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An Independent Study on Offshoring IT?
vsprintf writes "What are the real effects of offshoring on the U.S. technology sector? Pick your economist on the subject. The Bush administration's Gregory Mankiw says it's all good, and exporting jobs is just a new way to do trade. In Congressional testimony, Ralph Gomory says a little bit is okay, but too much is bad, while Herman Daly says it's just plain bad. The ITAA's paid mouthpiece, Harris Miller, says it must be good because IT workers in India wear Nike tennis shoes. At last, it appears the IEEE-USA has persuaded Congress to pay for an independent study to determine how offshoring really affects U.S. IT."
So IT workers in India are wearing shoes made in Indonesia. How is this good for the US economy, again?
"[Regarding the 'cloud,'] ownership was what made America different than Russia." -- Woz
The only people who will benefit from outsourcing are corporate execs and stockholders.
The rest of us will be left with nothing to do and it won't matter if goods and services are cheaper if you don't have a wage to pay for them.
Meanwhile the Indians etc. will be undercut by the Chinese and they'll be undercut by someone else.
Where does it end?
He basically wrote all these economic books and once he was hired by the Bush administration, he contradicts his writings.
There's been discussion before on this subject which affects us here in the UK too.
I maintain the major problem is gradual de-skilling. If potential software engineers simply see that their future jobs are likely to go offshore, they will not go into the profession. Software is still a somewhat apprentice based profession in that you usually require some coding skills before becoming team leaders or designers and then development managers and CIOs or CTOs.
If you are pulling away base support in the profession, then de-skilling will gradually move up the ladder. More jobs,more high-powered jobs will move offshore until wage parity ensues. By then, it's too late, corporates will have followed the skill base. An industry responsible for (a rough guess) 15% of Western economies will have moved elsewhere.
And you can't compare the software industry to manufacturing. Software is not manufactured and, so far as I can see, will not be manufactured for at last 25-30 years. But guess which countries will reap the benefit of writing the code manufacturing software?
Did he inhale?
Somehow Clinton made millions upon millions of jobs.. many of them very well-paying tech jobs. But at the same time, he was a major proponent of globalization and the governmental practices that encourage outsourcing.
:-)
Though maybe Clinton is unique in being able to accomplish this... he always seems to be able to get away with breaking the rules.
Corporations don't pay any taxes these days. If this poorly made garbage never enters the US, no US tax will be paid on it.
I dont live in the US, but the effects are clearly visible (in Europe less, because the outsourcing is since May within the EU, so basically there is not too much outsourcing)
a moderate outsourcing is good for everyone, it opens new markets because it helps to develop. Massively outsourcing, produces huge trade deficits and basically only shifts money.
What currently happens is following development, currently everybody thinks that companies can produce cheaply and sell expensive here. That only works as long as people have money. The long term trend goes towards crash of the monetary system in the west, or at least in the US, with trade deficits which are enourmous. The classical example of this was Argentina in the nineties, basically a classical example of a country which did not produce anything inshore but imported everything. The crash was imminent, and came around 2000-2001.
What currently happens is that some people thing a patent system which basically acts as a highway robbers tool might help. This might delay things but only for a certain period of time. Once the production is gone entirely, the research also will follow and with it the so called IP holders (which shift overtime, since patents run out), unless the current patent system crumbels under its own weight, because of the massive abuse which is currently happening before.
So what would be the solution. Simple, try to keep certain core industries and research in the country, and do moderate outsourcing which opens the doors for the wealth of everybody. But for heavens sake, keep some industries and research in the country or at least in the monetary zone.
One common thread to anything done by the U.S. government is that big business is preferable over small business is preferable over independent contractors.
After all, how often does the federal government do anything to protect small businesses or individuals from being destroyed by large businesses?
They are more likely to protect the big businesses from being mistreated by small businesses.
For example, the whole patent system is nothing but protection of big business from small businesses and individuals.
When it comes time for important contracts, who gets the contracts, the big business or the small business? From what I see, it doesn't matter at all if the small business has much greater expertise in the matter.
So if the big business can make money by moving some activities overseas, everything is just fine with Congress.
As long as the big corporations and those corporations with friends in Congress make tons of money, nothing else matters.
Of course, there is a bigger issue that everyone ignores.
When we export jobs, we are exporting vital expertise. After those who used to do the work are no longer up to date, we lose the ability to do the work ourselves. We're not there with software development and it will take a while, but it is forseeable that at some point we won't have the expertise we need to handle emergencies.
So what happens when China declares war against us 40 or 50 years from now? What do we do after they cut off our access to the exepertise we will need to win the war?
Include all the manufacturing that we no longer have the capability of doing without a long lead-time, and we're going to be in serious trouble.
Our chances of prevailing against China will be about like Poland's chances against Germany in the early days of World War II.
It looks to me like we're well on our way to losing the next WOrld War.
Well, first you persuade other countries to open up their economies to your imports, claiming this will enable them to step up on the ladder towards geater societal wealth and towards a more skill-based economy.
Then, when they actually do, and start reaping some rewards from it, you start acting like it's the second coming of antichrist.
So what do you suggest? Stop outsourcing, stop manufacturing abroad? Are you also then prepared to accept the trade retaliations from the rest of the world? Some people applauded your steel tariffs as something good. Of course, the US ended up losing a lot more money - and more jobs - total than it saved in that particular sector by postponing an inevitable restructuring.
Trust the Computer. The Computer is your friend.
Outsourcing "IT" is like outsourcing "engineering."
If the question or design is simple then it is simply begs for a commodity-based result -- an answer or drawing. This is not to say that the people working on these problems are simple, it's just an issue of language, culture, and time-zone barriers.
America and the UK have proven themselves to be at the forefront of technology -- constantly improving on older developments; driving in directions yet unforseen. This happens daily, and in every sector of the market -- it is continual. Sure, some of our problems can be outsourced because they are simple to convey. However, much of our software and systems are more dynamic than we often admit. These "little" changes and enhancements are what I believe will be the demarcation point between offshore and traditional IT environments.
I don't think many jobs will be lost to foreign markets, because they will remain needed here. However, I think more jobs will be created in these offshored markets because of increased demand.
Call me naive, but surely there's no such thing as an independent study? After all, someone's paying for it and usually the someone who's paying for it has already got an opinion. I've yet to see an "independent study" which didn't favour the organisation paying for it.
If you look at whole countries, free trade, in services as well as goods, is a good thing. Even if one country is less efficient at doing everything, it still pays for it to trade. This is such an important theory, that economists have come up with a name for it: the theory of comparative advantage.
However, economics, and particularly the classicial sort of economics, is not very good at sorting out what happens to the distribution of income within each economy. And, as several posters have pointed out, the people who have seemed to do most well out of free trade in the past have been the owners of capital (shareholders).
In practice, it's an empirical question. To use a baking analogy, you have to weigh up the bigger pie that free trade produces against the fact that a sizeable section of society is getting slighly less *proportionately*. If the pie grows enough, it doesn't matter, but that's not guaranteed to happen.
Didn't Bush just promise thousands of new jobs for the American working class if he were re-elected? How can he promise this while his administration is supporting the outsourcing of jobs to other countries?
I'm sure he did promise jobs.. what the government here does is promise jobs too. Except the jobs that ended were high paying middle class jobs, and the jobs that are arriving are $8-12/hr callcenter positions.
Now, I don't know about you, but I don't know too many little kids that go around saying they want to work in a callcenter when they grow up. Erosion of the middle class isn't a good thing.
..don't panic
The big fallacy in all the economists' arguments for offshoring is right here: "US GDP increases, so that must be good for the US."
But what's really happening is this: incomes of a few CEOs go up from (say) $1M to $2M, while incomes of 10 times as many engineers go down from (say) $100k to $20k. That's a gain in money terms, but it's very bad for 90% of the people affected. So, it's bad for the USA.
I just think there is an ever-growing paranoia in the developed countries about software job offshoring. Hasn't such offshoring of other jobs happened in the past, like say, manufacturing? Aren't most cars and other white goods manufactured in Japan and China? What happened to the workers in that industry some of who would obviously have lost jobs?
More to the issue, I'm not sure what decides the level of outsourcing - "some", "moderate" or "massive". Even when offshoring wasn't happening, a lot of companies prefered "outsourcing" - subcontracting their IT needs and business to specialist companies who had the skills and knowledge to fulfill them, leaving the parent organization free from the usual worries of delivery, quality, acceptance etc. So if the same happens now, it's bad? Because there is growing fear of losing jobs? Surely, the involved professionals would be smart enough to know that economics drives a business, not preferences!
Further, if the products of US-based companies are used/consumed by people elsewhere, from the (less) money earned from US companies, surely the profits are going back to USA. So the article gave an example of Nike. I'm sure more parallels can be drawn without stretching the imagination too far!
Finally, if the cost of building a product, be it software, is relatively less (and so is the cost of maintaining it), then the cost of direct users/consumers would be much lesser. Say, if the Air-traffic control systems cost less to build and operate, it would lead to less fees towards airlines, which means they can cut costs further and offer cheaper tickets.
And contrary to what another poster mentioned, yes, the corporates may follow the skills, but why would they distance themselves from consumers? They have nothing to gain there, if there is a growing resentment against their products/services. And if they decide to not pursue offshoring, they stand to lose considerable market share simply due to the cost-benefits offered by the competitors. So, from their perspective, its a downward spiral.
Outsourcing is happening. Live with it. Some jobs are going elsewhere. Sure. Are those the best jobs? Surely, it gives the professionals in the developed world better jobs (creative as compared to monotonous, boring, trivial).
Maybe this brouhaha is there because IT professionals have a bigger mouthpiece, and a cheaper and far easier means of voicing their concerns.
http://efil.blogspot.com/
It's good because it is symptomatic of the real underlying issue which is that jobs of any sort are no longer necessary in the most advanced economies.
Think about it, on balance the really enormous social result of the various industrial revolutions that took place in and around the nineteenth century was the end of slavery. Slavery ended because it could, not because it should. This is true with so many things that are attributed to good will and heroic characters. That's all mythology.
This struck me the other day when someone was talking in a wide-eyed manner about all the things that would have to be done manually without industrial and agriculural machinery. The person kept using the pronoun "you" saying "you would have to do this by hand and you would have to do that by hand." I spoke up and said, no actually a slave would most likely have done most of the things you're referring to before the age of machinery.
So, if machinery and centralized power ended slavery, then IT probably will end work as we know it and this offshoring issue is really symptomatic of a huge evolution in society that is just beginning. And, of course, in the beginning the resistance will be enormous and it will still be here hundreds of years from now. In evidence I would introduce, among others, the confederate flag issue in the American South.
As it is today, people in poor countries see their young children starve to death, or die from lack of medicine, just so people in rich countries don't have to suffer the discomfort of looking for a new job. Outsourcing is part of a re-shuffling of wealth that may be uncomfortable for a while, but in the long run economies around the world will become more similar, so we won't see the extreme cruelties and conflicts of desperation that we see today.
Terrorists can't threaten a country's freedom and democracy. Only lawmakers and voters can do that.
in such a kind of study is this. Is it possible in the long run that just the US makes money (pieces of paper, no more) while the rest of the world suffers? Is it possible for a single 20 metre tall wave to stay like that in a calm sea around?
An action or transaction that results in monetary gain for the US cannot be construed as 'good'. Hardly anything innovative happens in the US that is of importance for the rest of the world. In fact the US has lagged behind in things like cellphones and bandwidth. And within the US, the patents system seems so messed up, true innovators can hardly be expected to stay motivated.
Money, like blood, needs to circulate. If it accumulates in just one place, it can lead to a heart attack.
-
If you keep throwing chairs, one day you'll break windows....
...if the three points below are realized.
1. Free trade of goods. Almost done. Shipping goods from country A to country B is cheap (even if some tariffs are applied).
2. Free movement of workforce. Countries all over the world have a limitation on this. You just can't go to work in an other country. Even in the EU it is not easy (lot of paperwork) to do so. Also, language and cultural differences make a person reluctant to move.
3. Free trade of knowledge. Patents and copyrights restrict the sharing of knowlegde. They should be eliminated entirely.
Big businesses want point 1 to be realized, but do not want point 2 and 3. Until point 2 and 3 become true, outsourcing is most probably bad for everyone.
Government cannot make man richer, but it can make him poorer. - Ludwig von Mises
If he did it was for public consumption only. If you go over his record you will find plenty of "for public consumption only" statements that are directly contradicted in policy decisions.
Bush's REAL consitutancy is the corporate class. Look at his decisions over the past 3 1/2 years and almost ALL of them directly benifit the corporate class. The rest of them benift pals in the radical religious right.
Why don't you embrace your slashbotness instead of living in a dreamworld?
Problem...not everyone can live like the US...if they do...then we all die. There aren't enough resources to go around. 6 billion plus people all can't drive cadilacs. Not that we shouldn't raise the standard of living...but we need population control before that becomes a universal option.
Some people live in the desert and complain that there's no rain
hey idiot...
you CAN'T pay into insurance of a 401K when you don't have them.
If you paid any attention to the news, you'd know that less and less people have insurance and less and less people have 401ks. Less people can afford insurance (esp health insurance) and companies offer less perks. The "benefits" you are touting are already going to fewer and fewer people.
It's nice to read the whole fucking message before you go off on your little tirades. If you did you would of realize THAT is how your argument makes no sense.
Why don't you embrace your slashbotness instead of living in a dreamworld?
I think this would spark off a downward trend.
First, corporations outsource, and locals loss jobs/move to poorly salaried jobs.
They will have less spending power, and hence only able to afford cheap china branded imports etc.
Local businesses still employing expensive americans in manufacturing etc feels the heat since they just can't compete, so either they will go bust or outsource too.
More jobless.
The cycle continues.
Finally, one fine day China can just openly declare "we are going to take over Taiwan, be it by peaceful means or by force!" and when the US president then tries to say something out of his ass, every equipment in the military fails! OMG! Apparently all the military stuff is made in China too!
And USA got PWNED!
Ok ok, seriously that wouldn't really happen, but if outsourcing goes on, a lot of social unrest can arrise in the states..
Online backup with Mozy, sounds like Ozzie, but more!
6 billion plus people all can't drive cadilacs.
This is certainly true, and it's an important injustice.
But the extreme cruelties and conflicts of desperation are not from lack of cadillacs. It's from fundamental issues like lack of food, water, medicine, and basic comforts.
As for getting luxuries and additional comfort without destroying our planet, technology may offer solutions, as more and more people put their minds to these problems. Today only the privileged few in rich countries can contribute to this development (I'm exaggerating, but I suppose you understand what I mean). As economy improves in more and more countries, just imagine the potential, when billions of people can contribute, inventing, developing and buying environmentally sound technology.
Terrorists can't threaten a country's freedom and democracy. Only lawmakers and voters can do that.
Actually the west is moving away from free markets, just as the rest of the world has been perusaded to move towards them, so this is no surprise (examples patent and copyright laws deisgned to protet existing industry stuctures for fear of job losses, high regulatory burdens which criplle start-ups and small firms, heavy government subsidies for certain industries)
You are correct to remind us that capitalism is not a zero-sum game; wealth is created. It is unevenly distributed, but still, most people have gained in the past. If your boss increases his own income by $100k and increases yours by $5k, well, the bottom line for you is a gain of $5k.
Now, that is changing. Today's CEO is greedier than Carnegie or Rockefeller or J. P. Morgan were. To increase his personal income by $1M, today's CEO will destroy the careers of dozens of engineers. They are not being replaced by automation, which increases the productivity of other American workers. They are being replaced by Indians and Chinese. To economists, it's a gain if one man gains $1M while 10 others lose $80K each. In the real world, it's a disaster for our society.
One possible way to attack the problem, without unduly restricting the economic freedom which helps the whole world to progress, would be to recognize what these CEO's are doing. They determine their own salaries, in reality. A CEO who takes home more than 40 times the median salary of employees in his company is basically a thief. "Compensation" in excess of 40 times the median salary in the same company should be regarded as prima facie evidence of theft.
Companies win bids for state contracts by massively underbidding small local companies, and send the labor offshore. They do not pass the savings they get by employing cheaper labor back to the state, the companies pocket those as profits. Only one group of people wins here, and it the companies.
It does matter where people are located. It isn't right that entire towns in the US die because the company headquartered there is allowed to up and move to a place where the labor is cheaper, and where they do not have to abide by stricter labor and environmental laws.
In the US, companies are allowed to exist by the will of the people (they must get incorporation papers from the government, the government [supposedly] is for, by, and of the people. That means that in the US, corporations have a responsibility to the communities that allow them to exist.
At the meeting, Hira described some of the adverse effects offshoring is having on engineers and other high-tech workers in the United States.
Of course, outsourcing has "adverse effects" on US high-tech workers; we don't need a $2m study to determine that. But if people in India can provide IT services more efficiently than us, they should provide IT services. And that's not something India forced upon us, it's something we have pressed the rest of the world to accept for several decades now.
And it's not like it's anything new: textile workers, steel workers, many parts of the service sector, manufacturing, assembly jobs, etc. have all moved overseas. Why is IT supposed to be special? Slapping together a VisualBasic app or debugging a network requires no more skill than assembling a car or making a suit.
What I'm personally seeing is that the US/EU companies are firing the junior programmers and keeping the senior architects due to outsourcing to India. The effect of this is to essentially cut out the entire next generation of software architects because they do not get enough experience (and often quit IT totally).
If you were a selfish nationalist , they are selling tomorrow for today. But if you were a Capitalist nation , it makes perfect senseDon't dish it out , if you can't take it applies for Capitalism as well. (think of this as payback for all the agent orange and napalam used in name of Capitali^H^H^HDemocracy)
The real sad part is that actual losers in this nothing to do with the past events which built up to this (and neither will those of the future).-- 250 USD per month and 70 hour weeks does not a sweatshop make.
Quidquid latine dictum sit, altum videtur
I started out "life" as an engineer. By the early nineties that was pretty much gone. I don't know if it was outsourcing or what - just companies going out of business or downsizing. I was always good with computers so I focused on that aspect of my career. Frankly, programming seemed to be what I was doing the most of as an engineer anyway. With computer technology on the "outs" in the U.S. there is little for technically-minded people to do. You can spend 100k on college and work at a grocery store, but I would think that is "a bit" of a disappointment. I teach at the college level part time and we are still seeing a continued drop-off in technical courses. I am surprised that I am still teaching this term. Nevertheless, people go to college to try to obtain decent jobs. So students will gravitate toward those areas that have the best pay / interest for them. What I worry about is what I may have to do next. I have a lot of un / under employed colleagues. I know many people who have switched careers (Real Estate, etc.). Seriously, I would consider becoming an automobile mechanic or residential electrician. Let's see, and auto mechanic with a P.E. license or an electrician with a BSEE. With IT salaries falling these are viable options in America. I just think it would be funny that the grease monky who works on your car has a master's degree, makes more money and works less hours than his previous corporate job. The fact is the developing countries can produce perfectly good engineers which means that all engineers have to compete with them. I do not believe that anybody can stop the world economy. I don't believe in "zero-sum" economics, but in the short term there is going to be a lot of pain from the richer / costlier countries. Also, let's hope the Chinese and Russians do a nice job designing our next generation military systems so that we can continue picking on people we don't like...or vote Bush out.
Big corporations, the ones doing the outsourcing, do not provide the bulk of the jobs. For geeks, which to some implies having more intelligence than the common worker, some of you are dumber than the proverbial doorknob.
The primary job creation engine of the economy is the small businessman (or woman). Big corporations get the headlines because they usually affect people in larger numbers at one time. However their numbers are really not that meaningful when you look at the number of people employed in this country. There are 138 MILLION people working in the US.
How many jobs were outsourced? Now, looking back on history shouldn't we consider the 70s the age of outsourcing automobile workers? The 80s textile workers?
As for the job creation. The capital gains tax cuts and similar equalizing of the percentage of income tax benefit the small business greatly. I know, I have four relatives with small businesses who have grosses from as low as 500k to nearly 5 million. Guess what, they have more money and they did exactly what was expected, they hired to grow even bigger.
Now what will stop this? Simple, raising the taxes on the "evil rich". Sorry, the proposed plans will smack down more small businesses than anyone. The ones with the millions and billions have relatively no income and have the means to dodge nearly most forms of taxes.
In the end the only proper way to deal with taxation is by consumption. The rich consume in a very big fashion and the fairtax will accomplish that. http://www.fairtax.org
* Winners compare their achievements to their goals, losers compare theirs to that of others.
In the 80's it was the Japenese and Germans beating the US in manufacturing, and people were claiming that we were doomed to become a third world nation. The US economic system kept going. Offshoring tech jobs will not lead to the economic disaster liberals are waiting for. Besides it must be good, George Soros' companies made millions consulting US companies on moving jobs offshore.
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Ultimately, jobs which can be exactly and specifically tied to a process / response tree (a flowchart of actions) are easy to outsource.
Programmers who are handed a function spec and expected to return with a function can be outsourced.
Creativity cannot be outsourced effectively. It lives where it lives. There may be creativity in the other country, but that's not outsourcing.
Most outsourced IT fails not due to the failure of the outsource employees, but due to the failure of the inside company project managers. As any consultant can tell you, the vast majority of people who think they know how to manage a project clearly do not. As a result, what gets sent overseas are poorly thought out specifications that don't properly describe the process the project manager intended, which itself never matached the user's need.
When I sit in a meeting with a project manager and an end-user constituency representative, 90% of the time I spend is reconcilliation of the ideas from both -- when they are quite sure they'd already done this "in the spec"
As long as there are bad specs and bad managers to watch over them, there will be jobs for local people with the chops to turn those into functional code.
-AP
The problem with quotes on the internet, is that nobody bothers to check their veracity. -- Abraham Lincoln
No the anti-offshoring deal on Slashdot has underlying racism in it... or "nationalism" as the other poster said. The idea is that only our group should have the opportunity to do programming or whatever not based on skill (or competitiveness) but on nationality.
Slashdot is one the most subtetly racist sites on the internet.
It's not even close to a free market, and if you insist on calling it that, I'll ask for your detailed proof of it....I see a completely unfree market, not only totally unfree but massively unfair as well, except for a ferw elite connected ones. A free market would mean at a minimum either zero tariffs or exact equal tariffs on import and export, both ways, on all goods and services. It doesn't exist in reality, so don't insist it does in some far off futre that hasn't arrived yet. A free market would have exactly the same regulations and workplace laws, either zero, or the same. And so on.
Actually, I'm a little older than most folks here on slashdot and I started "noticing it" and lobbying against globalisation in the early 70's, all the way to face to faces with congress people. And everything myself and many others warned about has happened. And it will continue to get worse and the really big losers are the US middle class. Some folks are actually sophisticated enough to "notice" the difference between produced wealth and artifically produced credit, and we can point it out. Fort example,no matter how many times the shills call 30 year mortgages (or now interrst only mortgages) better than the ten year ones I remember, it's still a worse deal for the consumer long term. Same with big ticket items like cars. Some of us have noticed that day to day figures and realites don't jibe with what we were promised and told about 25-30 years ago. All we have seen is crappier products on the shelves, an artifically inflated dollar that gives people the illusion they have more but gets them less in the long run because of the higher credit that has been massively pushed on people, and a steady erosion of benefits and pensions, with the projections for them to continually keep getting worse. I've seen first hand and personal what happens to small communities when the largest local employer offshores (leaving upper management intact of course). No, they aren't "better off". I've also been effected by the currently illegal immigrant invasion which is tolerated and encouraged by the billionaires.
It's not a recent phenomenon or interest of mine, and I've been pretty consistent on it. Giving corporate tax breaks to companies to outsource is just wrong. Trading without a quid pro quo tariff structure is wrong. Imposing a million detailed laws and regulations on people, then telling them they have to compete with an area/government that has little or no such laws is wrong.
And besides that, I'm a patriot and nationalist, I think it's a function of government to look out for the most people in it's nation, not the top 1% wealthiest internationalists who happen to have a home and HQ inside the US but are really internationalists and loyal only to their own personal profits at the expense of their neighbors. That's a morals and ethics issue there, so if you disagree we'll have to leave it at that, it's not exactly quantifiable in terms of only dollars.
The US does not get the money.
Current tax laws allow US corporations with foreign operations (multinationals) to allow their overseas branches to retain profits. Even worse, many "US" corporations have moved thier headquarters off-shore to avoid paying Federal income taxes on their aggregate operations. Case in point - Accenture, the progeny of Arthur Andersen, has moved its headquarters to the Carribean, is active in outsourcing work abroad, and has many federal contracts.
I suppose your arguing the theoretical point that increased profits for US corporations == growth in the US economy. Certainly, those who own shares in the outsourcing companies will see a rise in their wealth. But how much of the share value is eventually translated into increased domestic consumption, as opposed to being effectively banked, and then spent overseas, or spent for the good of the corporation? Are we better off when those who actually, really own the corporations - the top 1% of those people in the American economy - earn more money through increased corporate profits or when the average worker earns more money?
The world financial system is also unlikely to allow the US to continue with a grossly inflated dollar. US companies will be in a much poorer financial position is we face a currency crisis similar to what happened to the British pound a decade ago. Ironically, our current desire to import all of our manufactured goods, thus creating a gigantic trade deficit, combined with the Bush administration's penchant for enormous deficits, will inevitably weaken the dollar, making outsourcing less atrractive.
But the damage will be done. The wealthiest Americans will get the money. The middle class will continue its long fall into poverty, and investment will be directed from abroad. This is a disasterous situation, all caused by short term greed. We should care more about who gets the money, rather than which country. If we destroy the US middle class, other countries middle classes will follow the same path. We're looking at the beginnings of dystopia.
/* Dang, I can't type that well. */
We decide what goes on in this country, down to the rules and law that decide EVERYTHING. If WE decide that outsourcing should be illegal, and that anyone who participates in it should be skinned alive and then burned at the stake, then that is OUR choice.
It is a government for the people and by the people, according to the constitution.
eat shiat and bark at the moon
It truly is the WORST experience, if you happen to connect to someone in India. The last time I called for support (for Vonage), the phone call took probably twice as long as it would have if he knew what I was trying to say (and vice versa). Adding in the frustration of the whole experience (plus the 45 minute wait), and the bad word-of-mouth that I am going to generate for Vonage, I'd say this off-shoring trend will not last too much longer, if I am an example of an average (well... maybe above-average) consumer.
The money you make is a result of supply vs demand. When most of the engineers/programmers/etc are employeed throughout the world, the salary will be good, and all developed countries will be fine. When you add in a new country out of nowhere, the supply increases, the demand for any ONE person is lessoned, and thus the salary lowers. This HURTS ALL developed countries. It only helps emerging countries. Is Japan and europe worried about this too?
So what happens when China declares war against us 40 or 50 years from now?
Why should they want to invade, if all knowledge has left the USA because of heavy outsourcing and all that is left are a few hundred million people whose major skill is to ask if one want fries with the order?
Seriously, that is one of the most ridiculous arguments I heard against outsourcing. Brain-drain and loss of skill are serious problems, but before worrying about chinese supertanks and missiles, one should be concerned about being able to keep up with the industry, having jobs for people that aren't rocket scientists etc. first.
Somehow I don't think that the service men/women who died trying to "save" South Vietnam were thinking about "Capitalism" or "Democracy" either. I am sure that most of them were thinking something like "I've got to get out of here".
However I do think that this was exactly the thinking that led the senior brass in Washington to send them there. The Vietnam war (and the Korean war too) was prosecuted because the rise of communism was seen as a threat to the American way of life - in other words a threat to Capitalism.
Unfortunately America preaches capitalism and free market economics all the time but is very two-faced about this kind of stuff. Massive subsidies to domestic industries and sanctions against foreign industries is directly contrary to these ideals.
Interference in the affairs of other nations is rarely welcomed, whether that is done through economic means or with a gun. The US doesn't like it when other nations try to interfere with its own internal affairs. For some reason though they seem to think it's perfectly OK for them to interfere with the affairs of others.
When you behave like that payback is inevitable - another name for this concept is Karma.
These "Benidict Arnold" corporations, in exporting good paying jobs to other countries, will do themselves in in the long run.
These megacorps want to get away without paying US wages, while at the same time, being dependent on a US consumer-supported MARKET to sustain their product.
Dell and HP, for example, aren't selling their expensive services and products to India. They are selling them to the USA and Europe.
Therefore, outsourcers depend on EVERYONE ELSE NOT outsourcing middle-class jobs, or else their market will ultimately collapse.
It's not just the corps that are betraying the American worker. Corporations will do anything allowed by law to make a buck. I don't have a problem with that, if business didn't make money, NONE of us would have jobs.
The traitor here is our government which does NOTHING to stop this practice, nor to even discourage it. Both parties are responsible. Both parties are beholden to the corps.
John Kerry gave some lip service to stopping outsourcing, but when you look at where his fortune comes from (his wife), mainly from OFFSHORING Heinz plants, one must wonder how serious he is about it.
The problem of outsourcing, like the IP cartels (MPAA/RIAA) are enemies that we can't vote out of power because BOTH parties are under their spell.
My solution to outsourcing is very simple.
Give all American businesses a tax credit equal to the salaries of all American citizens they employ inside the USA, minus the salary of all non-US citizens employed outside the USA.
This will allow outsourcers to play by the existing rules, while giving businesses who employ Americans a tax advantage over them.
There really won't be a loss in tax revenue, as all corporate taxes are illusory (all taxes get passed on to the customer), and it will help it, as it will encourage employers to employ more people and to pay higher wages.
Corporatism != Free Market
I'll believe in the benifits of outsoucing as soon as they start outsourcing CEO's. Currently some of them make over 400 times what the average worker makes. Think of all the money a company could save! Think of how much this would benifit the US economy! All of the arguments made about how IT workers make too much and if they deserve the jobs they spent years learning how to do, and years keeping up with all the advances apply equally to ALL workers, management included. Let's let blind adherence to capitalism is all good turn us ALL into poor burger flippers. Then capitalism, globalization, and free trade will have achieved what communism couldn't and turn the US into a third world country.
Yep, the small businesses hire the most people, overall.
"How many jobs were outsourced? Now, looking back on history shouldn't we consider the 70s the age of outsourcing automobile workers? The 80s textile workers?"
YES! But this has been discussed before. Talk to people in the "rust belt" now.
"As for the job creation. The capital gains tax cuts and similar equalizing of the percentage of income tax benefit the small business greatly."
How? Most small businesses do NOT see much benefit from capital gains cuts. That is mostly on UNEARNED income.
You see, there are, basically, TWO types of income:
Earned - via labour
Unearned - via investments
The small businesses focus almost exclusively on the EARNED income. They make things and sell them. They provide a service for a fee.
Big businesses and rich individuals benefit from the UNEARNED portion. Stock dividends, income from selling stock, etc.
"Now what will stop this? Simple, raising the taxes on the "evil rich"."
Hardly. All that needs to be done is to focus the tax structure a bit more fairly (by "fairly", I mean "for the greatest number"). Since the majority of US citizens do NOT see much benefit from reducing taxes on UNEARNED income, then we do NOT reduce taxes on unearned income.
Since the majority of US citizens WOULD see a benefit from reducing taxes on EARNED income, then we reduce taxes on EARNED income.
"The ones with the millions and billions have relatively no income and have the means to dodge nearly most forms of taxes."
So you've fallen for the old right-wing trick, eh?
The key is to identify and remove the tax loop-holes. Then the taxes are re-structured to provide the greatest incentive for the greatest number.
The stuff you've been reading is biased. The "small businesses" you hear about include Bush and Cheney because they receive income from properties. And the "small business" rules have been setup to include that.
"...to each according to his need, and from each according to his ability."
... anyday.
Isn't that communism? No offense, but I have seen communism with my own eyes and I will take the hellishly evil capitalism you are talking about over communism as implemented in the historical Soviet sense
Perhaps the problem isn't that the government isn't taking enough money - it is that the money that the government takes isn't being spent in an economically responsible manner.
See also : The Big Dig, a $17B (that's 17 followed by 9 zeros) civil engineering project to put in a three mile tunnel to route traffic to Logan Airport. Seventeen billion dollars. How much would it cost to have built an entirely new airport out in the 'burbs of Boston, eliminating the traffic problem entirely? For reference Austin's Bergstrom International Airport was built for about $600M. Even if the new Logan was to have been 10x as large as Austin
s International Airport, that't stll less than HALF of what Ted Kennedy spent putting in a three mile tunnel so they could keep on using the same old airport.
How about simply force the rich to build the new housing, education facilities, healthcare facilities, airports from their own money, let them run them as for-profit institutions and cap their profits at roughly what the S&P500 return rate is averaging (8% a year sounds very enticing) and let them fund it with all the money they save by not having to pay for government clusterfucks like The Big Dig. People are a LOT more responsible with money when they are spending their own money.
Glonoinha the MebiByte Slayer