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What Should a Documentary Filmmaker Ask About Offshoring?
Philadelphia-area development economics and finance student Rachel Anderika and her associate, programmer/filmmaker Krishnan, are making a documentary about the effects of offshore outsourcing. Their "still under construction" Web site, Project Outsourced, gives you more information about their work. They're interviewing economists, bankers, anti-outsourcing advocacy groups, pro-outsourcing CEOs, columnists, and others. Where you come in is helping Rachel and Krishnan come up with good questions to ask. We'll forward 10 - 15 of the highest-moderated ones posted here (within the next 24 hours) to them. Expect summaries (and possibly audio or video clips) of the answers in late May, and news about the finished film this Fall.
A documentary is important and I would fully support one being created (Disclaimer: my first major in college was documentary film), but perhaps more importantly, that documentary would be made much stronger if it would include some hard numbers and studies including rigorous statistics on just how offshoring is helping (or hurting) the 1) corporation, 2) worker, 3) consumer. Perhaps not just the viewpoint in the US as an interesting perspective could be made from the person getting the job.
So, here is the deal: Documentaries are often about perspective but ideally, they are about finding the truth and revealing that truth to your viewer. Political perspectives are going to be difficult to get, but contact someone like Robert Reich who could place you in touch with a variety of folks in and out of the political scene.
bob@RobertReich.org
Robert Reich
P.O. Box 381483
Cambridge, MA 02238
(617) 547-2206
Fax: (617) 498-0048
Visit Jonesblog and say hello.
What sort of responsibility to create jobs should a company have to the nation that purchases/has a demand for the goods they're producing?
Ask the arguments of the other side as questions.
For example, ask the anti-outsourcing advocates what the cost in non-visible jobs is by engaging in protectionism of the highly visible tech jobs lost to outsourcing.
Then ask the pro-outsourcing folks a question like how will the economy absorb the displaced workers resulting from outsourcing.
This will make each side actually defend their position instead of using you as a sounding platform for their agenda.
You can tell a great deal about the character of a man by observing those who hate him.
As an informed, identity-paranoid IT person:
How will my SSN and other personal information be secured from workers who have zero responsibility to secure it, from a legal perspective?
Ask them this, "Why aren't high level executive jobs outsourced?"
Note: I would not put much stock in the CNN list when it comes to VA. I'm not saying that they DON'T outsource, but VA bought machines that were assembled overseas to re-sell in the US, and that's not quite the same thing, IMHO, as laying someone off in order to send their work overseas.
Now, if VA is *currently* sending work overseas, I'd be interested in hearing about it from the horse's mouth... horse?
Not only that, American labor (non-union, at least) is actually cheaper than Japanese labor.
The problem, the way I see it, is that there's a difference between first-world countries (Europe, Japan, US) trading with each other, and us trading with third-world countries.
If we buy Japanese or European products, we can feel safe that we're buying from companies that compete on a level playing field with our own: the cost of living is roughly comparable, and environmental and labor laws are fairly similar. Companies in Japan or Europe aren't able to lower their prices by simply hiring sweatshop workers or dumping toxins in the nearest river; they have to do things properly and keep themselves efficient.
But when stuff gets outsourced to third-world countries, these protections are absent, which allows companies there to keep their costs extremely low. How can an American manufacturer compete against one that can pay their workers pennies a day, and dump their waste wherever they please?
Think about it, even reporters, lawyers and medical work is being outsourced to other countries.
Which is why we should tariff the import of intellectual property. Businesses want their intellectual property protected just as if it were actual physical property (DMCA, copyright law, patent law, etc), but they import intellectual property in the form of code, legal advice, chemical formulas, genetics research, etc, into the country without paying any value-based tariff.
Either it's property or it isn't. If it is, keep your copyright and patent laws, and pay up when you bring this property into the United States just as you would if you brought a truck load of goods. If it isn't, then say goodbye to its legal protection, and finally say hello to inexpensive AIDS medication, "legal" pirate operations for CD and DVD sales, etc.
MORTAR COMBAT!
All ivory tower economist fantasies.
The real issue is gross domestic salary. Is the buying power of American consumers at large at least remaining steady or is it in rapid decline?
What is the social impact of retraining highly experienced specialists that may have spent 10 or 20 years developing their skills? What is the economic impact when those people suddenly can't continue the level of consumption they had previously?
What do we do when the tradesmen and laborers that those professionals allowed to be employed are also on the unemployment line?
A Pirate and a Puritan look the same on a balance sheet.
1. CEO's tend to make the argument that they need to outsource in order to compete with their competitors who are outsourcing. (sounds an awful lot like an argument between kids on the playground - "he's doing it too!" - where nobody wants to take responsibility). Given that CEO salaries run into the $millions (typically 20 to 40X the pay of their average employees) why don't CEOs consider cutting their own salaries in an effort to remain competitive?
2. Many unemployed and about-to-be-unemployed US engineers would be happy to work for less money (within reason)in order to keep their jobs, however when this is suggested to companies the companies usually choose to go with outsourcing. If an engineer is willing to take a 30 - 40% pay cut to save his/her job, why isn't this offer taken seriously by most companies?
3. (related to 2) It's quite clear that if we want to continue working in the engineering fields in America that we'll either have to become much more productive (2 - 3X) or we'll have to accept much lower wages (or a combination of the two). By some measurements we're already much more productive than our overseas counterparts by virtue of the fact that we have more experience with real projects, so it all comes down to money. What can American engineers do to lower their cost of living in order to try to compete with 3rd world salaries?
4. Most offshoring advocates say that we need to just be patient as we await the 'Next big thing (TM)' that will be invented in America (they have a lot of faith). Any idea what the 'Next bit thing' will be and what do we do in the meantime?
5. (related to 4) In the software arena, most of the offshoring advocates say that US developers need to 'move up the foodchain' into project management. Given that you never need anywhere near as many managers as you do managees, what how will most US developers 'move up the food chain'? (perhaps they'll become hunters)
6. (related to 5) What if you'd much rather develop code than manage projects?
7. For outsourcing advocates: Why not make the argument that we should outsource every possible US job to cheaper, lower labor-cost countries and then bring in 'guest-workers' to fill the positions that can't practically be outsourced? It seems that the outsourcing advocates would find this a favorable plan since there would be so much potential money savings. If money savings is the primary economic motivator then this seems like a logical plan, however, what do we do with the millions of US workers that would be put out of work in this scenario?
Commentary: The outsourcing advocates take a very narrow view of economics. To them cost-cutting is the primary motivation for doing anything - "if it'll save a buck, then do it" is their motto. However, it isn't clear that the money savings from outsourcing white collar jobs are actually going to be able to counter-ballance the economic devestation brought on by widespread offshoring. So what if US corporations suddenly become wildly profitable (for a quarter or two) while millions of workers are put out of work. Eventually those millions of unemployed workers won't have the money to buy the products of the wildly profitable corporations and profits will go down. I'd rather see corporations break even while providing good jobs to millions, than see them be wildly profitable but providing no jobs to US workers. Oh, and if millions are unemployed, who is going to pay the taxes to support the schools that we supposedly need to train workers for the 'jobs of the future'?
I'm wondering then, where the problem begins.
So if VA were to start off assembling computers themselves, decide they can't compete financially with companies that are buying assembled computers from Taiwan, so they close their assembly line and buy from Taiwan, then that's bad.
However, if they never employed anyone to assemble computers in the U.S. at all, then that's OK?
How about this: they keep assembling computers in the U.S., and go out of business because everyone is buying from vendors who "outsourced" to Taiwan?
Stupid sexy Flanders.
Question 1: Retrain in what? Will the new jobs created by trading our jobs with India be created here?
During the 1980s, blue-collar manufacturing workers whose jobs were offshored were told to retrain in some other area, particularly knowledge jobs. Some did, most others moved into other blue-collar jobs such as construction, automobile repair, and other such jobs which aren't so easily offshorable.
Today, the message from economists and CEOs is the same: retrain in some other field. We know that jobs in programming, software-engineering, and most other fields of engineering (electrical, mechanical, chemical, etc.) are being offshored.
So what exactly does one retrain in? Let's look at the options:
* Biotech -- is there any reason that new biotech jobs can't be created overseas instead?
* Nanotech -- is there any reason that new nanotech jobs can't be created overseas instead?
* Medicine -- oooh, wait, radiology is already being offshored, and so are surgical jobs
Note that those are all technology-oriented jobs which do not require one's presence. What technology-oriented jobs require one's presence then?
* Auto mechanic -- for the few geeks who can tolerate working outdoors, with their hands, getting dirty, etc.
* IT technician -- the basically blue-collar guys who schlep computers around, run cables, and replace bad hardware
* Nuclear engineer -- because It Is Stupid to not have people on-site to prevent a nuclear plant from going boom in the event of an emergency
So, can the hundreds of thousands of software geeks who have had their jobs offshored retrain to be auto mechanics? Even if they wanted to, I doubt they could, and as cars become increasingly-reliable, demand for those jobs will decrease. IT technicians? We have a glut of them as it is. Nuclear engineers? This nation is too scared of nuclear power (thanks to Chernobyl and Three-Mile Island) for there to be much of a market for nuclear power.
So, what do we do? Just what jobs are there beyond "knowledge" jobs? If you assume that international trade (and preferably free trade) is a good thing -- as I do, due to comparative advantage -- then you must admit that many of these jobs can go overseas now thanks to the Internet's ability to send data worldwide at dirt-cheap prices.
Now, the standard economist's response to that is that "new jobs will be created as a result of trade." On the face of things, this is true.
But return to the fact that the Internet makes all jobs which deal primarily with information (instead of people) offshorable. Given that fact, what reason is there that the new jobs -- which WILL be created, just as economists tell you -- won't be created overseas, but will be created here in America? Again, is there any reason the new jobs -- which we can reasonably expect to see in biotech and nanotech -- won't simply skip the step of being created in America and instead get created in India first?
I wrote an email to one of my economics professors asking that question (and many others) recently. His response? "Gee, you know that's what interests me about economics so much - why do these things happen?" But he never really answered the question.
If a college professor in Econ. doesn't know the answer, who does?
Question 2: Education.
Often the advice to unemployed IT geeks is to retrain. Retraining requires education. Education requires years of time and money.
Simple question: Where does an unemployed IT geek *get* that money to retrain with, given the rapidly-rising costs of a college education?
Moreover, how can America -- which largely does not subsidize post-secondary education -- compete with foreign nations which do subsidize post-secondary education?
So long as this educational barrier-
Is Capitalism Good for the Poor?