Slashdot Mirror
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.
V
Valence Technology
VA Software
Veritas
Verizon
Here is a list of companies that use outsourcing.
I am appalled the companies would shift labor to lower-cost locations. This practice should not be tolerated. Now excuse me as I will get into my Honda and drive to nearest Wal-Mart for that 2-for-1 sale on Nike shoes and shirts, can't miss a deal like that.
The one question I have never been able to get a straight answer on. What field should the millions of displaced American IT workers get trained in?
It is always sais that people should be responsbile and learn new skills and train in a new field. When the farm economy shifted to manufacturing, people learned factory work. When manufacturing started to be offshored people were advised to get into IT. What field should people start to train in? Bush talks about training displaced workers, but I haven't heard anything about what their supposed to train in. What is the next new economy, retail?
Geek jobs come under threat. Suddenly geeks lose libertarian leanings* and belatedly side with the ex-manufacturing workers who bullied them through High School
*For ENTIRELY unrelated reasons, obviously. No hypocrisy here at all
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?
Very simply, do overseas workers cause more problems than they create? When it comes to programming, coordinating projects between two centers in different facilities in a single country is hard enough. Adding culture and language differences to the mix while not being able to have direct and on-site meetings to architect a complex program, is that a recipe for disaster? With overseas call centers, do you keep enough future customers due to deficiencies in customer support to make it financially viable to continue offshoring support? How do you cooordinate high-level management objectives with an office across the world?
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.
when the "Cowboy Neal" option started being replaced with "Bhagavad Neal"!
(but who cares)
.. has the standard of living, for those working for American companies, increased at all? Or are the jobs just barely paying the bills like any other job might?
My question is
Africa doesn't have the education levels, yet. But when they do, we'll be there.
Slashdot "libertarians": Small government for me, big government for those I disagree with. -1, I disagree with you
Is outsourcing seen in the public eye as helping or destroying an economy? I mean, on the one hand, we're loosing jobs locally, but on the other hand it's creating thousands of jobs in 3rd world countries. I heard someone say before every one job here is worth three jobs offshore, for the same amount of money. I guess the question is, are companies benefiting by getting more bang for the buck out of employees helping the economy locally, if not the job market, while at the same time helping the economies of other countries by creating jobs? A penny saved is a penny earned, potentially spent locally.
Seriously.
I am so sick of people whining "outsourcing sent my job to India" then walking out the door to climb into their Toyota. I'm sorry that your job has been outsourced, I am. But don't you realize that your decisions sent others to the same fate--where was your sense of moral outrage then?
What effect do you feel the outsourcing of professional jobs has on the economy? When manufacturing moves offshore, it's easy to say we'll all be employed with "knowledge jobs", but what happens when the knowledge jobs move offshore? Doesn't this equate to leaving our own highly skilled individuals unemployed/underemployed while we're pumping money into a foriegn economy via payroll? If we oursource our professional jobs, where will stateside consumers get the money to purchase the (now cheaper?) products? Is a "service only" economic model sustainable for the United States?
My question would be... If the US is outsourcing many areas and this in tern is bringing the other countries up in the economic levels, then what can US workers and companies do to stay ahead of the curve and continue to be a worlk leader?
At the rate we are going with outsourcing jobs and having decreasing technical educational levels (studies have shown drops in math in science all the way through college) by the time i am old we will not be tha major world power anymore. Other countries will have taken that from us.
Evolution or ID?
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?
Offshoring jobs increases the management/labor revenue split.
Isn't offshoring just a way to make the rich richer without regard for the American working class?
Isn't it evidence that the wealthy have no regard for those who must do work to stay alive?
Isn't it an utter repudiation of the widely held belief that concentration of capital is good for all of us?
Isn't it a strong reminder that the only thing that keeps capitalism alive is tolerance of the working man for the profligacy of the non-working class?
I'm no socialist, but I know a revolt when I see one coming. The rich in this country will be lucky if they aren't killed, cooked, and eaten before it's done.
To the CEOs of the outsourcing companies:
Is the outsourcing really cheaper when the total costs are figured, or is this move a way to show shareholders that you're doing some cutting in the down economy?
Hot Damn! It's the Soggy Bottom Boys!
Considering this, can the short-term financial gains really offset the long-term benefits a loyal and motivated workforce provide?
I'm on record for saying that working 100, 80, even 60 hours per week regularly is dysfunctional and counterproductive. There are other management fads that are likewise dysfunctional and counterproductive.
To what extent is outsourcing being driven by staff resistance to management demands? What kinds of demands are being resisted?
This question can be put to both the pro and anti sides.
"Beer is proof God loves us and wants us to be happy." -- B. Franklin
Ask them this, "Why aren't high level executive jobs outsourced?"
There are a number of perspectives anyone can take on all of this, some purely economic, more purely political and all sorts of odd mixtures.
The one I'm most interested in is this: what obligation does the government have to its citizens? Should it do whatever it can to facilitate profits for businesses? Should it do whatever it can to maintain/attain a high standard of living for all its citizens. Most communities form out of self-interest. They gain more by being together than apart, and often hard compromises are necessary where individuals must give up something for the common good that they've agreed to support. My feeling is that citizens, government and business have all lost any sense of this commonality of interest. So the first question I would ask is: who gains by offshoring and is that gain for the common good or for a specialized good. My feeling is that it's really for a specialized good, large corporations, but I may be wrong. But I do think this is the most important question to ask.
I've heard MBA students spouting something about how all the "work" will be outsourced and people in the US will just "manage" everything. I fail to see how this is a viable model for a country. The foreigners will learn management too, and then those US managers that don't know anything about day to day operations in Singapore will be next to go. How can anyone claim a nation of upper managers is viable with a straight face?
They should comment on the so called "cost of living advantage:"
Q1: If the severe oppression underlying working conditions for the vast majority of Indians was removed, would outsourcing of "high-end" jobs to India cease to be profitable?
Q2: How does the current practice of outsourcing of "high-end" jobs to India help Indians in the ongoing struggle to remove the severe oppression there?
Examples of oppression and their supporting infrastructure:
1) Forced and *uncompensated* displacement of people from rural areas into the cities because of emminent domain siezure by authorities. (Official Indian government figures put the number of people affected by this at around 40Million since 1947. Activists estimate the number is much much higher.)
2) Ubiquitious child labor in the houshold cleaning, and other related service sectors. No real enforcement against it.
3) Child slavery and bonded labor (think "indentured servitude" from your history classes, but much worse.) affecting millions in rural areas. Sporadic enforcement against it.
4) Open physical and verbal brutality of authorities (police, guards, and even employers) towards the poor to keep them obedient and compliant. Personal Note: once on a trip to India, I saw a policeman beat a little beggar kid about 3 hours after my plane touched down. I see examples of stuff like this on every trip to India. I have even heard many well-to-do folks talk openly about how "this is all those kind of people can understand."
5) Right to education for everyone exists on paper only. Many areas have no functioning public school or that school has been "captured" by a subsection of the community with others excluded by overt and implicit discrimination.
6) No democracy within political parties. The voter has no say as to whom will run for a seat on behalf of any given party. (e.g. No caucuses or primaries of any kind.) Rules *preventing* elected members of parliament from voting their conscience on issues affecting their locality.
7) No freedom of information act or sunshine laws. (Even Ashcroft has to obey at least some FOI requests.) Example of a resulting state secret: How much money was spent on the goverment support of parochial (Christian and Muslim) schools as compared to the money spent on public schools open to all?
8) No right to a speedy trial by a jury of peers. Say what you will about the OJ case, etc., participation in jury trials is a powerful way in which the public gets some control over their own destiny by being a part of the justice system. It is a lot harder to corrupt 12 randomly chosen jurors with other jobs than it is to get at one judge who you can count on for repeat business.
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'?
Er, no, that's no the way it works.
Yes, moving a car factory to El Salvador will cost some US jobs in the short term. But no, there will be a price drop (or a price/performance improvement) in cars available in the USA. There is the idea floating around that outsourcing means that companies just keep the profits, and that money just vanishes from the economies somehow. However, in a competitive market like cars, some company is always willing to trade lower profits for increased market share. This can take the form of selling the same car for less, or more car for the same price. But this puts pressure on everyone else to lower prices.
For example, compare how much car you can get for 1/4th of the median family income today compared to a few decades ago. A 2004 Civic is a vastly better car than anything one could buy in 1972.
And look at how much better US made cars got in the decade after the Japanese import boom started. While it might have been painful for the workers in Detroit, for the vastly greater number of US car drivers, imports and outsourcing have been a HUGE gain.
The thing about free trade is that the pain is concentrated, but the benefits are diffuse. But the aggregate benefits always (and yes, I mean ALWAYS - I don't know of a single counterexample in the last few thousand years) outweigh the aggregate losses.
The wage differential between the USA and India is a reflection of our greater wealth and productivity, not a threat to our wealth and productivity.
My video compression blog
Well, unskilled labor manufacturing is leaving in droves, and has been for decades. This is probably a good thing in the long term - you want pollution producing industries here?
The way American companies compete against foreign companies is the same way we have for centuries - innovation and productivity. Even though Ford could build a car plant in Mongolia and pay 1% of UAW wages, they'd lose their shirt. Shipping costs to consumers and from suppliers, lack of a trained labor force, etcetera would cost them much more than they'd save.
Now, making plastic toys? Yeah, that's in China now, for the reasons you cite. But how is that a bad thing? Have you SEEN the toys you can buy for $20 now? Unbelievable! What do you think it'd cost to build, say, a Hoberman Sphere with US labor? How many fewer would get sold at that price. Not a lot of US jobs saved, but Hoberman is a lot poorer. And he lives in the USA.
As for environmental protections, we certainly need better global environmental controls. But trade isn't the problem or the solution there. Even if we had complete trade barriers, greenhouse gasses don't know borders.
My video compression blog
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?
I can remember a few weeks ago - and this is purely anecdotal on my part - watching CNBC on the TV in the Cafeteria at work, and they were interviewing a couple of stock analysts about the "recovery" and offshoring labor, and one of the guys made a comment that made everyone in the room sort of gasp.
He said, paraphrasing, "America, which for the last fifty years or so has been consuming vastly greater amounts of resources than they produce, has had an artificially high standard of living. Its going to be painful until the American lifestyle comes more in line with the rest of the world."
Just thought I would relate that observation. It seemed appropriate when the topic of outsourcing and offshoring comes up. You can take it as either playing devil's advocate, or something to get you motivated to ensure that it doesn't happen.
What?