotten out from under the onus of having to actually be responsibe for their employees after they retire, some after being with a company faithfully working for 20-30 years. All the time making profits for the company. Business wants it simple. I pay you and we are even. But of course in that process of getting rid of the pensions and going to 401K's they haven't increased benefits to employee's, they have reduced them, near term and more importantly far term.

The Government is wanting to follow along with this trend with Social Security. The Republicans are drooling to push the saftey net off onto individuals. With "privatizing" Social Security which is the same thing as shifting pensions to 401K's and talking of cutting down existing benefits.

These are why people own stock. Not because they choose to. I would venture to say almost no one wants to trade a certain retirement benefit for the massive uncertainties of the stock market. In these plans there is not certainty. What do we say to our elderly that will rely on these sources of income for their later life. "I'm sorry, another CEO robbed his investors (probably not a liberal) and the stock market fell for a year while you needed the money for another operation. You will have to pay your Hospital bill anyway and we are evicting your from your Home and selling it to pay the debt."

Please, this risk is a real risk with real short term concequences for you and me and everyone. Lets put it into real persective. What it means to those people that will have to live with it.
Re:Free Trade helps megacorps by Anonymous Coward · 2004-03-01 05:16 · Score: 2, Insightful

Even more importantly, without branding companies have less incentive to produce good product because they do not have to worry about their reputation. If Honda consistently makes a good product, then the name Honda derives a large value in the market and they will take steps to not screw that reputation up. So, although it is possible that a good brand will make a bad product, the better the brand is the more they will [or should] try to avoid doing that. Thus justifying the consumer's desire to get reasonable brands, and brand loyalty in general.
Branding is in fact a good thing, because it allows the consumer to short-circuit a complete analysis of all the competing products---which is coincidentally neither cost effective nor feasible for your toothpaste. (Or perhaps the ``Branding is Bad(TM)'' people will suggest that I spend a few hours of my life choosing every tube of toothpaste that I buy, wasting hundreds of dollars of my time whenever I want to brush my teeth?)
Re:Free Trade helps megacorps by __aanebg9627 · 2004-03-01 05:20 · Score: 5, Insightful

Many Americans own equities, but actual wealth is increasingly concentrated in the top couple of percent. The comparitively few equities that most Americans own are not likely to make up for the loss of wages they'll face from outsourcing.

It's much more likely that the real beneficiaries will be that top couple percent who hold the bulk of the wealth. And the half that doesn't hold equities will not benefit, they will be harmed.

Free trade benefits the 'factors of production' that are relatively plentiful: in the U.S., it's land and capital. Until recently, I would have said educated workers too, but the outsourcing craze shows that my uninformed gut feeling on that was incorrect. The shortages in India and China are land and capital.

If India and China were small or medium-sized countries like Mexico or the Philippines, I would not worry a whole lot -- the U.S. economy and population would be large enough to absorb the shocks from free trade without huge changes in living standards. But the populations of India and China are huge relative to America's, and their economies significant. It's entirely possible that when the dust settles, America ends up changing more than they do.
Re:Free Trade helps megacorps by globalar · 2004-03-01 05:42 · Score: 4, Insightful

The only alternative to branding is a market with extremely high barriers to entry (maybe something like airlines), where licensing and government oversight (inspections and a chain of regulations) are required to operate. In such a market, products can be expected to meet certain standards, so the lowest priced option should be satisfactory if you consider those standards to be valuable (what you want). Note, this takes large scale government involvement and standards do not encompass all the needs/desires of the consumer - usually they only outline major needs and leave desire for the seller to detail. The government however, does not keep apace with a changing world as fast as a completely free market would, so innovation is not always invited and sometimes fought. Plus, all taxpayers (let's assume most of the market or consumer base for that market) pay taxes to sustain government regulation. So really, those standards are a tax in themselves.

But ultimately, brands still win because trust, whether the buyer identifies it as such or not, plays a role in economics. A brand functions similar to, but much more effectively, than a price. A brand can identify quality, a consistent product, past experience (HUGE+), and a host of other factors which can be unique or generic to that product. Similarly, price abstracts the value of something in terms which the buyer and seller can quickly relate ("Do I want to spend $x on this?", for example). Competitive price and recognized brand are a proven combination for success.
Re:Free Trade helps megacorps by B'Trey · 2004-03-01 05:46 · Score: 2, Insightful

Also note how the fellow mentions that people want a good brand when buying water: The people don't care about the bottle, just who bottles it.

What do you think the definition of "good brand" is? Perhaps it means a brand who has a known history of producing good products; one who can be trusted to provide a quality product for the money?

As for _No Logo_, there was a recent issue involving Firestone tires. They tended to come apart and cause accidents. Don't you think it's nice that all of the Firestone tires have "Firestone" written on the side so that I can avoid buying them in the future? Or would you prefer that all tires come unbranded, and you just hope that you don't get a Firestone the next time you need tires?

--
"The legitimate powers of government extend only to such acts as are injurious to others." Thomas Jefferson.
Re:Free Trade helps megacorps by Anonymous Coward · 2004-03-01 05:56 · Score: 1, Insightful

Over half of all Americans own equities (i.e. stocks or mutual funds)

What's the average value of the stocks/funds owned by the bottom 95% of these people?
Re:Free Trade helps megacorps by drooling-dog · 2004-03-01 06:12 · Score: 3, Insightful

Branding is an important function.
That is true as far as it goes; if nothing else a brand gives some reasonable assurance of product uniformity and a repeatable consumer experience. That's what you're looking for in your Honda; if your neighbor had a good experience with his/hers and recommends it to you, you'd like to be able to expect to duplicate that experience.
However, brands can also be surrogates for rational decision making. They are often favored simply because they are familiar, and of course marketers go to great expense to make them that way through advertising and other forms of exposure. It's easy to go into a grocery store and find branded breakfast cereal - cereal! - selling for $4 or $5 per pound, right next to virtually identical store brands at $2 or less. It's the consumer's choice, of course, but nearly all of the "information" and influence reaching the average consumer supports the more expensive option. In poorer (e.g., inner city) areas where large supermarkets are scarce, the cheaper option is often not accessible at all.
In general I've personally gotten into the habit of avoiding heavily advertised brands where possible, and cooking from scratch whenever I have the time (it takes less than most people think, if you keep a few basic ingredients on hand). I've found that cheaper is often better, and I'm not bothered at all that I don't see happy people using my toothpaste on TV a dozen times a day. That's not worth an extra penny.
Re:Free Trade helps megacorps by br00tus · 2004-03-01 06:19 · Score: 2, Insightful

Right, like Paris Hilton, the Walton heirs, the Mars heirs, George W. Bush, Andrew Luster...they are "enlightened ones" for being born with silver spoons in their mouths and not having to work (because they are forcefully expropriating surplus labor from those who do work), while wage slaves are the "unenlightened" ones. This is akin to saying Haitian slaves were unenlightened for working for their masters. Of course, they solved that with quite a bloody revolution. As did the French people against their feudal lords. In fact, I can recall numerous instances of worker revolt against capitalism, and although I know the wealthy are saying their prayers that this will end I have a feeling that the millennias-long struggle by workers against their masters, from Pisistratus and Spartacus, to Durruti and Makhno, has not ended
Re:Free Trade helps megacorps by leviramsey · 2004-03-01 06:38 · Score: 2, Insightful

As one might expect, you're ignoring facts.

Globalization makes the rich richer and the poor poorer. Why do you think the WTO is protested everywhere it goes?

The WTO is to free trade as Budweiser is to a quality beer. It is an enemy to free trade and should be done away with.

Meanwhile, though, I will challenge your assertion directly. Throughout history, free trade has done nothing less than make the rich richer and the poor even richer than that.

The most recent example that can provide a framework for understanding the economics of outsourcing is that of the current Asian Tiger economies (Japan, South Korea, Taiwan, Hong Kong, and Singapore). Thirty and fifty years ago, they were, for all intents and purposes, Third World economies (Japan being there because of military devastation). They all realized that their only real resource was the labor of their populations. In order to build wealth, that labor would need to be converted into wealth.

Any businessman will tell you that, when you're selling something in a new market where there's already well-established competition, you need to either make a product that is much, much better than the competition or be the cheaper one.

In the labor market at that time, Japanese/Korean/Taiwanese/etc. labor was inferior to that of the West. So that meant that they had to underprice the West to get through the door. And the workers were virtual slaves. But what happened? A middle class developed from those virtual slaves. That middle class was able to educate itself and start its own businesses, accelerating its economic growth.

The USA became the dominant economy on earth by being cheaper than European (specifically British) industry.

So what do these instructive examples indicate that, as more and more labor gets outsourced to India, and other Third World countries, those countries will develop functional Western style economies and become economically on a par with the West (with the aforementioned Asian Tigers being part of the West for this purpose).
Re:Free Trade helps megacorps by jefeweiss · 2004-03-01 07:51 · Score: 2, Insightful

It's more likely that India is going to buy cheap stuff from China then expensive stuff from the US. The balance they talk about in the article comes from India outsourcing jobs to the US in areas where Indians can't produce as well. Perhaps, we have better investment banking, or lawyers. The US can't compete in most export markets that aren't heavily subsidized (such as agriculture.) Other countries have too much of an edge in cheap labor and nonexistant environmental standards. We have to rely on our vaunted world class educational system to keep our edge on the world market. Umm ... maybe Burger King is hiring.
Re:Free Trade helps megacorps by jefeweiss · 2004-03-01 07:59 · Score: 3, Insightful

Facts? I see no facts here! Come on, Find some statistics.

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.

The majority of stockholders in number may be below millionaire level, but I doubt they own the majority of stocks. If 100 million lower income Americans own an average of $1000 in stocks and 1000 other Americans own an average of $1 billion in stock, then "most stock owners are way below millionaire level." It just so happens that the 1000 people own 10 times more then the 100 million people. Isn't it fun to mislead with statistics? Don't feed me your rich peoples propaganda crap! Question the authorities that are feeding you such BS statistics.

works out? by aconn · 2004-03-01 04:03 · Score: 5, Insightful

Ultimately free trade works out well. As far as I know we have yet to see how free trade really works out. We've seen it's short term results, that's all.

The idea that America has an advantage in certain areas always comes up. But what jobs are Americans better at when the definition of doing a job well is increasingly based solely on the cost of labor?

Re:works out? by squaretorus · 2004-03-01 04:09 · Score: 3, Insightful

Ultimately free trade works out well.

Not only short term, but not even free trade. There are so many trade agreements, barriers to trade, direct illegal embargoes and other 'not-at-all-free' elements to trade in and with USA, EU, ANY big market that to call it Free Trade is misleading.

Like calling McDonalds burgers beef - it might have come from a cow - but it aint beef! just look at the shape!
Re:works out? by Frymaster · 2004-03-01 04:20 · Score: 5, Insightful
There are so many... barriers to trade,
hooray! more "barriers to trade" please!
when the ftaa was being signed there was a lot of talk about subsidies to industries and regulations on producers as being "barriers to trade". i can only presume they were talking about things like:
- public healthcare. a public system means corporations don't have to provide health insurance for employees. that's a "subsidy" to the industries in the country with public health.
- safety regulations. if my country has higher worker safety standards than another country my domestic industry can claim that local safety standards are a barrier to export and take the government to the wto.
- environmental standards. there are a lot of exceptions on this in the wto and ftaa agreements, but the bottom line is that any new environmental legislation can be construed as trade barrier. just look at the kerfuffle over mmt. is mmt bad? probably not. but sovereign nations should have the power to decide to ban it if they want, without having to get the approval of exporting nations' corporations.
so, more barriers to trade please!
--
2 1337 4 u!
Re:works out? by dubl-u · 2004-03-01 04:32 · Score: 4, Insightful

Ultimately free trade works out well. As far as I know we have yet to see how free trade really works out. We've seen it's short term results, that's all.

Global trade volume has been increasing for centuries. So has wealth and employment, both globally and in the US. If trade is bad for us, it's taking an awfully long time to show it.

Trade, whether international or domestic, is made up of lots of little trades. And in every trade, the person on both sides makes the trade because they think they'll be better off. When you buy a computer, you'd rather have the computer than the money; the seller would rather have the money and lose the computer. On average, both sides win. Otherwise we'd stop trading.

Of course, although we win on average, not everybody in specific wins. Government tax revenues on the increased wealth should be used to help support and retrain those whose jobs are lost to trade.

But what jobs are Americans better at when the definition of doing a job well is increasingly based solely on the cost of labor?

Smart consumers and smart bosses never by on cost alone; what they buy on is value, which is benefit divided by cost. American workers may cost more, but they're also very productive compared to many countries.

If you're worried about your job being outsourced, put your energies into making sure you're giving your boss the best value he can get, and make sure he knows it. Continuing professional education is one good way, and I'm sure people here can suggest others.

We should also make full use of a big advantage: proximity. Old-style development methods that rely on requirements documents are vulnerable to outsourcing; you can just ship that requirements document to Elbonia. But Agile methods like Extreme Programming make better use of proximity. XP, for example, requires that instead of writing documents, the product manager must sit in the same room as the developers. This increases software quality and productivity in ways that an outsourcer, be they in Buffalo or Bangalore, will have a hard time matching.
Re:works out? by avdp · 2004-03-01 05:10 · Score: 3, Insightful

If you're worried about your job being outsourced, put your energies into making sure you're giving your boss the best value he can get, and make sure he knows it. Continuing professional education is one good way, and I'm sure people here can suggest others.

That's nice, but from experience outsourcing is not done on a job by job basis, they are usually done for a whole organization (possibly in waves). And these kinds of decisions are made well above my boss' level (or my boss's boss for that matter). These decisions are made in the board room and numbers is the ONLY thing they take into consideration. How productive we are in irrelevant when they can have an army of Indians possibly less productive individually, but more productive as a whole (or so they hope anyway).

Even if you are twice as good as they are, they are 10 times cheaper. Remember that.
Re:works out? by leviramsey · 2004-03-01 05:40 · Score: 3, Insightful

Indeed, the outsourcing is one of those fads in business. It's the latest snake oil being sold to business by MBAs.

You know what the last such snake oil was? It was IT. For around 25 years, the mantra was that it didn't matter how much you spent on IT, any investment in IT would pay off tenfold. As a result of this IT mania, we had the dot-com boom and bust.

Lo and behold, businesses discovered that some IT investments were paying off massively. But many of the investments ended up being disastrous losers.

The same will happen with outsourcing. Businesses will realize that it's not a panacea. In two or three years, we'll see a front-cover story in Forbes reporting just that. And with that, the shareholders will stop clamoring for management to outsource. It will become a case of, "what are the specific costs and benefits of outsourcing this project?"

sure.. by freerecords · 2004-03-01 04:03 · Score: 5, Insightful

sure.. it's good for the fat cats, but when is life not going to be? the points brought up in the article - 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 - wherever the offices are in the world these things will be provided by these companies or such like. The only people whose pockets are getting lined are the Fat Cat's, not Joe Geek who just got pushed out of a job.

--
tim

Re:sure.. by millahtime · 2004-03-01 04:11 · Score: 2, Insightful

"only people whose pockets are getting lined are the Fat Cat's, not Joe Geek"

So, what your saying is we all need to become investors and we're set. Then we can be Joe Geek and a Fat Cat at the same time. If I was a rich Investor think of all the toys I could have.

--
Evolution or ID?
Re:sure.. by be-fan · 2004-03-01 04:23 · Score: 3, Insightful

Such is the nature of a capitalist economy. The more money you have, the easier it is to make more money. If you don't want that kind of disparity, the solution is not to prevent people from making money, but to vote for higher taxes and thus greater income redistribution.

--
A deep unwavering belief is a sure sign you're missing something...
Re:sure.. by Crispy+Critters · 2004-03-01 04:25 · Score: 4, Insightful

"wherever the offices are in the world these things will be provided by these companies or such like."
You caught TF's glaring mistake. A Compaq computer bought for a tech-support desk in India does no more for the American economy than the same computer bought for a tech-support desk in the US.
The fallacy that whatever makes more money for a US company must be good for US workers and consumers is subtle in comparison. (It may be true in many or most cases, but it is not a priori true.)

Outsourcing is a non-issue by Anonymous Coward · 2004-03-01 04:04 · Score: 1, Insightful

All it is is hiring workers who do the job best, without regards to where the worker is. No big deal. There is nothing wrong with hiring the best worker.

Re:Outsourcing is a non-issue by strictnein · 2004-03-01 04:12 · Score: 4, Insightful

All it is is hiring workers who do the job best, without regards to where the worker is. No big deal. There is nothing wrong with hiring the best worker.

How is this insightful? It's just plain incorrect. It has nothing to do with the best worker, otherwise you'd have call-centers filled with highly paid experts.

It's about hiring someone who can still do a decent job and saving money, with a heavy emphasis on saving money.

--
Casual Games/Downloads
Re:Outsourcing is a non-issue by I8TheWorm · 2004-03-01 04:23 · Score: 3, Insightful

Except it has absolutely nothing to do with who is best, rather it has everything to do with who is cheaper. You really don't see any outsourcing of US IT jobs to England, Germany, Japan, etc... You see them going to India, China, Lithuania, etc... (no offense to residents of those countries) because people will simply work for less income than in the US.

--
Saying Android is a family of phones is akin to saying Linux is a family of PCs.
Re:Outsourcing is a non-issue by Anonymous Coward · 2004-03-01 05:17 · Score: 1, Insightful

Well, it's like this.

As the world is today, You, The American Consumer (YTAC) can buy (e.g.) a new Windows box for $600. If outsourcing were forbidden to all parties involved, that same box, with the same software and support, would cost maybe $1000.

Therefore, YTAC are better off, in that your money goes further.

The flip side is that You, The American Worker are suddenly having to compete for your jobs with foreigners. That means that if *they* can do something as well as YTAW, and they're cheaper, you'll lose your job.

Therefore, YTAW should find a job that They can't or won't do better. "What job?", you cry. To which I reply, "I'm not a recruitment consultant."

But YTAW have enormous advantages over anyone in India, in proximity to market, education, cultural affiliation, knowledge and opportunity. If you can't leverage those advantages to *your* advantage, maybe you just don't deserve that extra money you've been paid all these years.

it creates jobs by Srividya · 2004-03-01 04:04 · Score: 3, Insightful

There are many Americans who must call my programming company in Tirupathi with software specifications, requirements, bug reports, and customer feedback. All of this information must be managed between the American company buying the software and our Indian engineers. Are the people who manage this information not employed?

Satisfaction Issue by SynKKnyS · 2004-03-01 04:06 · Score: 4, Insightful

I think customer satisfaction is a major issue in outsourcing. I remember a friend complaining non-stop about Dell's customer service being incomprehensible after Dell switched to outsourced call centers.

$1.6 billion in revenue Thousands of jobs? by strictnein · 2004-03-01 04:08 · Score: 3, Insightful

This must be some new economic theory. That a $1.6 billion dollar trade increase is somehow more beneficial than tens of thousands of good paying jobs.

Very interesting.

--
Casual Games/Downloads

Soylent Green is made of peeeeooopppplllleeee!!!! by Saeed+al-Sahaf · 2004-03-01 04:11 · Score: 4, Insightful

Middle class is shrinking, and there aren't that many more rich people...Soylent Green is made of peeeeooopppplllleeee!!!!!

Seriously though, if we continue (to allow our "representatives") export middle and upper-middle class jobs, we WILL see a depression, and I don't mean like the '80s, I mean a real depression. We're more than halfway there already. It's too bad we keep electing politicians that just sit back and allow the corporate wonks to masturbate them.

--
"Who are in control, they are not in control of anything - they don't even control themselves!" - Glen Beck

Key question unanswered by sphealey · 2004-03-01 04:11 · Score: 5, Insightful

OK Tom (and others of similar ilk): we have all taken Micro/Macro 101/102. We know what the theory of comparative advantage is, and how it is supposed to work in theory (of course, the difference between theory and practice is...).

Now, could you please answer just one question? We in the US were told when we shipped all our manufacturing jobs, and most of our dirty work, to the Third World, that all would be OK, because we would retrain to do the work of the mind. Which supposedly has a higher value.

Now that all the work of the hands is gone, we are starting to ship the work of the mind elsewhere. When the work of the hands and the work of the mind is gone, what exactly is left?

Please be precise, specific, and complete in your answer. Thanks.

sPh

Re:Key question unanswered by agslashdot · 2004-03-01 04:24 · Score: 4, Insightful

what exactly is left?

That's precisely what NY Senator Chuck Schumer asked. America is becoming a nation of high-paid lawyers & doctors & ballplayers, serviced by low-paid walmart workers & sanitary workers & handymen. What about the middle class, constantly squeezed out of existence by these Benedict Arnold CEOs ? Gosh, I sound like John Kerry & I don't even like that guy that much.
Re:Key question unanswered by Sentosus · 2004-03-01 04:39 · Score: 2, Insightful

The jobs of the minds are not gone. They are not leaving. We are able to further educate ourselves to a level that we can not be matched by other countries. For example, we go to school for 14 years as a majority. After that, we often go 4-6 years in a secondary education. We are 22-24 years old at completion of a higher education. The countries doing the labor jobs are not able to place their workers into an educational system that lasts 1/3rd of their life span and maintain productivity levels that are satsifying enough to fund the previous education levels.

They are stuck on a slow process. This is just part of breaking down borders. Stop thinking the US vs. India and start thinking Thomas Perry vs. Ty Hai (Coworker of mine) and then you realize that you are presonally responsible for maintain more abilities and a larger working knowledge than your competition.

If you can not win the better jobs, don't you think it is about time you went back to school and studied as hard as your competition? There are no easy routes and it is not going to be that way for a long time.

Ty and I are going to lunch now.
Re:Key question unanswered by dabadab · 2004-03-01 04:45 · Score: 3, Insightful

First, not all the "work of hands" has been taken out of the USA - or at least I suppose (since I don't live there) that there are still people collecting trash, flipping burgers, driving trucks, etc. So, there are still blue collar jobs that are still in the USA - because it did not make sense to move it to elsewhere for whatever reason.

Second, what I see in big multinationals is that it is the lower tier of the work that gets "outsourced" (done in branches in poorer countries) - high level design, project managment, etc tends to stay where it is.

Third, outsourcing is not that cheap. Chances are that once cheap programmers will demand more and more and you have to move to another country and thus lose much of the accumulated knowledge and experience. Witness it in Europe: rates in the Czech Republic, Slovakia, Hungary, etc are getting more and more closer to the German level so new branches are founded in Roumania, Ukraine, etc - but there is only so much you can move to the East: sooner or later you'll find yourself on the West Coast ;)

Your create a problem by taking a trend to the extremes - but if history teaches us anything, it is that trends DO change.

--
Real life is overrated.
Re:Key question unanswered by madro · 2004-03-01 05:04 · Score: 2, Insightful

Your question assumes that the work of the mind is a uniform task. There are easy works of the mind, and hard works of the mind. As the tide of outsourcing rises (and the extent to which outsourcing is increasing is certainly up for debate), you have a variety of choices:

1) Lower your standard of living. Continue to do what you're doing, and get paid less. Or switch to a different career if that's all you can find work in.
2) Follow the jobs. My parents moved to this country to pursue opportunity. Labor mobility means you may have to move to another state or another country to find work. People are moving from Michigan to North Carolina; it might be time to start some Mandarin classes.
3) Climb to higher ground. This means finding "high-value" work. The U.S. has the greatest post-secondary education system in the world -- lots of non-citizens come to our universities to get their PhDs. Our financial markets are also world class. Think of creative work, design work, marketing work. Write something. Invent something. Sell something.

Comparative advantage will grow more intangible over time, but it will not go away. The comparative advantage will come from what collections of people can achieve. Los Angeles for entertainment, Austin (or Research Triangle) (or Silicon Valley) for tech, Chicago for commodities trading, New York for the financial industry - those are the large, obvious examples. Smaller cities with a good university within or nearby can be research havens. Large-scale manufacturing will give way to smaller-scale just-in-time flexible manufacturing. (Don't make commodities, make value-added custom items that can demand a market premium!)

One problem I have with the question is that the real, honest answer is, "I don't know. But someone will find the answer." If we all knew what the next big thing was, we would already be doing it. But historically, technological innovations have always been shrinking the world - ships, railroads, cars, planes, telephones, next-day delivery, same-day delivery. Historically, technological innovations have replaced labor with capitol: domesticated animals, tools, machinery, robotics, AI. I have to admit that there has to be a smidgen of faith to claim that as a civilization we'll be fine with this, too. But every time, there have been people who have said, "This time it's different. This time the rules have changed forever." Maybe - who can say for sure? But I don't think that's the way to bet.

I cannot deny that there will be a lot of pain involved. One of the things a good government should do is provide a safety net for those who are adversely affected by a market economy. But if we're so against outsourcing, we should tell Toyota and BMW to close down their plants in the U.S. We should demand that LOTR be re-shot in Oregon. We should pay surcharges on our laptops and cellphones so that they can made in the U.S.

My personal response to the threat of outsourcing? Short-term: Do more internal IS/IT work. Long-term: Get a PhD and start teaching. Other people's responses: Become a lawyer. Become a nurse (huge shortage!). Move back in with your parents. (Can't say I'm a big fan of that last one.)

India buys computers! by yagu · 2004-03-01 04:12 · Score: 4, Insightful

I'm a little confused by the article... It states that this is a plus for U.S because all of these outsource sites buy Compaq computers, drink Coca Cola, etc. So, are we to believe those same centers here would not?

It's not a joke by Anonymous Coward · 2004-03-01 04:12 · Score: 3, Insightful

One of the frequent jokes about outsourcing is that the one group that will never be outsourced is management. That's not exactly true. If you were a company that wanted to hire a firm to write software for you, who could do it cheaper? An American firm who hires Indian programmers or and Indian firm whose entire employee roster works in India, including its management? At some point down this slippery slope to the cheapest price, even the "fat cats" are going to feel the effects.

Exports? by nycsubway · 2004-03-01 04:12 · Score: 4, Insightful

It seems that $4.1 billion is not quite as much money as is lost by the people in the US not being able to buy things HERE because they dont have jobs. All that money goes directly to the corporations, and their CEOs when they sell any product. Eventually they'll simply start producing the products in the countries they're selling them to. They can make compaq computers in India if they need to.

In the long run, outsourcing will create some jobs, but it will be a fraction of the jobs that we currently have. Sure, people can retrain and new industries will develop, but the rapid loss of jobs puts a damper on the economy, one which can be tough to bounce back from.

The corporations are not worried about this, because they can still export products to other countries. Everyone else will have trouble.

--
http://github.com/gbook/nidb

Do you even understand how this effects people? by GoofyBoy · 2004-03-01 04:13 · Score: 3, Insightful

> I think one of the issues is that white collar jobs are just beginning to feel the pinch,

Ask anyone who has lost their job if it felt like a "pinch".

--
The surprise isn't how often we make bad choices; the surprise is how seldom they defeat us.

Is it really surprising? No. by Anonymous Coward · 2004-03-01 04:14 · Score: 1, Insightful

Is it surprising at all? America's ludicrously high tax rates and unnecesary regulations essentially say "it is not good to do business, live, or work here". Don't be surprised if people do what the government encourages them to do.

Just what does the US make anyway? by lavalyn · 2004-03-01 04:15 · Score: 4, Insightful

(start -1 Flamebait rant now)

- Manufacturing in the US (save automotives) is all but dead as those get outsourced to other nations where labor is cheaper
- Information management (programming) is outsourced off to India
- Cultural production is stifled and held in the hands of the Hollywood few
- Creativity production is stifled and bound by the overworked USPTO and overbearing DMCA

When the nation is nothing but accountants, lawyers, and doctors, whose primary role is to redistribute, rather than create, wealth, don't go crying when suddenly people realize you add nothing to the table.

(Well, this explains an awful lot of why US laws are like that. When you create woefully little, you must defend that little with all your might. Think: if the US can actually compete despite their higher costs because they add more value, what'd be the point of the tight-fisted IP laws?)

--
Doing the Right Thing should not be preempted by making a buck.

But how long can this continue? by RawCode · 2004-03-01 04:15 · Score: 2, Insightful

Would there not be a desire for Indian startups to replace the outsourcing to US comapnies, with cheaper Indian or Malayasin people? I'm sure there is an indian computer manufacture that can make a PC to run Windows, and replace Compaq in this place. Or, better yet, run Linux.

This counter-outsourcing just seems like a slowing of the bleeding.

first, manufacturing. now, tech. by millia · 2004-03-01 04:16 · Score: 3, Insightful

the thing that he doesn't mention in the article is that those microsoft and compaq products he mentions are increasingly being produced by foreign workers.
microsoft is outsourcing.
i would be flabbergasted if those compaqs are made in america.
i realize that things are changing. it is inevitable. perhaps, if customer service improves due to actual customer support being economically feasible, that is a good thing.
however, what is the end game here? first, the manufacturing jobs left- but don't worry, there are going to be plenty of high-tech and knowledge worker jobs available.
now, those jobs are disappearing- both tech and knowledge. there are only going to be a limited number of those creative positions that he mentions that are available. if you don't believe that, try getting a director's job in hollywood.
i thought that maybe certain things would be immune- like washing machines, etc., that are too large to be shipped from asia- but mexico just got another manufacturing plant from maytag the other day.
and now that manufacturing barriers for media (tv, films) are declining, i don't see america maintaining its dominance there indefinitely.
what is the end game, again? what are we going to do to survive? what will pay enough to enable a family to own a house and a car?
competition is good. trade is good. but the next twenty years in america are going to be rough if we don't start thinking about these things, to avoid having a nation of burger flippers or anointed creative types and ceo's. and if the numbers get more skewed, we may yet wind up with a democracy instead of a republic.

--
stored on computers from birth to the grave

In fact, they are pension schemes. by Moderation+abuser · 2004-03-01 04:16 · Score: 3, Insightful

"The 90% of the shares owned by US investors aren't owned by your next door neighbours"

Guess who are the people driving the relentless spread and tyrannical globalisation of free markets?

Little old grannies. No kidding.

See all that money their now deceased men folk paid into pension schemes for decades? They want it back... With interest...

--
Government of the people, by corporate executives, for corporate profits.

Free Trade requires equal enviornments by Zergwyn · 2004-03-01 04:17 · Score: 5, Insightful

The ideal of free trade, the idea that competition helps to spur innovation, increase efficiency, and generate jobs, clearly has significant truth. As Americans, we already have an example that should be obvious: the states themselves. Between each state there exists free trade, something that wasn't the case under the Articles of the Confederation. It was specifically changed so that there would be a single source of currency, no tariffs, etc. In many ways, it is just like free trade between countries, and it has obviously been tremendously successful. With some exceptions, the United States is certain very strong economically and technologically, and the states all do well.

However, this example also illustrates a very important caveat to this whole situation: the competition can only be productive if there is an equal baseline established. As a country, we have decided that certain qualities are important to us, such as a clean environment, worker's rights, education, health care, etc. These are national policies, enshrined in institutions from the EPA to the FDA, and thus every state is subject to the same requirements. And it is here that the comparison with international Free Trade breaks down. If companies in India are not subject to the same requirements, if they are not required to care about the environment etc., then it is not really free trade. American companies can't ever hope to compete, burdened by costs they can't control. Instead, we merely subsidize a temporary exploitation of a less developed country. Once India and other countries develop to a similar level, they will likely begin to care about more of the same things, and at that point competition can begin to truly flourish without a need for restrictions. But in the mean time, I don't see how true Free Trade can exist without unfairly undermining important values we hold.

Outsourcing is bad for companies too by KamuSan · 2004-03-01 04:19 · Score: 2, Insightful

Like I said elsewhere, outsourcing is bad for companies in the long run, because they give away important knowledge:

Outsourcing is a big problem. I can't imagine why a smart thinking company with any common sense would export intimate knowledge of his core business processes and pay for it too!

So because every CEO and his goat is tripping over himself to do exactly the same as all his competitors are already doing, all these companies are flushing their corporate secrets to third world countries.

Might as well do law school then, because that will be the only business model that generates any revenue at all in the years to come. If only to sue all these outsourcing shops who suddenly decide that your (local) competitor, or your foreign competitor pays better for their (read: your) knowledge.

Re:Outsourcing is bad for companies too by Dr.+Bent · 2004-03-01 04:29 · Score: 2, Insightful

I can't imagine why a smart thinking company with any common sense would export intimate knowledge of his core business processes and pay for it too!

But in many cases, the work being outsources isn't part of the core business. Take Bank of America for example. They outsourced a large portion of thier IT to India. Why? Because they're a bank, not a software company. It not in thier interests to train long term employees to do a job that is not central to thier core business. Bank of America will always be a bank...it may or may not take advantage of information technology in order to fulfill that purpose. Outsourcing the IT work to India ensures that they concentrate the most on what they do the best, which is the hallmark of a good company.

adaptation by slim+hades · 2004-03-01 04:19 · Score: 2, Insightful

I am thinking in a historical sense here, so bare with me.

Us as a species in general have been pretty adaptive over the ages. We adapt to new enviroments through the plasticity of the body, we adapt to new problems through the complexity of our mind. There is a change now in the way our country outsources work to a place where it is cheaper.

Regardless of whether or not we like this, it is a business decision at best. I have seen companies make decisions like these on a daily basis, this is just in different context.

We could opt to fight for the return of the way things were done before, or we could adapt. Develop skill sets that make us innovative, and refresh the markets we currently work in.

Evolution is funny like that. The saying is only the strong survive.
Time to see who's been limping along in the herd and cull it.

*note: authors opinion is not a reflection of Slashdot's, Computer Geeks, 90% of apes with egos, or pretty much anyone but himself*

Big Fucking Lie by Anonymous Coward · 2004-03-01 04:20 · Score: 1, Insightful

How the hell can a person who is making $5 a day doing the coding work that used to pay $100,000 a year in the US supposed to buy the CONSUMER goods that drive exports?

This is nothing more than Republican propaganda. There is no recovery from outsourcing. If you don't believe me, LOOK AT DETROIT! It was outsourced in the 70's.

Re:umm by Anonymous Coward · 2004-03-01 04:21 · Score: 1, Insightful

I don't know why Americans are whining this much. Do you understand that globalization (US being the MAJOR benefactor) has increased the cost of living in countries like India. Stop whining crap guys.

Stop trying to swim upstream by Ars-Fartsica · 2004-03-01 04:21 · Score: 3, Insightful

Yes outsourcing is sending away great jobs. Duly noted.

Yes outsourcing is putting thousands of people out of work. Duly noted.

Yes outsourcing is driving down wages. Duly noted.

Everything you would ever want to carp about regarding outsourcing has been stated, you do not need to retransmit. The issue is now what are you going to do about reality. Are you going to bellyache about it and hope your low-grade tech skills will somehow merit $80k again? Or are you going to find those spaces where outsourcing won't or can't go and pursue ruthlessly?

The US has spent a quarter century ramming free trade down the world's throat and gleefully telling everyone else to "deal with change!". Well now that goes for you too. Outsourcing is reality. Route around it or be a victim. EOM.

Re:Stop trying to swim upstream by Hiro+Antagonist · 2004-03-01 05:18 · Score: 2, Insightful

It's not really about low-grade techs "whining" that their FrontPage skills won't net them a six-figure salary; it's about fantastic technicians unable to get a $10/hr tech support job, because they've all been sent overseas. I know a large number of very competent people, all of which I would hire had I a position to put them in, who are working for Starbucks[1] and Pep Boys because the jobs just don't exist anymore.

The U.S. has spent a half-century (this all started in about 1949) ramming *our* flavor of globalization down the collective throat of the world, and it is ironic that we are reaping our just rewards. I give the U.S. economy maybe enother fifty years of life, before we either fall to third-world status or suffer a very violent revolution. A first-world nation is not one in which a hundredth of a percent of its population works in executive management, and the rest work at McDisneyWalbucks.

[1] To Starbucks' credit, they treat their employees well; healthcare for part-time workers, a free pound of coffee per week, great pay for entry-level service-industry management, decent pay for the grunts.

--

--
I Hit the Karma Cap, and All I Got Was This Lousy .sig.
Re:Stop trying to swim upstream by GOD_ALMIGHTY · 2004-03-01 06:52 · Score: 4, Insightful

"Are you going to bellyache about it and hope your low-grade tech skills will somehow merit $80k again? Or are you going to find those spaces where outsourcing won't or can't go and pursue ruthlessly?"

Could you please repeat that about low-grade tech skills to all of my recently laid-off friends with Masters of CompSci degrees and patents pending? The statistics have shown for years that a PhD would price you out of the market. These people are as highly educated as the market will bear.

My team has to fight every week from getting Architecture and System Design from going to India. We're the cream of the crop on this project and management will only pay lip service about how some customers will want Architecture and Design to stay onshore. The reality is that every project where the customer does not make this demand, everything but QA and Business Analysis (both entry level jobs) will be offshored. Quality be damned. You can afford mistakes when they cost 20% as much. Expect another Dot Boom-Bust cycle in India due to the capital flowing in at such a high-rate.

I'm seeing this now. It is fact, there is no part of IT that is safe. There is no white collar job that is safe. No level of education or productivity is going to save your job. As for persuing these new growth markets, where the fuck are they? There are no margins anywhere anymore. The international free trade has made the system way too efficient. We've tweaked the engine as much as we can and it's running pretty hot.

If there were areas that needed efficiency added, those areas would have good margins. Where are the good margins? If you own a patent (pharmi, software, chemical) you can make good margins on your patent. If you have a copyright on popular work (TW, RIAA members, Disney, Fox, Viacom) you can make a margin on that. If you have a government mandated industry (auto/home/health insurance) you can make a margin. If you do gov contracting (esp Defense) you can make a 20% margin.

Retail electronics (consumer audio/video) are losing margins b/c of convergence and compitition from PC makers. The Economist had an article about Retail Banks overextending their risk in order to get better returns and worrying a lot of analyists in the meantime. Financial services in general are getting squeezed due to the Internet, now everyone has near-perfect information in real-time. I could go on all day listing industries whose margins have dried up in the past 15 years. Due to the lack of standardized environmental and labor regulations in most of the world, it's a free for all race to the bottom. World standards of living will not rise fast enough for this to stabilize for at least another 100 years. The US is only trying to employ about 210 million people out of 300 mil. The world needs to educate and employ about 3.5 billion people out of 6 billion.

The only solution is a legal structure that promotes fair trade so that societies can adjust to the new circumstances brought about by increased trade. This includes the US. The main street of the American economy has gone from a dirt road to an 8 lane highway, we need some traffic lights.

Those that decry regulation talk about how everything will equal out in the long run and that the opposition are just chiken littles have their head in the sand. My favorite quote from Keynes is "The market can remain irrational longer than you can remain solvent". We need the middle class to remain solvent long enough, so we can capitalize most efficiently on the new economic structure that will come out of this new trade.

We are not going to be able to magically create growth and innovation by handing the rich bigger bags of money. They'll invest it in what is safe, we should be subsidizing minimum amounts of manufacturing and tech work for national security reasons, while also creating a more progressive income and capital gains tax system. Bush's tax cuts, due to lack of Fed funding have caused sales tax to go up 30%, on average, nationally. Sales tax is regressive,

--
Arrogance is Confidence which lacks integrity. -- me

Re:Maybe nothing by ReidMaynard · 2004-03-01 04:22 · Score: 2, Insightful

The slippery slope is "does the same job"; does this mean "is assigned the same position": or "performs same job with equal perfomance" I think for example having USA telephone customer support trunked to India is an example of confusion in this area.

--
-- www.globaltics.net

Political discussion for a new world

Liberals? by AusTai · 2004-03-01 04:23 · Score: 2, Insightful

What it is is that you are using the pejorative "liberal" for anyone who doesn't agree with you. Consider the possibility that different "liberals" feel strongly about different issues.

if American workers by dpilot · 2004-03-01 04:24 · Score: 4, Insightful

That is as BAD a generalization as any one an American makes.

Owing to hundreds of years of immigration, the US is one of the most diverse nations on Earth, despite the effort of the likes of WalMart and McDonalds to homogenize us.

"does the same job" can be a diffuse and difficult thing to measure. Witness the return of Dell support to America - because Indian workers weren't well-rooted in American culture. The same would happen if the tables were turned. Last I heard, American workers were incredibly productive.

As for overpriced, it goes with the cost of living. But that same cost of living sells lots of products for the very same companies that want to outsource. The article says that Indian companies buy US goods, but do Indian consumers? If an American company shifts an American job to India, does it also shift that purchase of its product? Will an Indian consumer base arise as fast as the American consumer base is destroyed?

--
The living have better things to do than to continue hating the dead.

Free Trade does work out well by jjo · 2004-03-01 04:25 · Score: 5, Insightful

Free trade does work out well, but the problem is that it does involve both winners and losers, in the short term. The short-term losers know exactly what to blame: free trade. The winners, by and large, are diffused through the entire economy and over the course of many years: they benefit enormously from free trade, but they don't know it.

For centuries, protectionists have traded on this asymmetry. They point to the real, obvious, and acute problems caused by trade, and deny any theoretical 'ivory-tower' benefits because they are in the unknown future. This is the thinking that resulted in the Smoot-Hawley Act in the US, and similar measures throughout the world, contributing to the profound and lasting slump through all of the 1930's.

Today's protectionists, of course, say that they aren't like that, and that they only want to stop 'bad' trade. But what is 'bad' trade? In the end it still boils down to what it has always been: 'bad' trade is trade that adversely impacts politically powerful groups (such as farmers, steelworkers, perhaps now programmers), regardless of the damage such trade restrictions cause to the economy as a whole.

What was true 200 years ago is still true today: protectionism ends up leaving us all poorer.

Re:Free Trade does work out well by startled · 2004-03-01 07:31 · Score: 2, Insightful

"Free trade does work out well, but the problem is that it does involve both winners and losers, in the short term.... What was true 200 years ago is still true today: protectionism ends up leaving us all poorer."

Absolutely. Which is why we need a moderated approach that embraces the long-term benefits of free trade, but doesn't leave tens or hundreds of thousands of unemployed totally in the lurch.

It should be no surprise that some politicians are protectionist-- after all, they're elected to represent the people, and a lot of people stand to lose from outsourcing. A guy who's 55 and loses his entire sector to outsourcing might not care too much about the long-term benefits to people in other sectors and age groups-- he, entirely rationally from a self-interest point of view, will be quite upset with the movement of jobs overseas.

We could try strategies to slow down outsourcing, or at least to reap some money from it-- why are outsourcing costs tax deductible, for example? We could offer job training programs or tax incentives. There are numerous other strategies for mitigating the short-term pain of outsourcing, and we certainly need to do so.

Unfortunately, this issue is sufficiently charged that people who attempt to take moderate stances are often accused of protectionism, worker abandonment, or both simultaneously.

Re:What happened to by Anonymous Coward · 2004-03-01 04:27 · Score: 2, Insightful

Ah, but you fail to mention that the buggy whip manufacturers were supplanted by firms mainly IN THE SAME COUNTRY.

Sort of an important point.

Note, I'm not against free trade necessarily, but something's out of whack here.

unnecessary regulations by dpilot · 2004-03-01 04:27 · Score: 4, Insightful

You bet! Regulations about chemical safety, for instance, (like methyl-iso-cyanate) are completely unnecessary. Just ask the people of Bhopal.

--
The living have better things to do than to continue hating the dead.

Re:Free Trade is a Double-Edged Sword by be-fan · 2004-03-01 04:28 · Score: 4, Insightful

I don't get conservatives. They espouse the merits of capitalism and the free market(one of their few good ideas), yet when it comes to actually breaking down trade barriers to free the market, they do a 180 to bend over for their base --- few of which actually understand capitalism.

--
A deep unwavering belief is a sure sign you're missing something...

Which dollars? by jkabbe · 2004-03-01 04:29 · Score: 2, Insightful

The problem with comparing dollar amounts is the question arises as to whether we are talking about constant dollars. Assuming a 4% annual rate of inflation that $2.5 billion in 1990 would be expected to grow to $4 billion by 2002 without any real increase in exports. So it's hard to tell if this really means anything....

Look sparky, by big-giant-head · 2004-03-01 04:29 · Score: 4, Insightful

What you are saying is correct, but unless you own enough stock to live off dividends, that doesn't do 90% of the people any good. Who cares if the stock I own is doing great, IF I DON'T HAVE A FRICKIN JOB AND CAN'T PAY MY BILLS............... That is the boat that increasing numbers of Americans find themselves in. It's great if my investment is doing well because all the big multinationals have shipped jobs and manufacturing and accounting overseas, but my investment alone won't provide me a living....

This is a concept the young replublican, right wing, econ-nazis' need to learn to deal with, or as Dlyan said these times will be a changin'

--

So Long and Thanks for all the Fish.

Re:Look sparky, by Gondorian+Warrior · 2004-03-01 04:51 · Score: 3, Insightful

Does this mean that the rest of the world should stop buying US products? Afterall if we buy something from the US, that means that we're not maing it ourselves and in the process someone in the UK who could have made that product is out of a job.

Good points, less abuse please by fiannaFailMan · 2004-03-01 04:30 · Score: 5, Insightful

You actually have some good points to make, but you let yourself down with confrontational comments like:

Get some facts and quit parroting democrat liberal mantra bs lines.

I really wish that political discourse in the USA would calm down and grow up. It would help people to find the middle ground and actually understand the issues if we had fewer Rush Limbaughs and Al Frankens shouting abuse at each other.

--
Drill baby drill - on Mars

Oh, and that was all about nothing by sam_handelman · 2004-03-01 04:30 · Score: 5, Insightful

It isn't as though the number of manufacturing jobs in the US has shrunk, or real manufacturing wages have fallen, since the 1980s. No, that has not happened at-all.

I don't doubt that free trade will generate a great deal of wealth. The question is - who will get it? In the example of the Coca Cola-brand bottled water sold in the Indian corporate park - how much of that wealth ends up in the hands of white collar workers?

Obviously - those who have power will use it to secure for themselves a share of that wealth. Duh.

This is not even about workers in India and the United States "competing" with eachother.

Let's take an instructive look at the case of caterpillar. Caterpillar (they make tractors) maintains factories both in the United States, and in Germany, and in third world countries. They have, in fact, more factories than they need to build enough tractors to meet demand.

So, when American workers went on strike, they simply increased production in their German (and Mexican, IIRC) factories. The German workers make slightly more than their american counterparts would-have but that doesn't enter into it. With the additional power provided by their international organization, caterpillar was able to break the strike.

So, yes, free trade does generate wealth. But, as with other aspects of trade and commerce (slashdotters are most familiar with the effects of intellectual property law) it will also tend to concentrate existing wealth in the hands of those with the power to take advantage of it.

Pretending, in the case of so-called "free trade" for which ample data is now available, that this is a net benefit for the relatively powerless general population is utterly facetious.

To put it another way - there are all sorts of events, dependent on free trade, might generate wealth for the general population. However, that has no input into the process by which events are made to occur. Events are made to occur because they benefit a particular group of individuals, powerful enough to actualize them. This may or may not have some benefits (lower commodity prices, in this case) for the general population which may or may not outweigh the costs (lower wages, lower employment level) to the general population. Theory can take us this far and from here we should rely on the evidenciary record.

I think it is abundantly clear from the past ten years that the movement of jobs overseas harms the general population more that it benefits the general population.

--
The good and new comes from no quarter where it is looked for, and is always something different from what is expected.

Pure Crap by bratgrrl · 2004-03-01 04:31 · Score: 2, Insightful

Thousands of American cities and towns have never recovered from the mass exporting of jobs- autoworkers, fabric mills, shoes and garments, lumber and steel, etc etc. And now white-collar workers are getting it in the rear.

Yeah, this is like so good for the country. Christ, what kind of delusion does this guy live in? They better get those Chinese markets opened up, because Americans are going to be too poor to buy anything.

--

---

SCO is weenies
Gator is Spyware
Microsoft is thugs

Fund manager fat cats by fnj · 2004-03-01 04:32 · Score: 3, Insightful

> > fund managers make zillions based on return. they don't care.

> Fund managers don't own the funds they manage.

Parent's parent had the reasoning wrong, but he's right in his conclusion. Fund managers don't care because their remuneration is obscenely high, even though hardly any of them even match the performance of the simple index.

Incompetent as they are, I doubt most managers are quite stupid enough to buy their own funds.

Walking the fine line as America 'matures' by dpilot · 2004-03-01 04:35 · Score: 2, Insightful

The US has had 200+ years of incredible growth and opportunity as it grew to its potential. Not that our potential is filled, but for the most part our boarders are. The easy part of growth is over.

We are at the decision point.

We can either go on with 'mature growth', or we can turn aside, with things like protectionism. At the same time, we need to understand what Free Trade really means, because fairness must be part of it. IMHO, the precedent to watch is/was the Muslim world around the time of the Renaissance. Up until then, the Muslim world had been the shining light of the planet. After that, they turned their backs on all of the things that made them great. (like science and math)

Creation Science alongside Protectionism, anyone?

--
The living have better things to do than to continue hating the dead.

Economy of middlemen by CarrionBird · 2004-03-01 04:40 · Score: 2, Insightful

Once you outsoucre all froms of labor, what is left?

Middlemen and executives

No wonder there are so many out there singing the praises of outsourcing. But can anyone give an example of a working economy (I said ecomomy not market) of only managers and salesmen?

Feh.

--
Free Mac Mini Yeah, it's

I don't get you by big-giant-head · 2004-03-01 04:41 · Score: 4, Insightful

Look I used to be a tried and true replublican till I saw my friends jobs being outsourced overseas, and the suffering they went through. Then I was laid off and out of work for 9 months ( which is apparently minimal from what some folks have told me), found a new job that pays 20,000 less a year, thats a pinch, being out of work for 2+ years and having to take an $9.00 job is a punch. Basically Bush and the Fox-News crowd don't care, they have thier millions and could care less if the rest of us starve.

Then in the name of religion, they use issues like Gays, abortion, prayer in public schools... ( all issues they have used since Reagan and done extactly nothing about in the last 20 yrs) to suck in the voters from the religious right, that they would otherwise never get, to vote for them and continue looting the US, and throw the evangelicals a bone every now and then.

I have had enough, I plan to use the Reagan formula 'Are you better off than you were 4 years ago???' No, bye bye Repubs... it's that easy.
I don't care if there is Gay marrige, cats and dogs living together, whatever as long as I can provide for my family. Thats the bottom line, the rest of it is window dressing.

--

So Long and Thanks for all the Fish.

I think Tom missed a few important points... by SmilingMonk · 2004-03-01 04:41 · Score: 4, Insightful

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...

I read Tom's comments on how he saw Pepsi and other companies expanding into South Asian markets and I think he missed at least one important point. How can he compare Pepsi's (and other low-tech companies and functions) expansion into South Asia to technology jobs outsourcing? It seems a little under-educated. Here's what I mean.

For Pepsi to move into India probably required the construction of new manufacturing and distribution facilities. Production continued in Pepsi's traditional markets and probably had little impact on peoples jobs in places such as the US. There was probably little or no job "outsourcing" required to add carmel coloring and sugar to filtered water and CO2. Pepsi's overall headcount probably increased and the net effect on the US economy was job stability (unless or until the colored fizzy sugar water is imported from overseas).

Now let's take a look at our favorite industry, computer technology. IBM, Microsoft, HP, Motorola, municipal governments, and many other groups are moving (notice I did not say expanding) jobs to India. The jobs here in the US are replaced by (perhaps several) jobs in South Asia. The net effect on the US economy is job loss.

I think this gets to the nub of why Tom is wrong. Just like with textile, steel, glass, and automobile manufacturing, jobs lost to overseas labor remain jobs lost. BushCo likes to talk about the "freeing up" of the US economy to "do other things". Nice theory. In practice the gap between the have's and the have-not's (investors/boardmembers/managers and labor) in this country is ever widening.

And manufacturing states are better off? by tjstork · 2004-03-01 04:41 · Score: 4, Insightful

We keep talking about how a crisis came in the 1970s and 1980s as manufacturing jobs were destroyed in the United States, as if it were in the past tense.

But, last time I checked, all the previous centers of manufacturing that were once booming cities are still teetering impoverished ghost towns.

A small list of the casualties of the last big free trade expansion:

Akron
Boston
Buffalo
Chicago
Cleveland
Detr oit
Erie
New York City
Philadelphia

Shall we add to the list these IT cities?

Austin
San Diego
Phoenix
Redmond

Maybe we should just trash all of our cities?

--
This is my sig.

Re:And manufacturing states are better off? by I_am_jsking · 2004-03-01 05:12 · Score: 2, Insightful

No, maybe we should figure out a better way to compete. The United States cannot afford to be completely devoid of manufacturing, lest we be vulerable to forign price gouging, but we should really look at our strengths as a nation and apply our efforts there. Instead of complaining that our jobs were taken by someone else, figure out what jobs we can do better than anyone else and do those. It's a tough break for those people who consider themselves "untrainable" for a new job, but then, if you're willing to say you can't change, you don't deserve to anyway. The world is a very small place, find your niche in the USA, or simply move to India if you liked your old job so much.

Re:White collar jobs haven't felt the pinch? by Savage-Rabbit · 2004-03-01 04:45 · Score: 3, Insightful

There are many other examples. Read your history...

<rant>

Lets investigate one lesson of history....

If the Roman empire is anything to go by the USA will end up as a country of the jobless and destitute, ruled by the super rich, who hire the dispossessed citizen masses as what amounts to mercenaries in a state army who's cheif role it is secure resources and to make sure the overseas possessions that secure the good life of the super rich do not get taken over by the restless local natives of said overseas territories. But of course we will learn from history won't we?

</rant>

--
Only to idiots, are orders laws.
-- Henning von Tresckow

So choose buger flipper or manager? by ToasterTester · 2004-03-01 04:50 · Score: 2, Insightful

>>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.

Blue collar work went oversea and we have ghost towns in old factory cities. Now white collor jobs are going overseas and basic service jobs. So what's left flipping burgers or being a manager. The jobs of people who do most of the spending inside the US are going away. These CEO's have to be pretty short sighted not to see they are reducing the customer base.

Re:What happened to by sean.peters · 2004-03-01 04:50 · Score: 2, Insightful

Adapt and overcome. Learn new skills.

Okay, when the farming jobs went, we all learned new skills in manufacturing. Then when the manufacturing jobs went, those that could took up new skills in IT. Now that the IT jobs are going, what new skills do you propose we learn? The point is that the job market is being hollowed out from below much faster than people can retool for new work.

Sean

Glad you asked by fiannaFailMan · 2004-03-01 04:56 · Score: 2, Insightful

That's a question I'd love to ask the Republican speaker of the House of Representatives, Dennis Hastert, who joined the Democrats in rebuking the president's chief economic adviser, Gregory Mankiw, early in February for daring to suggest that outsourcing actually benefits the US economy by making everything more affordable.

As for your president, following his little performance on the steel tarriffs, can we class him as one of your dreaded liberals? After all, he brought in illegal protectionist measures and only backed down after the EU threatened retaliatory measures that would affect the export of goods from key states in the 2004 election.

"What is it gentlemen" indeed!

--
Drill baby drill - on Mars

Too, er, boisterous? by fnj · 2004-03-01 04:57 · Score: 2, Insightful

"You actually have some good points to make, but you let yourself down with confrontational comments ..."

"I really wish that political discourse in the USA would calm down and grow up."

My instinct is to agree that civility is desirable, but other factors can trump civility. I speak here without reference to specific posts.

Would it have been the right choice to tap Ghengis Khan, or Stalin, or the gentlemen whose initials are A.H. and must never be referenced in unrelated internet discussions,politely on the shoulder and say "Excuse me, sir, but I beg you to consider that what you are doing is unfair."

Confront the wrong. Confront lies. Confront evil.

That said, confrontation and incivility are not the same thing.

It's the cost and the speed... by LilMikey · 2004-03-01 04:59 · Score: 3, Insightful

The problem isn't outsourcing per-se. We all know free trade is Good Thing(tm) and putting up trade barriers will only make things worse in the long run but crap man, could you at least give the programmers a second to find a new vocation.

That's what's got us all pissed off. We spent thousands, often tens of thousands of dollars on a top notch education in a field that everyone said was the wave of the future only to lose our jobs a few years later. At least when manufacturing and textile jobs started to slide America bucked up and tried ebb the flow. Now there's a 'well, it's happened before and it turned out ok... so fuck off' attitude.

I'm not so worried about myself. I'm stable and satisified enough in my career but there are still a ton of college kids that got into the field either because it was still decently hot a few years ago or because of *gasp* a sincere interest in computers who are going to be quite screwed come graduation day. It would be nice for those fellas to have something to look forward to and hopefully the generation below them won't be stupid enough to go into something as unimportant to America as technology.

--
LilMikey.com... I'll stop doing it when you sto

Re:Please think it through by CelloJake · 2004-03-01 05:01 · Score: 3, Insightful

Hmm. If by a few years ago you mean before 1989? I seem to remember people were starving because they couldn't grow enough food. In the US, people call in to radio shows on their cell phones while driving their SUV's to complain about losing a job and at the same time our unemployment rate has been dropping steadily for the lat 8 months:

2003 06 6.3
2003 07 6.2
2003 08 6.1
2003 09 6.1
2003 10 6.0
2003 11 5.9
2003 12 5.7
2004 01 5.6

An important missing component. by EricTheGreen · 2004-03-01 05:09 · Score: 3, Insightful

Absolutely agree with the long-term benefits and even a few of the short-term ones.

That said, no one on either side of the issue seems to have a plan for how to ease the displacement and transition those affected people into these new "better" jobs.

Pro-multinationals expound benefits and the broad horizon of "better" jobs for Americans. Great, and I'm all for that--but what are those jobs? Not a whole lot of speculation or identification of these. If this isn't dealt with, these are going to turn into the economic equivalents of Iraq WMD--everyone knows they're there, but no one seems to be able to find them when it would most benefit them. Worse still, absolutely no one promoting multi-national work has any sort of plan for how to deal with the real disruption of real lives, with real consequences. C'mon folks, someone tell me something about training, support during displacement, the things those affected by this need to hear.

The anti-multinationals are even worse--blind, reflexive resistance to an economic force that, better or worse, is going to run it's course regardless of whether we like it or not. What are these people doing to lobby and advocate for the training, support and assistance the displaced are going to need?

Hey, I'm all for better, sustainable work and a career that builds on what I've already done, rather than locking me into a single competency. So somebody start defining what that is, how I get there, and, if the cost is my immediate employment, what support I have to get there.

Right now the answer to the above seems to be: "You're on your own, because no one has a clue." If that's the best the pro-multinationals can come up with, is it any wonder so many people are knee-jerk opposed to this?

Unfair?! by amightywind · 2004-03-01 05:12 · Score: 2, Insightful

It's unfair that you want all your products marketed globally," Kulkarni said, "but you don't want any jobs to go."

What a joke. The US trade deficit with the rest of the world is at absurd levels. For the size of the Indian domestic market US imports are paltry in comparison to what they sell here. That great sucking sound you hear is real net wealth being rapidly and permanently transfered from the US to Asia for short term gain. What exacerbates the problem is that China and India indirectly support the US domestic spending spree by plowing their profits into buying our cruddy treasuries and keeping interest rates artificially low.

--
an ill wind that blows no good

Re:Please think it through by Shisha · 2004-03-01 05:13 · Score: 4, Insightful

Think about it. If the entire employment of the US is outsourced (other than politicians, lawyers, doctors, nurses, hair dressers, and food preparation workers), there isn't going to be much of a market for stocks among the peons.

Yes, do as you say _think_ about it! But try to take it a step further. The scenario you've described is not that likely to happen, for a simple reason and that is: India won't be cheap forever! The Indian programmers will eventually start demanding better healthcare, education for the kids etc. Whether they pay for it themselves or the government taxes their income more does not really matter. The point is that it will evolve in some stable state, where the Indians will be as expensive as Americans. Want an example: Check out what's happening in Eastern Europe skilled workforce used to be dirt cheap there and is still probably cheaper than most Europe and e.g. in Prague the difference is becoming rather negligible.

Of course this might involve loss of income in America. But given the current situation, where couple of hundred million Americans consume rather bug share of worlds wealth, now that can't last forever can it?

The problem you're facing is to decide between being selfish and saying "all high paid jobs belong to us". Or being reasonable and saying, well acually the Indians deserve their share as well. Look up older Slashdot coverage of the topic to see that they're not working in sweatshops and that it's the Indians who benefit in the first place.

Of course you can resort to protectionism like you have with US and EU agricultural industry. Thirld world farmers can't export their cheap goods, because ours are far too subsidised. Furthermore EU and US dumps their produce in their market, below the production value, thus driving locals out of bussiness. See http://kickaas.typepad.com/ to get an idea of the outcome of protectionism.

You're old enough to know better by Mr.+Underbridge · 2004-03-01 05:14 · Score: 5, Insightful

Think about it. If the entire employment of the US is outsourced (other than politicians, lawyers, doctors, nurses, hair dressers, and food preparation workers), there isn't going to be much of a market for stocks among the peons. Not only that, but the lawyers will sue the doctors, the doctors will malpractice the lawyers, and the politicians will have no constituents, only a rebellion.

If you really are old enough to have remembered Goldwater, then you're old enough to have heard these tired arguments every five years every time ANY industry goes overseas. You're also old enough to (supposedly) have some historical context on this. Will all jobs go overseas? Well, over 50 years, almost ALL tech jobs will. I guarantee it. Hell, all the "tech" jobs from 1950 have. Is there anything wrong with that? No, because they're replaced by whatever becomes high tech.

Looked at another way, if the US maintains a static labor market, we will become irrelevant and reduced to 2nd-world status quickly. Would you want to have the same sort of jobs available to Americans now that existed 50 years ago? Of course not, because bolt-turning jobs don't pay well, because anyone in the world can do that now. Unless the US keeps innovating, there's nothing to sustain the high salaries commanded by US labor. Unfortunately, we haven't figured out a totally painless way of getting rid of jobs that become less-needed as we innovate, but getting rid of certain jobs has to happen. Don't worry, assuming the US economy stays healthy over the long term, they WILL be replaced. This has occurred in a healthy manner for 100 years. Note that the total loss of manufacturing jobs that has occurred over the last 50 years has had NO ill effect upon the US economy or unemployment. Do you have any reason to suspect this one is different as you claim? Or is it just because the white collar nature of these jobs hits too close to home?

Face it, this isn't a liberal/conservative issue anyway. The US is staring at its onrushing demise just like the USSR was a few years ago. In both cases it will be due to corruption and selfishness.

That's too ridiculous to even be speculative. The USSR collapsed because its centralized economy fundamentally didn't work, and because Reagan tricked them into a military spending spree - which gave us a bunch of debt but killed them. Put it this way - if you're so certain, how about a rough year for the US's USSR-style demise?

Re:You're old enough to know better by buffer-overflowed · 2004-03-01 05:51 · Score: 5, Insightful

There's a difference between manufacturing outsourcing and the current trend.

That difference is the level of education required and the cost of reeducation.

A manufactoring worker loses his job, he needs to retrain himself in another field, but he's not out previously spent education dollars for his high school diploma.

A computer programmer, electrical engineer, or another white-collar worker loses his job and he's out 30,000+ in sunk education costs(counting room and board, and even more for lost wages over a 4 year degree).

Both people are now in the same boat, but one has just wasted a vastly greater sum of money to reach that point.

--
The key to the enjoyment of pop music is to replace any instance of "love" with "C.H.U.D."
Re:You're old enough to know better by Mr.+Underbridge · 2004-03-01 09:08 · Score: 2, Insightful

My point is extreme, but these things do have a trickle down effect on the economy. I have no problem with free markets when they are all on equal or somewhat equal footing. I do have a problem with the amount of Corporate welfare that goes on in America.
That's certainly true, and if all (or a significant amount) of white collar jobs go overseas, then this will occur. But they won't, and there are a lot of reasons why, including things like currency devaluation and such. My point wasn't meant for rational people (like you), but for the people who somehow think that all jobs will go overseas.
I think America is fine because we keep inventing new high-tech fields all the time. Computer programming was the cool thing - once - but now the cool thing is nanofabrication (for example). And the US university system makes sure that most such startups are done in the US. The US gets the brightest minds from across the world, and keeps us on top.
As an aside, I think the programming market is picking up - I'm looking for jobs, and damn near everything in the sciences requires programming to some degree. I think the only person who's in trouble is the programmer who ONLY knows how to program, but employers want scientific or financial knowledge.
Know what they say about being a one-trick pony...
Re:You're old enough to know better by divisionbyzero · 2004-03-01 09:09 · Score: 2, Insightful

Your optimism is admirable, but I'm not sure that this situation is exactly the same as it was for the past 100 years. These jobs have educational requirements. To be honest, education is over-rated. Most people can be trained to do a job they were not educated to do, but usually a college degree is required regardless of its relevance. Maybe people should stop going to college? Maybe we should go back to the good old days when only the wealthy went to college and it was more a social event than an education?

Even if we do have new jobs created, we don't know when they will be created or in what field. In the meantime, people have mortgages to pay and mouths to feed. You admit yourself that we are not good at getting rid of jobs painlessly. Shouldn't we get better at it before we embrace the trend whole-heartedly?

This tendency to speak in generalities and based on long term projections is all well and good, but there are short term needs that need to be addresssed. I'd rather see this long term perspective focus on the problem rather be used to deny that there is a problem.

BTW, a soviet style implosion isn't out of the question. Russia may be the future of America, a country ruled by oligarchs and plutocrats. Unless things change, I'd say it could happen as early as 2025.

An arguement that I haven't seen being proposed! by zifferent · 2004-03-01 05:17 · Score: 3, Insightful

My problem with outsourcing to countries like China, and India is that American workers can't compete, and never will be able to.

With ~ 1.2 billion ppl in China, and ~ 1 billion in India, it's a question of supply and demand. Companies that locate factories or outsource in either country can pay whatever they want, and abuse the workers any way they please, because they have a virtually unlimited supply of labor.

So basically, this is how it works. Living wage and better jobs leave the US, leaving the newly unemployed unable to help support the US economy. Those jobs go to countries where wages are extrememly low and will remain stable for the next century because of population.

In those countries, the wages are too low and the working conditions not conducive to self-sustained economy growth. Basically, no consumer-class is being created. Hence, the argument that we are "spreading the wealth" or "creating economies that we can sell to" are moot if not disengenious.

Meanwhile, in the US, an as of yet non-existent "new industry" is supposed come along to create "new! better!" jobs, than the ones previously displaced by outsourcing to other countries. Contenders for the "NEW and IMPROVED" job creation engine are:

The previously mentioned and dicounted increased global trade (hint: currently our biggest trade defecit is with China.)

And BioTech which is still about 5-10 years from any major breaktrough. (but who's to say we can't outsource gene-sequencing. Doh!)

Finally, the political realities in those countries are firmly anti-labor, pro-business, and without organized labor and/or enforced government protections for the laborers overseas there can be no uppward pressure on wages and working conditions.

In those countries the only answer to labor exploitation will unfortunately be civil war witch only creates more poverty, more terrorism and more exploitation.

Unrestricted free trade can become a good thing for the US and the world if implimented slowly over decades, (unfortunately, having a country whose leadership changes every four years doesn't help, as it's not conducive to long term stategies.) but that would eventually create equallities between economies, and businesses wouldn't be able to take advantage of the currently encouraged inequallities.

Basically, the CEO's want to make their companies look good at the expense of the world-wide, future and present, middle class, or more to the point are too short-sighted to see where we're headed.

--
cat sig > /dev/null

Outsourcing - CEO's and the Board of Executives by ActionAL · 2004-03-01 05:19 · Score: 2, Insightful

Don't forget corporate CEO's and the appointed board
don't work for the people, but rather for the investors of the company.

Given this, it is obviously inevitable that offshore outsourcing will replace
many many jobs. Why? Basically it comes down to: Does the CEO and board
care about providing jobs to U.S. citizens or care about providing money to its investors?

Obviously CEO's and the board care about providing money back to the investors
by whatever means possible. "Whatever means possible" has been given alot of
meaning from insider trading scandals and cooking the books. "Whatever means possible"
also means if we can outsource the it, then so be it.

Workers will gripe because they finally wake up and realize that the company -does not care-
about the workers. Of course it is politcally incorrect to make the mistake of saying that if you
are a CEO or a member of the board.

As people are faced with these kinds of decisions in their lives, they will ultimately have to
answer for their basis, execution and consequences of their decisions.

A tax by any other name ... by dpm · 2004-03-01 05:20 · Score: 2, Insightful

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.

That's right -- in fact, any kind of protectionism functions just like a tax. If American consumers can buy equivalent goods and services cheaper from other countries but are not allowed to, then the difference in price is effectively a sales tax that the government is collecting on behalf of the protected industries.

For example, Canada applies protectionist policies against cheaper American milk, so a poor single parent with three young kids is paying what amounts to a 30% sales tax (or more) to Canadian dairy farmers every time she or he buys milk.

Re:Please think it through by Kanagawa · 2004-03-01 05:20 · Score: 5, Insightful

The Cato Institute thinks the following:

"The large majority of America's nonfarm workers, about 85 percent, are employed in service-providing industries, construction, and government--sectors where import competition is minimal. To those workers, imports are an unambiguous blessing that spurs innovation, expands consumer choice, and raises real wages." Full Paper Here

Moreover, this breifing goes on to argue employment grows in proportion to imports . There's a fairly rational reason for this, if we can all stop foaming at the mouth long enough to actually think rationally: when employment grows we (consumers) have more cash to spend on goods and services. Since imports are a relatively fixed percentage of the overall economy, whenever the overall economy grows, so must imports. Why am I discussing imports if the argument is over services? Well, services are imported and exported just like goods. So, let's understand the real numbers, here:

The United States had a $64.8 billion trade (BEG ITAL) surplus in services in 2002, despite economic stagnation in Europe and Japan. Services accounted for 30 percent of all U.S. exports and 43 percent ($3.1 billion) of U.S. exports to India. Full Article Here

But, if half of our exports to India are in the form of services why are so many technical jobs going to India? Actually, there's no real evidence that's happening at all. There are two basic erroneous arguments made by the media today supporting the assumptions in this question. First, is the post hoc mistake: because the US economy is losing jobs and because after that happened India started gaining technology jobs, then India must be responsible for losses in American technology jobs. Actually, poor investments by venture capitalists and fund managers caused the loss in US jobs. The fact those losses occured coincidentally with India's technology boom is completely irrelevant.

Second, is the hasty generalization mistake: Bob Smith has just lost his job because his company opened a software development office in India, therefore all American technology jobs must be moving overseas. There just isn't enough evidence to support the generalization made by reporters. We may suspect that India is taking some portion of American jobs, but news reports by well-intentioned NPR and New York Times reporters aren't evidence that its hurting our economy.

All this panic and paranoia about jobs moving overseas doesn't even make sense when we consider the real economics of it. The "entire employment of the US" can't possibly be outsourced. Even if your argument wasn't a textbook example of the slippery slope fallacy, you'd still be wrong on an economic basis. If the USA loses a sufficient number of jobs, i.e. unemployment rises, the consumers will have less capital with which to buy foreign-made products. Domestic workers who are out of work will be willing to work for less, thus driving down the cost of locally made goods. When the cost of local goods and services drops below the cost of foreign made goods and services, then jobs will start to flow back into the USA. Adam Smith's invisible hand at work.

During the Clinton Administration monetary policy for the dollar kept our currency strong, which helped keep prices for foreign made consumer goods low. This was a good thing during that time because Asia and Europe were both in the midst of deep recessions and American consumer spending helped to bolster those economies through that trying time. The Bush Administration has since let the US Dollar sag in relation to other currencies. This has helped decrease the price of American goods and services abroad

--
"He wrested the world's whereabouts from the heavens And locked the secret in a pocketwatch." - Dava Sobel

Re:Free Trade helps everyone by sbma44 · 2004-03-01 05:21 · Score: 2, Insightful

Although IT jobs are currently undergoing what manufacturing went through in the 1990s, many more jobs will be created in the US as a result of the lower costs associated with outsourcing IT work. The jobs created at home will be higher paid too.

They really use the American manufacturing industry to support their claims? Last I checked steel was reeling, textiles were dead, auto manufacturing had been reduced to a self-supporting welfare state and chip fab was happening in Asia.

You're right, some things get cheaper with truly open markets. So far those things seem to mostly be plastic trinkets at WalMart. The cost of education continues to outpace inflation, healthcare costs are spiralling out of control and the housing and real estate markets are heavily overvalued, at least in my part of the country. Bargain-basement cars may be marginally cheaper, and of course electronics always get less expensive, but those are the only two durable goods I can think of that have become significantly less expensive.

Re:Please think it through by Doc+Ruby · 2004-03-01 05:22 · Score: 3, Insightful

Pick some other arbitrary date than the worst excesses of the 19th Century, which caused the Panic of 1895, which caused the antitrust movement, which caused the "Sherman Antitrust Act", which collapsed the emerging monopolies over the American labor industry. Thanks to those wars a century ago, America actually took over the world, instead of remaining a manufacturing satellite for the British and German technology (steel and chemical) industries. Now the lesson *you've* learned from that triumph is that we should undo our victory? If you're going to talk like that, better make sure you cash your checks from the oil industry, or get a real job, overseas.

--

--
make install -not war

Flaws of Comparative Advantage by Tablizer · 2004-03-01 05:23 · Score: 1, Insightful

The "law" of comparative advantage is risky because it encourages countries to put all their eggs in one basket. For example, if all the programming for US banks moves to India, what if India is nuked by Pakistan? Our banking system will be in disarray. Or what if all the nuts, bolts, and wires for our military equipment, trains, busses etc. come from China and we go to war with China over Taiwan or something? They can hold our economy hostage.

Space-probes carry redundant or extra instruments in case one fails. Countries should do the same. (In the economic case it is not really "redundant", just split up.)

We are becoming a nation that does not "do" or make anything real anymore. It is pushing us all into sales or marketing directly or indirectly.

It limits career options and puts us at risk. The dogma of comparative advantage tries to optimize a single variable, output, at the expense of many other important variables.

--
Table-ized A.I.

Re:Look, Chicken Little by CrazyTalk · 2004-03-01 05:25 · Score: 3, Insightful

And I submit to you that those not in the workforce are those that "gave up" on looking for work after being unemployed for so long. Wish I had a link handy, but this has been well documented. There may be 17 million more people working than 10 years ago, but the population of the US increased by about 40 million in that time (not sure how much the working age population increased, obviously a figure less than that)

What baseline? by $ASANY · 2004-03-01 05:27 · Score: 2, Insightful

This universal baseline of labor regulations and environmental laws is a complete myth, unless you somehow think that US law somehow is the international standard for commercial regulations. How about the EU? Are we somehow immoral because we don't have a 35 hour workweek, 6 weeks of paid vacation a year and their other variations from US law? If this argument is to hold any water, we should just re-write all US labor and environmental law to comply with EU law so we can improve our regulation to the level of this "baseline".

I doubt many of us would really be interested in this as the net effects would slash personal incomes by about 40% and double the unemployment rate. Every regulation diminishes the profitability that companies can achieve, and if you think impersonal corporations and "fat cats" are the only ones affected by this you're gravely mistaken. Those profits pay salaries and reward investors, and it's pretty well established that the only factor that actually positively impacts environmental quality is wealth.

When we push regulations here and abroad, we have to be conscious of the economic impact those regulations will have. In a bunch of cases you and I will think that the pain we'll have to collectively absorb is worth it, but it's silly to evaluate the merits of regulations without regard to the economic impacts. To try to foist these regulations on other countries so we don't feel the effects of our decisions as badly as we are right now seems morally repugnant. We made these choices, and we have to live with the consequences. Other nations aren't responsible for relieving any self-inflicted pain we may be suffering.

Right now unemployment is well below 6%, long considered the absolute lowest possible sustainable unemployment rate. Personal incomes are rising across the board, and the proportion of Americans who are investors has risen well above half from a tiny fraction as little as 30 years ago. We're experiencing economic success (even now) well beyond the wildest dreams of our parents and grandparents. I don't get all this dire talk about us becoming a nation of "burger flippers" and WalMart retail employees because of free trade when all the evidence seems to show that we're far better off than the generations that preceeded us.

Of course we can remedy this success by imposing additional regulations on our economy, making foreign producers even more efficient in comparison. Or we can start ramming regulatory "reform" down the throats of countries we trade with so they'll be less able to purchase the high-value goods we tend to produce in the U.S. We can accomplish a "level playing field" in the same way that communism did, by lowering the standard of living of everyone except a small selected elite to near poverty. Yeah, that's going to help us and our environment!

Sheesh.

Re:Please think it through by MAXOMENOS · 2004-03-01 05:32 · Score: 4, Insightful

The scenario you've described is not that likely to happen, for a simple reason and that is: India won't be cheap forever!

India is already starting to hemmorage jobs to China and Malaysia, which are cheaper.

Any way you cut it, the data all point to a race to the bottom.

--
Finding God in a Dog

Re:Please think it through by fnj · 2004-03-01 05:34 · Score: 4, Insightful

"our unemployment rate has been dropping steadily for the la[s]t 8 months"

1) That statistic offers no insight into how many former professionals or blue collar workers with good paying industrial jobs are now flipping burgers, cleaning rest rooms, or operating cash registers, having already forfeited their homes. Hey, a job is a job, right?

2) That statistic does not count those who are no longer interacting with the unemployment department because their benefits have run out, and they have despaired of ever finding suitable jobs again.

Outsourcing is dillution of the resource of... by 8400_RPM · 2004-03-01 05:34 · Score: 2, Insightful

Outsourcing is dillution of the resource of manpower. US Jobs feed by US employees = good times US Jobs feed by + US employees + India + China + ... = depression

Good points until........ by vwjeff · 2004-03-01 05:35 · Score: 3, Insightful

"This is a concept the young replublican, right wing, econ-nazis' need to learn to deal with..."

Your points were great until you had to start the name calling. Calling republicans nazis makes your credibility zero.

This is a concept the young democrat, left wing, econ-commies need to learn to deal with, or as Dlylan said these times will be a changin'. It's not so nice the other way around, is it?

Yes times can change. I don't know if you realize this but we live in a democracy. We elect our leaders. In about eight months you and I will have an opportunity to elect a new President. Our system is great however over half of the U.S's eligible voters don't vote. This fact angers me deeply. We take our system for granted and then complain.

Our GDP per capita is the highest in the world. Poverty as defined is the U.S. is nothing like it is in Africa where I lived for two years. I saw things that disturb me to this day. At least in this country you won't die if you are unemployed.

Enough of my ranting and raving. Sorry for trolling and flaming but after living in what seemed as hell for two years and experiencing a truly corupt government it makes me upset when someone attacks a group of people whom they don't agree with. Instead of attacking debate them.

Doesn't seem to make sense by evan1l38 · 2004-03-01 05:37 · Score: 4, Insightful

He says that indian companies are buying computers and that this is a net gain of sales.

However, if the call center was in the US, the US company handling it would still have to buy computers, software, drinks, etc. I don't see how an Indian company buying these instead of an American company really makes any difference to the bottom line of the selling companies. He is claiming that these sales would not have been made, but the call center would HAVE to buy what it needs to run no matter if it's American or Indian. So his entire basic premise seems to be wrong.

--

Evan Reynolds evanthx@hotmail.com
Two peanuts crossed the street. One was assaulted.

Re:Look, Chicken Little by The+Grey+Mouser · 2004-03-01 05:37 · Score: 4, Insightful

Let's look at some Dept of Labor statistics, shall we? You can find them just like I did (given 5 minutes and an annoying Liberal cry-baby to spank).

Here's a hint, look under Employment Situation:
Jan 94: 121,971,000 employed. 65,286,000 not in workforce.
Jan 04: 138,566,000 employed. 75,298,000 not in workforce.

"Liberal cry-baby" ad hominem aside, it is of course the ratio of these numbers that we are interested in, not the absolute figures. By your measure, China and India have the strongest employment figures, because they have hundreds of millions more people working! The drop between the '94 and '04 figures you quote is a few tenths of a percent. No impending doom, to be sure, but hardly cause for celebration, or triumphalist chest-beating, come to that.

While there are significantly more people not in the workforce, I submit to you that most of those are retired! (baby boomers getting older, that sort of thing)

While that's partly true, most of the uptake in the "not in workforce" category is due to the increasing number of folks who are unemployed and have given up looking for work. Actually, this is discussed explicitly in the text of the report whose numbers you cite, so I presume you have read it. Anyone who had not actively looked for employment in the four weeks preceding the survey were counted as out of the workforce, but no longer considered technically unemployed either...

This is a concept the young liberalcrat, left wing, econ-morons need to deal with, or they'll get left behind

That's not much of an argument.

Mouser

An added benefit to globalization by Anonymous Coward · 2004-03-01 05:37 · Score: 1, Insightful

... economic equilibrium.

Don't forget that globalization (what outsourcing is a part of) theoretically results in economic equilibrium.

This means the standard of living in the US absolutely must go down, as the living standards in India and other countries rises, if true globalization is achieved. Don't forget to add that to your rosy outlook. Sure looks rosier to India and other nearly third world countries, than it does for the U.S.

As one country gains, others must lose.

I am not saying this is either good, nor bad. That is up to a given individual's opinion. I am merely stating the economic theory as I remember it from macro economics (16 years ago?) My memory might be fuzzy.

l8,
AC

Look at it the other way around by Aceticon · 2004-03-01 05:38 · Score: 4, Insightful

How much does one (in average) need to have invested in order to make as much money per year as if having a job?

Assume the following:

Average yearly growth trend on a properly diversified portfolio of stocks is 6% (i believe the NYSE 5 average year growth trend is about 5.4%)
Once a year, enough stocks are sold to get in cash the yearly profits
Sales taxes on stocks are not taken in account

If one aims at a bruto salary of $60000 year, that's 60000 / 0.6 = $1000000 (1 Million bucks )

If the taxes are the same on income and over selling of shares, it results in the same netto income.

So, you have to be a millionair already in order to earn from you stock portfolio the equivalent to a $60000 year salary.

And that's not even taking the higher risk in the stock portfolio into account (let's just say that you would party during half of the 90s and starve during half of the 00s)

Amoral Free Trade Hurts Everyone by goodviking · 2004-03-01 05:41 · Score: 2, Insightful

Bottom line: If you make stuff cheaper, society as a whole benefits. Yes there are painful individual cases where people lose their jobs, but because the house is so much cheaper, they don't have to work huge hours to buy a house when they do get a new job.

I understand the argument, but I think that it leaves out a crucial point. If the standard of living and cultural values were everywhere equal, then there are no implications to buying the cheapest global labor to get a task completed. However, if you are searching for the lowest cost of production, independent of it's source, you are tacitly approving and supporting a set of cultural values that you may not agree with. This is how you wind up with major corporations supplying rugs and apparel produced in sweat shops by children. If markets are amoral, and price is the only driver, then why not use slave labor? Definitely a cost reduction.

Ultimately, there is an implicit "import" for every "export". The import is a set of cultural values. For every imported good you buy, you are supporting the values and objectives of that society. Further, if you don't factor this value based cost into your decissions, then ultimately you are importing the another cultures values as it represents the lifestyle you will have to adopt to compete.

Re:Amoral Free Trade Hurts Everyone by fiannaFailMan · 2004-03-01 06:20 · Score: 4, Insightful

This is how you wind up with major corporations supplying rugs and apparel produced in sweat shops by children
It depends on your definition of 'sweatshop.' The Economist did an extensive survey on globalisation several years ago and found that multinationals setting up shop in the developing world have the effect of driving wages up rather than down. What people like the anti-globalisation protestors don't get is that comparing western wages and working conditions to those in the developing world is a fallacy. It's when you compare the conditions of workers in a new multinational-owned facility to those already there, you get a more favourable comparison. Just because working people in Lima don't commute in brand-new Ford Mondeos does not mean that they are 'poor' or being 'exploited.'
If markets are amoral, and price is the only driver, then why not use slave labor? Definitely a cost reduction
At the risk of going slightly off topic, slave labour was never a very efficient means of production and not necessarily a cost reduction. Motivating the workers could only be done using brute force, which is far less effective than the incentives that motivate a free person with a mortgage to pay or a family to support. I have my doubts that productivity was up to scratch. Owning slaves may seem cheap, but bear in mind that there was a Total Cost of Ownership. Slave-owners still had to house and feed their workers. Was that any cheaper in the long run?
I do agree that standards of working conditions should be part of any trade deal though.

--
Drill baby drill - on Mars
Re:Amoral Free Trade Hurts Everyone by Baki · 2004-03-01 10:12 · Score: 2, Insightful

Point is that in India slave labor kind of exists: child labor is widespread, and people of lower castes accept underpaid jobs as a fact of life.

While these 'slaves' are not the ones directly replacing western jobs, they do enable very low cost of living for the people who do, thus enabling them to work for much less as we (in the west) have to.

We can only compete if we do import the same culture, i.e. import a kind of slave labor enabling our white collar workers to accept 30% of todays wages and still have a decent life. Do we really want that to happen?

Japan was a similar problem, however due to the much smaller population we were able to absorb that shock more or less. Japanese, by culture, are prepared to work 6 days a week 10 hours a day or more, and live on 5 sq.meter a person. We cannot and will not compete with such a culture, therefore we do need some means of isolation from it.

1970s manufacturing was similar, but... by drwho · 2004-03-01 05:42 · Score: 2, Insightful

1970s manufacturing was similar, but, this doesn't support the argument that outsourcing is good. since the 1970s, vast portions of the US have been reduced to poverty as the jobs left...the "rust belt"..rural new england...even sunny california have all had their livelyhoods destroyed by the export of manufacturing jobs. The places that prospered were the place swith industries that could not be exported: Silicon Valley..Route 128..new york city..los angeles jobs in technology, medecine, finance, media. Is the south, manufacturing survived due the lax laws on ecology and workers' rights. What did american consumer get as workers' lost so much? well, TVs can be bought for $29 new (but forget about having them repaired). Do you really need a new tv every year? more cheap plastic junk, except that in the past ten years it is now being made in China instead of Japan. The U.S. manufacturing economy gave birth to the service (repair) economy, where TV repair, auto repair, vacuum cleaner repair, maytag repairman, etc were fixtures of small town markets along with the retailers. Now, it's cheaper to buy a new tv than repair and old one, and so there are no more repair shops. Wal-Mart has destroyed the local retailers, so they're reduced in number as well. Soon, there will be one or two banks in the US, one or two major retailers (walmart and who?), and one or two major jobs (head of major corporation, sell-out academics and economists) and a system with less wealth distribution than royal france.

We have away our manufacturing jobs witht he promise that high-paying tech jobs would be the replacement, in a world economy that we would come out on top. We haven't. Let's not give away the programming jobs as well. And then, let's take back manufacturing.
We

Cost of Living is USA's downfall... by foniksonik · 2004-03-01 06:04 · Score: 3, Insightful

It's not enough to know that jobs are moving over seas, you need to know why.

The simplest answer is that it is cheaper to hire people in (India), labor cost less. Materials cost nearly the same, transportation costs nearly the same, time runs at the same speed. Labor.

Why is labor cheaper in 2nd-3rd tier economies? Cost of living is cheaper. Why is cost of living cheaper? Imports cost the same, travel, utilities, products cost nearly the same barring local production costs being cheaper. What is the biggest expense month to month and year to year for anyone in the world?

Housing. Rent, Mortgage, Real Estate, Property. What can't be exported or imported? Housing and Land.

Home prices and in parallel rental expenses have been going up 12% - 24% year over year in all regions of the USA for at least a decade. What is the annual cost of living inflation rate or even the average annual wage increase? More along the lines of 3% - 8% annually. Compound this over ten years and you can see that housing expenses have become the number one increase in cost of living throughout this America.

How is this possible? People still 'buy' homes right? People still rent apartments? Yes and No. More people are renting than ever before. Homes are being mortgaged using 30 to 60 year payment plans. Nobody who has 'bought' a home in the last ten years, excepting the very wealthy, will even come close to owning their home in the next ten years. As mortgage rates go up cost of living goes up, as mortgage rates go up, comparable rental rates go up... they are directly manipulated to equal local mortgage rates.

We are a nation of debtors whose income barely equals our expenses and often does not meet it. Out of control real estate values are bankrupting our nation. The average home where I live is priced at $420,000... average, meaning 3 bedrooms, 2 baths, small yard, 1.5 car garage, built in the 1980s over 20 years old. It is worth barely half of that, most likely less.

People are still buying because the banks and credit companies let them... which encourages the value of real estate to continue increasing well beyond any reasonable expectations of anyone to pay for it and still save for retirement or for the childrens college funds. This means they have to borrow even more to pay for the 'cheap' imported products so they can save their cash for old age. Insanity.

Now real estate isn't to blame... they are simply following market forces, "what the market will bear". The problem is that the market can't really bear it without creating enormous amounts of debt to finance everything. We are spending money which won't be realized as real value for 30 to 60 years. This is billions if not trillions of dollars I'm talking about. The federal deficit is nothing compared with the amount of consumer debt which is building up quietly behind the scenes with no one watching or assuming accountability.

The worst part is that we can no longer afford to compete with the rest of the world because property holders and credit companies are holding our paychecks hostage for the rest of our lives. We are paying so much for the right to have our basic housing needs met that we can't afford to take a pay cut. Not if we want to live where there is work to be done.

Look into this. It's much scarier than I've let on.

c ya. Got to go pay the rent.

--
A fool throws a stone into a well and a thousand sages can not remove it.

Re:Please think it through by cayenne8 · 2004-03-01 06:16 · Score: 2, Insightful

"But, if half of our exports to India are in the form of services why are so many technical jobs going to India? Actually, there's no real evidence that's happening at all."

Well...I'd say the actual closings of shops here by companies...and having the last thing the US employees do is to train their indian counterparts for the new shop opening up over there...is a pretty good bit of evidence.

--
Light travels faster than sound. This is why some people appear bright until you hear them speak.........

What a load of rubish. by jotaeleemeese · 2004-03-01 06:23 · Score: 2, Insightful

The closer you get to retirement the more of your investments should move to safer alternatives like bonds and cash.

If you reach retirement age and all or most of your portfolio is in the stockmarket you deserve every bit of bad luck you may get.

People that made their homework or got their fat arses to the office of a good financial adviser did not have any problems because if they were on the age of retirement they were not exposed, if they were young they were on this for the long term which so far has proven more redituable.

If you were especulating, you knew the risks: suck it up and bag it as experience (i.e. you were 35 and all your savings were in a single company that happened to be a dot.bomb).

In any case the former scheme in which working people payed for the pensions of old people does not wor anymore because pensioners will outnumber working people in the near future. People with far left political inclinations have yet to explain how we are going to pay for pensions if people are not forced to take care for themselves.

The only solution is people taking care of their own pension arrangements.

If people do not take any interest on their finances they deserve to struggle. It is not black magic, it is basic arithmetic, a bit of understanding compound interest (hardly rocket science) and a basic understanding of why some investments are riskier than others.

It is not like there is no information out there, the Economist or the Financial Times are cheap (stop smoking, that is enough to buy these or other fine publications). Thanks to them I have feared pretty well, forseeing things like the Euro appreciation and the dollar devaluation and managing no too bad during the dot.bomb (hint: I had my eggs in many baskets, not only IT ones).

I am not an economist, but for goodness sakes, encourage people to take responsibility and learn about how to handle their own money.

--
IANAL but write like a drunk one.

Net gain in jobs, just not your job by Anonymous Coward · 2004-03-01 06:27 · Score: 2, Insightful

The issue is that the jobs for americans are shifting. Straight coding and IT jobs are now seeing a pinch forcing Americans into project management, software architect, systems engineer (sales), and technical marketing jobs. This isn't necessarily a bad thing in the long run, but its pretty difficult for someone who has already started their career and has no desire/no training in those disciplines. As for those of us who are still in CS programs, I just really hope the top engineering schools start to realize CS graduates will be needing more skills than C++ and calculus. I think I heard of a combined undergrad in CS and business at uPenn. Thats a nice start. I know my school it gonna get kicked in the ass on this one, they have their head way too up their research *ss to see what is going on in the real world.

This is NOT free trade by Wansu · 2004-03-01 06:31 · Score: 2, Insightful

This is a mixed economy with all sorts of government intervention being exerted by all sorts of goverments. Calling this free trade is wrong.

I came across a columnist with an unconventional view, Paul Craig Roberts. In his June 18, 2002 column, titled, Importing people, exporting jobs, he points out the following:

"It is a mistake to see the loss of jobs and income as the workings of free trade. The downward pressure on incomes does not result from an exchange of goods. Something different is occurring. Middle class incomes are being traded away in order to gain larger bonuses for top management, and politicians are pandering to the immigrant vote at the expense of lower income native-born citizens.

The longer this process continues, the more explosive it becomes, both socially and politically."

I don't think I can say it any better. Like Paul Craig Roberts, I believe the US is heading for 3rd world status.

--
Wansu, th' chinese sailor

Free trade, outsourcing, customer service by Guru1 · 2004-03-01 06:34 · Score: 2, Insightful

While I like free trade, couple things bother me. 1. I just cancelled my pretty expensive static IP dsl line from Ameritech that I've had for 3 years because I just spent 12 hours straight talking to customer service to go through a pretty simple issue. Main problems: They couldn't speak English and followed scripts far too much. While people in the US still follow scripts, not speaking much english on phone customer support is not acceptable. 2. I have a problem with cheap products being sent from countries that have no environmental rules to speak of. They can dump their waste into the ocean that washes up on our beaches eventually, but if we have purely free trade, their goods will simply cost less.. there need to be some limits put in place to regulate countries that harm others. Beat your own workers, but don't dump in my ocean or pollute the air I breath.

Re:Please think it through by dten · 2004-03-01 06:36 · Score: 3, Insightful

Domestic workers who are out of work will be willing to work for less, thus driving down the cost of locally made goods. When the cost of local goods and services drops below the cost of foreign made goods and services, then jobs will start to flow back into the USA.

And when the average quality of life for American citizens drops until it equals that of other developing nations, we'll finally be able to compete toe-to-toe with their cheap labor. And when everything in the world becomes a commodity -- where do we go from there?

You're talking about lowest-common-denominator economics. While it makes sense from an objective, global perspective, from a subjective, local perspective, it sucks goat nads, and we're entitled to a little bitching.

Re:Please think it through by arn@lesto · 2004-03-01 06:46 · Score: 3, Insightful

These figures only refer to the number of people that are collecting unemployment benifits. They stop after six months and people no longer count in this number but they are still unemployed.

A better number to look at is the total number of tax receipts recieved from employed people, that number is also dropping indicating that less people are working. The government publishes this number but rarely points it out at press conferences.

The USA job market is shrinking... during a recovery. No, it's not lots of people retiring and living the good life.

--
- AndrewN

Re:Free Trade helps everyone by teorth · 2004-03-01 06:47 · Score: 3, Insightful

They really use the American manufacturing industry to support their claims? Last I checked steel was reeling, textiles were dead, auto manufacturing had been reduced to a self-supporting welfare state and chip fab was happening in Asia.

While it is true that employment in these industries has declined dramatically, it's not really true that the industries themselves are in trouble. American steel output, for instance, has been stable or generally increasing in the last thirty years. What's really happened is that technological improvements have made the production of steel much more efficient; for instance, a steel worker in 1987 could make 472 tons of steel a year, while in 1997 the same worker could make 947 tons of steel a year. Modern steel mini-mills are actually thriving; it is the old steel firms who have to deal with the leacy of massive pension costs from the days when they had to hire many times more workers than they need to today who are in trouble. The situation is much the same for autos and textiles; it is the transition from low productivity technology to high productivity technology, not so much competiton from imports, which is causing the bulk of the dislocation.

You're right, some things get cheaper with truly open markets. So far those things seem to mostly be plastic trinkets at WalMart. The cost of education continues to outpace inflation, healthcare costs are spiralling out of control and the housing and real estate markets are heavily overvalued, at least in my part of the country. Bargain-basement cars may be marginally cheaper, and of course electronics always get less expensive, but those are the only two durable goods I can think of that have become significantly less expensive.

Strangely enough, health care, education, and real estate are the components of our economy which are NOT generally outsourced overseas. Connect the dots yourself...

Terry

Re:Social Security DID NOT FAIL by EastCoastSurfer · 2004-03-01 07:01 · Score: 2, Insightful

Social Security was a success.

Maybe then, but it won't be in the future. Social security has always been a transfer program of money from the young and working to the older non-working people. This works great in the baby-boom years when there are lots of working people and less older people, but now the young working people are turning into the older non-working and there just isn't enough working people to sustain them.

Re:Please think it through by GOD_ALMIGHTY · 2004-03-01 07:03 · Score: 2, Insightful

Let's not forget that jobs are being created for this recession, but in India and Asia, rather than the US. EDS announced it was hiring 11,000 tech workers in India this year and 3Com is hiring 1000 in China. Read it here.

This is nothing more than a desperate attempt to find growth in mature industries. They are doing this simply in order to drive labor costs down. There is no innovation happening here. In fact, this whole fiasco will likely result in slowing innovation since it needs margins to happen. When this country has no margins or middle class left we'll see innovation taken over by India or China who have worried more about the welfare of their citizens than adherence to free market ideology.

--
Arrogance is Confidence which lacks integrity. -- me

Re:Please think it through by br00tus · 2004-03-01 07:27 · Score: 2, Insightful

All this panic and paranoia about jobs moving overseas doesn't even make sense when we consider the real economics of it. The "entire employment of the US" can't possibly be outsourced. Even if your argument wasn't a textbook example of the slippery slope fallacy [datanation.com], you'd still be wrong on an economic basis. If the USA loses a sufficient number of jobs, i.e. unemployment rises, the consumers will have less capital with which to buy foreign-made products. Domestic workers who are out of work will be willing to work for less, thus driving down the cost of locally made goods. When the cost of local goods and services drops below the cost of foreign made goods and services, then jobs will start to flow back into the USA. Adam Smith's invisible hand at work.

"Domestic workers who are out of work will be willing to work for less" - so this is what you're trying to sell us with. Hey, don't worry about unemployment being high, it's going to be falling soon along with your wages!

Adam Smith's hand is only invisible to those so transfixed with the point where commodities are exchanged that they can not see the production processes that created those commodities and the relations behind them. Besides, half of the theories of Smith and the other classical economists have been thrown out by modern economists since Smith and his cohorts were a lot more honest about what was going on then the economists employed by institutions nowadays. As Smith once said- "But what all the violence of the feudal institutions could never have effected, the silent and insensible operation of foreign commerce and manufactures gradually brought about. These gradually furnished the great proprietors with something for which they could exchange the whole surplus produce of their lands, and which they could consume themselves without sharing it either with tenants or retainers. All for ourselves and nothing for other people seems, in every age of the world, to have been the vile maxim of the masters of mankind. As soon, therefore, as they could find a method of consuming the whole value of their rents themselves, they had no disposition to share them with any other persons."

Re:Please think it through by Rob+Y. · 2004-03-01 07:28 · Score: 5, Insightful

> The scenario you've described is not that likely to happen, for a simple reason and that is: India won't be cheap forever! The Indian programmers will eventually start demanding better healthcare, education for the kids etc.

Yes, but India may well be cheap for a very long time. And then there's China. The point is that the potential pool of underemployed labor in the 3rd world is huge,. This pain's going to go on for quite some time before any equilibrium is reached.

>The problem you're facing is to decide between being selfish and saying "all high paid jobs belong to us".

Who said those jobs are "high paid"? Maybe they were reasonably high paid in the US, but these jobs are going to India specifically because they are not high paid there. Just because they're better for Indians than the alternatives doesn't make them high paid. And if Indian pay gets too high, that's when the jobs go to China.

It would seem reasonable to at least attempt to establish a minimum global standard of living to mitigate the race to the bottom. Otherwise, outsourcing becomes slave labor by another name (no health benefits, no job security, no wage leverage). How much difference does it make that the slaves' choices are so limited that they are willing slaves.

--
Posted from my Android phone. Oh, I can change this? There, that's better...

Re:Social Security DID NOT FAIL by Anonymous Coward · 2004-03-01 07:35 · Score: 1, Insightful

How much additional or extra tax did you pay in last 10 years to assist in this endeavor to pay off the IOU's? how much are you going to pay this year?

i thought so.

Good God: DO NOT TRAIN YOUR REPLACEMENTS!!! by mosel-saar-ruwer · 2004-03-01 08:42 · Score: 1, Insightful

Well...I'd say the actual closings of shops here by companies...and having the last thing the US employees do is to train their indian counterparts for the new shop opening up over there...is a pretty good bit of evidence. Light travels faster than sound. This is why some people appear bright until you hear them speak.........

For that sake of all that is Holy: DO NOT TRAIN YOUR REPLACEMENTS!!!

Who do you people think you are? Slaves? You certainly have the mentality of slaves ["employment" being a polite euphemism for "slavery," "employee" a polite euphemism for "slave"].

Do not train your replacements. Do not document your code. When the rat-bastards outsource your job, tell them to go to straight to Hell.

And tell them to take their two-week severance pay and shove it up their asses.

Re:India == new market by Mr.+Underbridge · 2004-03-01 08:56 · Score: 2, Insightful

but which are manufactured in Mexico and China anyhow. Oh, and while we're at it, that premium service sector is rapidly being outsourced to India and the Philippines. Your best bet to make it in America is to be born wealthy, otherwise move to the new land of opportunity, the middle orient!

If the parts are manufactured in Mexico and assembled in the US by skilled workers, so what? by the way, that's what Apple does.

The bottom line is that none of the doom and gloom you people are predicting has ever come true, and outsourcing of jobs (or mechanization of jobs) has always happened. In other words, the links to these arguments are non-unique, and the impacts therefore moot.

Re:Free Trade helps everyone by jcr · 2004-03-01 10:02 · Score: 2, Insightful

20,000 Sugar Growers get subsidies worth more than the entire US budget for Foreign Aid. ..and that's just one of the symptoms of 1) full-time legislators who trade favors for votes, and 2) using taxation as an instrument of policy.

Like most other programs that pillage the treasury and the taxpayers for a special interest, this one keeps going on because the benefit is concentrated, while the burden is diffuse.

I probably only lose a few bucks a month to the economic distortion caused by this subsidy, but the sugar growers' entire living depends on this looting. The upshot is that they'll fight tooth and nail to keep the subsidy, but not many people will bother to fight against it.

-jcr

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The only title of honor that a tyrant can grant is "Enemy of the State."

So, what about South Carolina by benwaggoner · 2004-03-01 10:33 · Score: 5, Insightful

People are always threatened by free trade, since the benefits are diffuse, but the pain concentrated.

So, here's a thought experiment:

Explain why you think outsourcing to India is bad, or evil, or should be illegal.

And then explain why the same isn't true of outsourcing to say, South Carolina.

South Carolina has lower environmental and labor standards that the rest of the us. Lower wages.

You really want every state to make their own cars? Furniture? Grow their own oranges? Wouldn't that make more jobs everywhere.

In fact, couldn't we cure suburban blight by preventing cities from importing products from their suburbs?

Now, how is that a better alternative?

And how's that meaningfully different than what's happening in India.

And yes, I am a liberal Democrat who works in the technology industry. The job that might get exported is my own. But I've also worked on a job where engineering was in India, and product management was in the US. That particular product was something that wouldn't have been worth doing at US labor rates. In many cases, this isn't a matter of exporting jobs, but creating jobs that didn't exist before, or couldn't have had as much labor behind them.

Another way to think of it: How much extra are you willing to spend on products in order to have them done in the USA. Are you willing to have your support contracts 4x higher to have an American answer them. Are you willing to pay 4x more for clothes? $400 Nikes?

Me neither.

Moreso, I'd rather have Africa get richer exporting food, Pakistan richer exporting clothes, and then get to pay even less for those goods. Ever wonder how much each of us is paying in tax dollars per American farmer?

Note that, if your income stays still, and you pay twice as much for everything, you just had a 50% pay cut. Anyone think outsourcing would get as bad as that? Nope.

As David Ricardo proved a couple of centuries ago, the strongest economy is one where everyone does what they're best at. Trying to pick winners and losers just drags everyone down.

The problem with our economy today isn't outsourcing and free trade. It's the most bolluxed up, politicized, fundamentally ignorant economics team in the history of the country. I would have been hard pressed to find a way to have spent MORE money with LESS economic stimulus than the the Bush economic "plan."

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Re:Statistics Say you are a fool. by Anonymous Coward · 2004-03-01 14:47 · Score: 1, Insightful

Just a guess, but I would think that the increasing numbers of women participating in the workforce would explain the upward trend in this statistic since the 60s.

the solution to free trade... by phossie · 2004-03-01 15:02 · Score: 2, Insightful

...is actual free trade. what we have now is a mockery of a free market, where the most powerful proponents of free trade are hoarding all sorts of leveraged trade agreements with the back hand. what we really need to do is make it tougher to have it both ways.

don't assume, of course, that i'm all for free trade. but i really wish the folks publicly gunning for it would be honest about what they're really doing.

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