Paul Samuelson Challenges Outsourcing

Noryungi writes "Paul A. Samuelson, Nobel Laureate in Economics, a professor at MIT challenges the outsourcing of jobs (retinal scan login required) to India and China. Choice quote: To put things in simplified terms, he explained in the interview, being able to purchase groceries 20 percent cheaper at Wal-Mart does not necessarily make up for the wage losses."

Comments

globalized economy.

[garcia]

To put things in simplified terms... He doesn't believe in a globalized economy and honestly he should be someone that we listen to.

Re:globalized economy.

[garcia]

Wow, that's unbiased right there.

The man is in his late 80s. He's been a professor at MIT for ~60 years. He's written the book (now in it's 100000th edition) that is the standard for economics.

Of course the man is biased.

Re:globalized economy.

[timjdot]

"The problem with the US economy is that there are not enough highly skilled people willing to work for minimum wage."

Re:globalized economy.

[AKAImBatman]

Actually, he said that if you believe that shipping wages elsewhere won't reduce the wages here, then you believe in the tooth fairy. He's not against international trade, which he claims is another thing entirely.

I'm still wrestling with how it actually does compare.

Re:globalized economy.

[Kaa]

To put things in simplified terms... He doesn't believe in a globalized economy

Umm... no. That would be a stupid thing and Samuelson isn't stupid.

What he actually says is that under certain conditions outsourcing can lead to a net economic loss for the USA. This net economic loss could come about through the US losing its innovation edge as information and know-how spreads around the globe.

Note that this is a very close relative of one of standard arguments against open source: free software, often developed overseas, harm American companies because they don't have any technological edge any more.

IMHO globalization is inevitable. If the US attempts to climb into a dark closet and close the door on the rest of the world, the rest of the world will soon be a richer, freer, and more technologically advanced than the US.

Re:globalized economy.

[rhsanborn]

You are certainly correct, but I do disagree that complete globalization will be for the better of the united states. I think that the USA will have to be brought down to the level of the rest of the world before globalization is finished. It is inevitable that over time our profits will slowly trickle out into cheaper workers. The proliferation of degrees across the world means there is a significantly bigger job market that Americans can't currently compete in because of cost of living in the states.

My Best analogy for true globalization is osmosis or diffusion. Currently America has an extremely high concentration of money. Without some way to keep that money in the states, the money will diffuse out across the world to the point where we are at a more equal distribution.

There simply isn't the need for highly skilled workers across the entire world to make the impending situation possible. If every country across the world had the same distribution of labor jobs, and highly skilled jobs as is the case in the united states, then things might work out so that an even distribution of money would be positive for all. Currently, we are simply over saturating the markets with labor. Everyone is competing for the jobs that make products for the United States. Everyone is trying to get our money. We have the biggest pot of money and so thats where the market is. If current trends continue then there will be true diffusion.

This is only mildly good for everyone else. They will all have slightly more money, but there will come a poitn where everyone is equal and there will no longer be this enormous pot to draw from. Whats worse is recession. Currently, everything in the United States is horribly inflated. What costs a dollar here costs significantly less in the countries that want our business. To be globalized and competitive we nee dto change that. We will never be able to inflate the rest of the world to be equal with us, instead, we must completely deflate the US economy to be equal with the rest of the world. It wouldn't work, and hence, recessions happen. The amusing part is that the economies of the rest of the world would go down with a US economy collapse. Its all rather amusing, and its bound to topple. I don't think there is much anyone can do to stop it short of a world-wide effort to equalify the global system, which will also never happen. So, everyone sit back and watch the show, and hope it holds off long enough for you to be out of the mix.

Re:globalized economy.

[NoMoreNicksLeft]

It's also possible that irreversible damage will have been done, by the time a majority of economists realize this. That is, assuming they don't have agendas of their own.

Re:globalized economy.

[Ansonmont]

Ultimately, you could be better off in the USA, even if it does depress wages by moving jobs overseas as long as the cost of living goes down more than the wages get depressed. That could be a net good.

Basically the argument comes down to that of altruism. If you think that helping everyone helps you, then globalization is good, if you think you will be better off by hoarding or protecting your assets from others, then it is a threat.

IANAE(conomist), so I may have missed some of Samuelson's nuances. But he is just seeming to point out to some of the rah-rah outsourcers that there may be some negative consequnces to the one doing the outsourcing.

Re:globalized economy.

[DAldredge]

History. If all these economists really knew so much about the economy they would put their money where their mouth is and invest in the market and make lots of money.

But they don't.

Hell, they can not even agree on how the stock market works or what started the great depression.

It ain't science, it just random guessing with lots of numbers and computers to make it look fancy.

Re:globalized economy.

[be-fan]

Of course, you do realize that understanding economics has little to do with knowing which companies will be successful? That takes a business man's mind, not an economist's.

Re:globalized economy.

[vadim_t]

Thinking that helping everyone helps you isn't altruism. It's just as self-interested as hoarding, except it's a different strategy.

Re:globalized economy.

[be-fan]

Um, it's the economists who keep yelling at us to not run such an enormous deficit. It's the "people" who keep voting for their precious government programs that keep running up the debt.

Re:globalized economy.

[NoMoreNicksLeft]

This is suggesting another possibility. As a matter of fact, by stating that, I grant him that assumption.

Now, you are attacking me, do you realize that? I am suggesting that there are scenarios where waiting to understand things fully are dangerous. I don't go as far as saying "we can't wait" which I don't really believe myself. But it is a worry, all the same. So, your entire argument hinges on this obviously being a situation where waiting could never be harmful (the only situation where my argument could be fallacious). If that is so, please tell. Seriously and honestly, I suppose it could be the case, but it isn't obvious to me, if so.

Can you say that you don't worry that this might be a case where waiting allows irreversible damage ? Intuitively, it feels to me as if it might. I can't see how exploring such a charge might be fallacious.

Re:globalized economy.

[Melantha_Bacchae]

I'm not an economist either, but I do understand a few basics:

US workers unemployed by offshoring make 0, lowering the average wage.

US workers finding new employment find the glut of unemployed workers (low supply + high demand) and the low wages in India devaluing their wages. Again, the average wage is also lowered.

US workers with existing employment find their wages frozen, their benefits cut, their hours longer and more stressful (to both compensate for the extra work of downsizing, and for goofs from offshore workers), and their job security nonexistent.

The only "winners" are the CEO and his cronies whose salaries go up, their benefits go up, and laughing is heard in the vicinity of the bank. Note that few if any of these people are US IT workers, or do much work at all.

As for as cost of living goes, that depends on inflation. With high gas prices, that will be going up, up, up, and the cost of living will tag along.

So US IT workers will "win" high cost of living, low wages, debt (to make ends meet), savings and credit consumed by the unemployed, and bankruptcy.

But if it makes you feel any better, those CEOs won't make off like quite the bandits they want to be. You see, offshore workers have done a great job learning the business of offshoring US companies. So good in fact, that IBM consulting, for instance, is now having to compete for business with their own offshore workers who have formed a nice little consultant company of their own. The fun thing is, the Indian consulting company can of course, under bid IBM. Gotcha!

Unfortunately, for us IT workers in the US, that is only going to drive wages lower as companies like IBM are forced to compete with Indian consultant companies on their way to the bottom.

The only way off this nightmare escalator? Stop treating employees like costs to cut, and start treating them like your company's most valuable resource (remember Human Resources?). Then you can hire quality people, pay them what they are worth, and compete on quality. Then everyone is a "winner"!

Don't think quality works? Who survived the fall 2000 PC crash the best, with the fewest layoffs, a quick return to profitability, and billions in the bank? Apple! Apple kept their prices up, focused on quality instead of the sub $500 PC, and worked feverishly to bring out OS X to build a future. The rest of the companies slashed workers by the tens of thousands, and huddled in their storm shelters. When they came out, the only thing left standing and thriving was the Apple tree, laden with fresh, high quality, fruit.

"No one's going to die, mister. Mothra's going to come and save us."
Taiki Goto, "Mothra", December 14, 1996
(Released in Japan six days before Apple's surprise announcement of the return of Steve Jobs.)

Re:globalized economy.

[Anonymous Coward]

Talking about US-centric navel gazing.
You're quite simply wrong about the importance of the US economy. Compared to any other SINGLE nation, the US is the biggest. That is true.
However, consider that the US is a republic of fifty states that takes up a big chunk of a continent. So, comparing the economy of the US to say Japan or Germany isn't really appropriate. A more approrpriate comparison would be the US -vs- the EU. In fact, the EU is a larger economy when taken as a single unit the way you're talking all the states of the US as a single economy.
But wait, it gets better. Forget the EU, let's make a unit of Japan, Korea, China, Taiwan, Singapore, Malaysia, Thailand and Vietnam. Not only is that monster far larger than the US, it is currently and has been for decades growing more than twice as fast as the US.
In fact, this asian market taken collectively is currently the largest market for companies like Intel and AMD. Even IBM takes a huge share of its sales from the asian market.
Your assumption that the US is so important is based more on a sense of pride than any fact about the global economy.

Re:globalized economy.

[Doc Ruby]

He used to compliment the Soviet Union's growth out of feudalism, when he was justified by the economics. Before the Soviet glory days of the 1960s, his textbook explicitly called Marx "wrong" on several predictions demonstrated wrong by intervening history.

Soviet socialism was unable to sustain its unbalanced military economy on top of a giant energy hungry populace filled with ethnic and other divisions, and millions of political deaths. Other socialisms, like Germany, Canada, France, England, and most other industrialized countries, have fared quite well. Growth, citizen satisfaction and stability are all high. It's not quite the crock you'd like it to be.

Make yourself worth your pay?

[Anonymous Coward]

Instead of all this whining and bitching about outsourcing, wouldn't it just be easier to actualy justify your pay? After all, what logical person is going to pay for something when they can get the exact same thing for half as much?

Re:Make yourself worth your pay?

[underpar]

CEO's are the ones that benefit from the outsourcing. The cost savings aren't passed to the consumer. With that and job loss it doesn't make economic sense.

They're laying off some consumers of their own brands and then not passing on any benefits to the rest of the consumers.

Re:Make yourself worth your pay?

[underpar]

In the good ol' US of A it has been shown there are declining education levels and at least where I have worked declining productivity. We need to remain compeditive and that just ain't happening

With outsourcing the education problem deepens because the of the dent in the taxes that support American schools.

I've been watching too much Lou Dobbs. I think I'll go get a hobby.

Re:Make yourself worth your pay?

[kcdoodle]

I am not ready to move to a third world country to compete.
Paying someone from India one third of my pay would give them a very good standard of living in India.
Maybe we should pay the CEO's their equivalent wages of a small business owner in a third world country?
Better yet, lets go to New Delhi and choose the first ~535 (or so) people off of the street and replace Congress with them. I am sure they will work harder and cheaper!
No really. What is wrong with making a good wage for a good job in your own country? The money my boss pays me gets spent in this country (mostly - I dont drive imports). When I spend money in my own country, it iunvigorates the LOCAL economy, which in turn, give LOCAL people mnore income and eventually spurs demand for more products so my company's CEO can make more money.
This offshoring is the filthy rich big business executive's way of quickly lining their pockets with money so they can cash out quick and retire.
They don't give a damn about the long term.

I am done ranting now...

I live the greatest adventure anyone could want. - Tosk the Hunted

Re:Make yourself worth your pay?

[composer777]

Try doing this in the real world, where an Indian can live on 10% of the salary of an American. It's not reasonable to expect people to somehow be able to work ten times as hard. There are limits to how hard people can work.

I agree that as Americans, we are being hypocrites by whining about our own problems if we don't at the same time address the problems of the 3rd world that we allow our corporations to exploit. Isolating ourselves, and focusing only on ourselves and our own needs is exactly what makes us so easy to exploit. There is another reason that we shouldn't allow corporations to take over 3rd world countries, it robs their citizens of the opportunities to control their own destiny. Further, the solution to this problem is not to write our congressman, and it's not inside any one country, the solutions lies in joining together with those who are being oppressed outside our country.

The problem of corporate globalization, as well as it's solution, lies outside the borders of any single nation state. It's time for us to realize this fact.

Re:Make yourself worth your pay?

[Marxist Hacker 42]

Cost isn't everything. Sometimes quality matters as well. And quite often- so does supporting your local economy even when it appears to cost you more, because in the long run it will mean less taxes for homeless shelters.

Re:Make yourself worth your pay?

[Civil_Disobedient]

...and then not passing on any benefits to the rest of the consumers.

What's worse is, while a small minority benefit from these policies, not only do they not pass the savings on to consumers, but society in general. The systems that were put in place after the turn of the century (and to a greater extent, FDR) to force beneficence from those who are lucky enough to fall into privilege is slowly being eroded by lower taxation on the wealthy and the elimination of the estate tax -- effectively, we're creating a hereditary oligarchy of extremely rich people that will only become more concentrated as the years progress.

And tho those who hold the erroneous notion that we live in a "fair" society, thus "If I make the money, I should keep the money," I ask you to consider the phrase "It takes money to make money." There is an inherit advantage to having money already, at the starting gate if you will. Lower interest rates on loans, (hell, loans in general), an easier supply of capital to pursue your dreams, better access to quality education -- the list goes on and on.

What cracks me up are Conservatives who think we should reduce programs aimed at all those "lazy poor people" because they haven't done anything to deserve them, yet see no contradiction in the "lazy rich people" who can survive on inherited wealth and never do a lick of work.

Re:Make yourself worth your pay?

[MoneyT]

So you mean, a company thought they could get the same product for less, didn't get it, lost money, and started buying their old product again? In otherwords, the people here justified their pay? Sounds like free market at work to me.

Re:Make yourself worth your pay?

[tootlemonde]

The money my boss pays me gets spent in this country...

The money your boss pays overseas workers gets spent in this country as well.

If the U.S. could just give foreign workers paper money and get foreign goods and labour in return, it would be laughing. However, at some point those paper dollars have to come back to the U.S. in exchange for U.S. goods and services. U.S. dollars have no other value than their ability to purchase U.S. goods.

What makes foreigner companies willing to accept U.S. dollars is the fact that the U.S. has things they want or things their suppliers want.

The problem is that as U.S. manufacturing moves offshore, increasingly what the U.S. has to offer is raw materials. Unprocessed raw materials, like ore or timber, or lightly processed raw materials, like refined ore or 2x4s, inherently provide fewer jobs and lower wages than manufacturing. To the extent that the raw materials are non-renewable, the economy will be in a downward spiral.

The solution is re-industrialization. Either through innovative products or streamlined manufacturing processes, the U.S. has to make products that can't easily be obtained offshore.

If nothing else, foreign corporations could increasingly buy up U.S. manufacturers. You may then see the kind of innovation in manufacturing that made the U.S. lose its lead. One can easily imagine foreign workers complaining some day that so many of their jobs are moving to the U.S.A.

Re:Make yourself worth your pay?

[Civil_Disobedient]

"...it just means the rules are the same for everyone"

Except that they're not. I'm not concerned as much about the better access wealthy people have -- who you know and the benefits that incur is pretty arbitrary and the "bitch" part about "life". No, I'm more worried about perfectly legal policies that bend the rules for those with money to make it easier for them to make more money.

Take, for instance, the example I gave about loans. A person who has plenty of equity -- through no act of their own but being born in the right family tree -- will have lower interest rates on a business or home loan than someone who's been renting all their life. My point is, even if I want to be a good capitalist, I'm still running up against roadblocks that my wealthy breathren will saunter right past.

I don't have any easy solution to problems like this; if there were one, it would have been done long ago. But what this translates to in everyday terms is something like this: if I live in New York City and want to start a business, but have mediocre credit and practically no equity, I'm seen as a liability. Which means I probably won't get a loan, which means no business, no employees, no built capital that benefits everyone.

But if I'm a Rockefeller, I can get a loan for a couple million bucks without a problem, my interest rates will be rock-bottom, then I take that money and buy some rental property, and have some poor shmucks pay off the mortgage for me.

In the first case, you have created something from nothing, and everyone benefits. New jobs are created, potentially new markets are created, all good. In the second example, you've created nothing. The only person to benefit is yourself.

I don't believe in a zero-sum system in general -- but when small-time players aren't allowed into the market, you only serve to consolodate capital into fewer and fewer hands. Instead of creating wealth, you're concentrating it. This is generally a Bad Thing for society in general, whatever political beliefs you hold.

Easy answer...

[belgar]

...stop making decisions in your purchasing habits based solely on price (aka Wal*Mart shopping), and encourage those around you to do the same. Support a heterogenous shopping environment where quality, service, support AND price are all factors in the purchasing decision, rather than the first three being secondary considerations.

The corporate mentality of cutting costs to increase revenue and profits is a reaction to the market's demand for lower prices, not the other way around. My $.02.

Re:Easy answer...

[HackHackBoom]

Which is precisely why I shop at places like Whole Foods for my Groceries and at many specialty shops for my various other needs.

Quality, Service, THEN price.

Re:Easy answer...

[MarsDefenseMinister]

I am selling a bag of grapes, fresh off the vine. These are the finest grapes you will ever see. Also, with your purchase, I will wash your car every day, as long as you or I shall live. Only 10 million dollars.

You did say quality, service, then price.

Re:Easy answer...

[gwernol]

...stop making decisions in your purchasing habits based solely on price (aka Wal*Mart shopping), and encourage those around you to do the same. Support a heterogenous shopping environment where quality, service, support AND price are all factors in the purchasing decision, rather than the first three being secondary considerations.

That's a blanket answer that doesn't hold up to detailed scrutiny. The priority of price, service, quality and support varies depending on what I'm purchasing and what my goals are. For low-cost commodity goods I care more about price than about service. Most people don't care that Wal*Mart have crappy service because they can save a few bucks on toilet paper. I don't want my loaf of bread to cost $20 because it comes with a "free" technical support phone service. But when I buy a computer for mission-critical work I care a great deal about the quality of the goods and the support services that come with it, and price is at the bottom of my list.

One size does not fit all in purchasing decisions. The great thing about a free market is I can choose what criteria to consider depending on my own circumstances and needs. I happen to shop at Whole Foods Market rather than Wal*Mart because that fits my income level and lifestyle, and I'm a fou-fou liberal eliteist. If I was earning minimum wage you can bet I'd be glad Wal*Mart was there to provide me with life's necessities at affordable prices and the quality of the service be damned.

Re:Easy answer...

[Anonymous Coward]

What's wrong with WalMart's service? I get exactly the service I want at WalMart. The employees ignore me until I go up to the register and pay, then they take my money and I go. Why would I need more service than that for the things you buy at WalMart?

Re:Easy answer...

[QuantumRiff]

The thing is, Even if you were earning minimum wage, you'd probably be better off than someone Working at Wal-Mart.. I do not shop from them, because I don't like the way they treat their employees. Bare Minimum wage, no overtime, no benefits (or if you get benifits, it costs about 1/2 of your paycheck after your taxes), no respect from management, and very, very shitty conditions..

Yes, but money is the almighty metric

[psychotic_venom]

It's easy to understand that buying cheap or from out of town or out of state causes problems with your local economy, so outsourcing (effectivly buying some things from overseas), causes problems.

But the general public will never pick up on this. They are the 5 year olds that are offered 1 oreo now or 2 in 30 minutes and they take the 1 oreo now. That's how the American public will function, and continue to function unless the media drills it into them that it's a Bad Thing and they see the tangible difference in their pocketbooks in a reasonable amount of time.

As usual

[cpct0]

This is the kind of crappy document that makes me think there is a future for our planet. No really.

This is always good to have someone say it is better for our own good to have as many jobs as we can in our own country (I'm from .ca) ... but it is ludicrous to think that companies will do things for a Greater Good. What will they do? They will want to make as much money as possible and who can blame them?

So we have outsourcing of our running shoes in these paradise islands where the only escape is 6 months of hard unpaid labor. Who think that this will NOT be the case for everything else, including computers?

In Quebec, we have doctors and graduates quitting the place for bigger bucks elsewhere in the country. Everyone says it's best not to but who to blame them when you can get 400K US per year elsewhere and 100K CDN in here.

Same thing ... saaaame thing ...

I love thinkers.

Re:Depressing trend

[be-fan]

Has it occurred to you that we're losing our edge, not because outsourcing, but because we haven't been working very hard to keep it? Our education system is in shambles, our young people are complete morons, and we as a culture pretty much revile the educated and glorify the average.

This has been a long time coming, and outsourcing is a symptom, not a cause.

King Canute

[Anonymous Coward]

It's easy to fix this, of course.

Just order the tide to roll back. All you have to do is pass a law commanding the tide to obey you, and then it'll have to comply.

It's all in 401k's

[fred911]

The baby boomers retirement income is all invested in 401k's. Social security sure can handle that generations retirement needs if their 401k's aren't flush. They're allowing todays companies to buy cheap labor to accomplish this goal.

Tomorrows economy will be servicing the baby boomers with income from their 401k's, and developing IP.

If you think their is trouble now, what happens when social security can't pay what's owed 20 years from now, and the 401k's are valueless.

Direct and indirect wage pressure

[code_rage]

According to the article, economist Jagdish Bhagwati (a former student of Samuelson) agrees with the theory but says it is not all that significant in practice. Speaking of the labor force that can compete with Americans for high-value IT jobs, he says:
"You have a lot of people, but that doesn't mean they are qualified. That sort of thinking is really generalizing based on the kind of Indian and Chinese people who manage to make it to Silicon Valley."

This may be true now, but Samuelson's argument is about whether the past benefits of global trade will inevitably continue. This has nothing to do with the current state of affairs. When you look at the structural issues, it does seem likely that outsourcing of high-value jobs is here to stay. There will probably be some slowing of the trend eventually -- it's easy for the Chinese economy to grow quickly, because it's "underutilized." But as their economy matures, it will slow down. Of course, by then, they will have taken many more American jobs.

The other issue is that even where there is no direct competition, the low cost of Chinese and Indian skilled labor can depress American wage growth indirectly. Even if your job cannot be outsourced, a general wage pressure is present, and employers will use the *threat* of outsourcing to press employees for more work.

Re:Direct and indirect wage pressure

[Pragmatix]

Actually they do not need to use the 'threat' of outsourcing at all.

All of those Americans whose jobs have been outsourced will now be competeing in the labor market. This puts downward pressure on wages.

Re:Direct and indirect wage pressure

[BrookHarty]

Even if your job cannot be outsourced, a general wage pressure is present, and employers will use the *threat* of outsourcing to press employees for more work.

That's true, we have budget meetings, and wages are always the primary concern, never the fat pork projects, or CEO million dollar bonuses, or overpaid vendor accounts. (Which CEO's seem to take jobs at that vendor later...)

The big problem is outsourcing in another country also strips money from the local markets. If you buy all the resources locally, you employ local vendors, you start outsourcing overseas, the resources are now bought overseas, you just sunk the local market, and increased unemployment. It's a chain reaction, the old wood mill goes out of business, the entire town dies.

Also, why have is a minimum wage, if you can't even get a job? Walmart is against the minimum wage because they want the lowest price, even if it hurts the environment, unemployment and forces companies to go out of business. I love how the pickle example, it shows a company can be making more products, loosing money on lower profits, and then almost go out of business due to the Walmart stranglehold.

The old saying, I'd rather have a million 1 dollar customers than 1 million dollar customer. 1 Customer can break you, like Walmart.

Re:Direct and indirect wage pressure

[Anonymous Coward]

""You have a lot of people, but that doesn't mean they are qualified. That sort of thinking is really generalizing based on the kind of Indian and Chinese people who manage to make it to Silicon Valley."

Bhagwati likes to dismiss the threat by focusing on the elite, who aren't all that common (from any country). But India and China won't have much trouble producing workers that match *typical* American workers - the kind who fill most of the tech jobs in the US.

Re:Wal - Mart

[Anonymous Coward]

I have clients (manufacturers and food producers) that are not happy several years down the road after doing business with Walmart. Walmart ends up being their largest customer and therein lies the danger for 2 reasons:

1. You are highly dependent upon a major customer, which does not make good business sense.
2. You are highly dependent upon Walmart, which has no qualms about putting your nuts in a vise to lower prices, regardless of the damage it does to your company.

So, to everyone saving $0.20 at Walmart, enjoy your shit sandwhich, you are destroying America.

Open and Closed

[Alomex]

In other words, he's claiming that lowering the prices of basic consumer goods for 280 million Americans do not justify the wage losses of the million people that work for WalMart.

Call me skeptic, but I tend to disagree.

Re:Open and Closed

[TeraBill]

Well, I think that it works like this: You get your consumer electronics made overseas and a few thousand people are displaced but millions save money. So, we feel like we came out ahead. Then you move another area of production overseas and it happens again and we feel like we came out ahead. But, if you keep this up long enough, and you aren't adding new higher-end production to our economy, eventually you turn around and see that there aren't very many decent paying jobs left here.

On the other hand, you can protect the jobs here and that will just start trade wars with other countries. Plus, it impacts everyone by raising the cost of consumer goods. We deal with the fact that not only are wages lower in many parts of the world, but so are many of the other cost of doing business. Protecting jobs in this country would likely tend to raise costs further since it would likely discourage competition for those parts of the marketplace.

And it is a problem that things are changing so much more quickly now than in the past and that requires that people be ready to shift their career more often. When cars took over from horses, blacksmiths were becoming obsolete but it took a long time and some of them transitioned into auto repair. Now, things are changing much more rapidly and the changes can be more radical.

It is a thorny problem to be sure and like most things in life, there isn't a clear good choice since it is all about trading one problem for another. I believe that one of the biggest problems in this country is the we tend to focus far to much on the short term impact of things and not make decisions based on the long run.

Just my $0.00 worth. (It's the Internet so it has to be free, right?)

Here's what I don't get...

[JayBlalock]

Ok. Businesses are constantly in competition. They're all striving to produce (theoretically) better products at lower prices. This causes competition, the best product wins, the consumers win, blah blah rah rah.

Suddenly, globalization cheerleaders are saying that businesses HAVE to be allowed to ship jobs off to overseas countries because if they can manufacture their widgets for pennies on the dollar, that results in lower product prices and more consumer spending, etc etc.

And nevermind all the people that get laid off in the process.

So why the assumption that suddenly companies have to be able to shaft their workers if they want to stay competitive? Virtually all the history of manufacturing in the world is the history of innovative PROCESSES. From the printing press, to Henry Ford's assembly line, to Wal-Mart's inventory tracking. One company comes up with a really great new way of doing business, other companies in other fields pick up on it, and everybody REALLY wins.

It seems to me that allowing companies to outsource and offshore and cut wages whenever they please is a cheat. It's a bandage. No one learns anything, no new processes are invented, there is no ACTUAL progress.

There's just a competition to see who can stream the most money into the most poor countries, often, at the same time, propping up repressive governments *cough*china*cough* that are responsible for the huge poverty (and ergo, low manufacturing costs) in the first place.

For this reason, I have no problem with so-called "protectionist" policies at all. Instead of allowing business to take the quick, easy, and ultimately destructive path, they have to actually INNOVATE - as they have so many times in the past - and come up with new ways of doing business. THAT, to my mind, is putting your faith in business.

Otherwise it's just allowing them to find creative new ways to reinvent feudalism.

Re:Here's what I don't get...

[William Tanksley]

Every advance you list as good was initially opposed for exactly the same reason you oppose offshoring. Consider how many people were put out of work by the assembly line! But the net change is that global resources are used more efficiently, and everybody is happier.

In the case of offshoring the benefits are distributed more widely than ever before, so it's not surprising that some jingoists aren't seeing them (they only look at their home country anyhow). But even the jingoists have to admit that having more people available to fill a heavily demanded need is better. Perhaps the price drop is small, but the availability of the good is much better.

-Billy

Re:Here's what I don't get...

[Russ Nelson]

The trouble with this idea is that when you allow protectionism, you give companies another way to compete -- by controlling the protectionism in their favor. So instead of concentrating on creating good products at a good price, competition forces them to compete to control the government. This is a perverse incentive, and generates results EXACTLY the opposite of what you want from protectionism.
-russ

Someone from India's views

[Anonymous Coward]

Programmers are cheaper here in India. Say an american company needs custom software written. They can either pay an american $40/hr of which the coder will only take home $25 or he can pay the Indian $10/hr of which he will take home $8. There are two reasons why we are cheaper:

1) Even if I took home the same as my american counterpart it would be cheaper for the customer because we aren't forced to put our money into crap like social security and welfare.

2) Without social security and welfare to fall back on there are many people in my country that know they have to work for a living. Hospitals will turn you away if you don't have the money up front. For this reason, we know that if we do not work we will become poor, sick, and then die young. So more people are willing to work in my country. In India if you do not work your family dies. In america if you do not work, the people who do work will give you money, through welfare.
This motiviational gap leads to an increase in the supply of Indian workers, lowering our cost.

Until America gets rid of its welfare and social security money pits, we will continue to take your jobs. Once we have taken all your jobs there will be no money in your country anymore and EVERYONE will get sick and die, not just the people who will not work.

Real cost of outsourcing.

[Anonymous Coward]

I'm a programmer, and currently I've had to take a lower paying job programming to stay in the feild. For a while I had to go back to the service industry. Now the real affect for me are that once I get my car paied off I'm not going to by another one for a looong time. I've cut spending, I don't buy all the new geek toys I want. But this extends to every thing I do, I'm less likely to go out, less likely to buy new shoes or clothes until nessary. Other people I know in this feild are doing the same. I'm pretty sure that this WILL make a diffrence in the enconomy in the long run. Companies are creating their own resession for them selfs and the rest of America.

Re:Depressing trend

[archen]

It's actually a lot like the olympics. The United States consitently fields a huge ammount of great athletes and manages to win a bigger portion of metals than any other nation. Yet the average American is fat (and often lazy). The best and the brightest in the US have managed to drag the rest of us to the top of the pile, but in the end even that can't turn the tide forever. Especially when the people at the top gut the infastructure to support such a system, for their own gains.

It's the generational gap on a grand scale (and slower). The first generation busts their ass making a living and providing for their child so that they can have a better life. The next generation goest to school and does quite well, and respecting what their parents did for them. The third generation sits on their ass and always had it good, and isn't particularly interested in working hard or going to school.

Re:Depressing trend

[MattyCobb]

Has it occurred to you that we're losing our edge, not because outsourcing, but because we haven't been working very hard to keep it? Our education system is in shambles, our young people are complete morons, and we as a culture pretty much revile the educated and glorify the average.

Oh yes. The US education system is just god awful. Worst in the world. Terrible even! Same with the rest of the wester world! Thats why everyone wants to come over here to go to Harvard or Yale or MIT or Oxford or Stanford or even our high schools. Oh and we haven't been trying hard either. God knows NOT A SINGLE PERSON in the US innovates or starts a new company or attempts to advance technology anymore. Pfft. Way to troll!

If outsourcing is a symptom of anything its corporate greed. They can save millions by paying unintelligable people to stumble along with english over the phone and have their customers take it up the arse. It has nothing to do with education. Its economics... which I belive is what the article is about...

The problem can be fixed

[mysterious_mark]

First of all brilliant article by Prof. Samuelson. I've long recognized that the assumptions used by the pro-outsourcers to be flawed, the Keysian model that assumes a free flow of labor, and capital, that does not account for immigration laws, environental impact, and tax structure. A recent survey indicates that companies who use outsourcing are only saving around 20 to 40 percent, if they save money at all. This is roughly equivalent to the de-facto tax breaks obtained by outsourcing in avoiding payroll taxes. In other words the only reason anyone on average saves money outsourcing is because they avoid US payroll taxes. One would think that the current administration would be concerned about the loss of tax revenue, instead they have proclaimed that outsourcing is all good, and the lack of tax revenue is irrelevant because according to the VP 'deficits don't matter'. The good news is the outsourcing problem could be easily addressed by repealing the tax break, and forcing companies to pay taxes on outsourced labor. At least Senator Kerry claims he will address the outsourcing issue, if he is sincere, I'm sure there are things that can be done to change the tax structure to at least improve the situation. We can all go out on Nov 2 and vote to fire the current administration who financial recklessness threatens us all, and who's mantra seems to be 'Outsourcing is always good' and 'deficits don't matter'. M

Said it before, will say it again

[FerretFrottage]

America [US] is becoming land of the mediocre by the decree of our own government.

"No child left behind" means no child gets ahead. Sure there are exceptions, but my wife who is a teacher has to teach to the lowest common denominator. It frustrates her because due to "social promotion" she has 7th graders who can't read/write at a 4th grade level. Now imagine being an above average student in that class where the teacher has to talk "down" to and teach to the "slowest" kids. Due to budget cuts (hey, tax cuts don't come for free), after school clubs and honor level classes are being trimmed if not entirely cut so many of the "smart" kids are being taught at a 4th grade level/pace since there are no classes/teachers for them. No wonder they lose interest in school and just start reading /. .

Re:Said it before, will say it again

[CommanderData]

Yes that is a big problem. My wife's oldest son (from a previous marriage) came home after school this week and complained that it was soooo booooring. When asked why we found it was because they are re-hashing the same stuff over and over for the idiots out there. There's no challenge at all for kids who could benefit from it.

I think I must have lucked out when I was a child. I had a computer programming class back in the mid 80s. I'd already taught myself a lot prior to that. The teacher was able to see that when he'd assign a task for the week and I'd be done in 10 minutes. Instead of forcing me to continue doing the same classwork / homework as everyone else, he would "challenge" me to create programs to do various things like evaluate expressions typed in as strings, and so on. By the end of that year I had created an entire graphical "paint" style application with mouse control, and drop down menus that ran in DOS from 5.25 floppies. Nothing like it was available at the time for IBM computers, I had to use interrupts to get data from the mouse!

Now that this post has drifted off topic, I'll close with a thank you to Mr. Roberts for giving me that time to explore and grow instead of being beat down to the lowest common denominator level. It meant more to me than you'll ever know.

Re:Depressing trend

[hopemafia]

You've hit this one right on the head....

And it isn't just a US issue, it's occurred throughout history...because it is simply a matter of human nature.

When a culture has to struggle to survive, there is motivation to work hard and think hard, and this (combined with some good fortune) makes the culture thrive. Then, when the culture becomes wealthy and comfortable, they get lazy and greedy and sit on their asses, usually until disaster stikes and the culture collapses. This is the reason that the rise and fall of civilizations is cyclical.

The trick to having a long lasting "up" phase is to catch the early signs of the downswing and get your collective asses in gear before it's too late. For the US, whether that happens is still to be seen, but so far what I've observed is people sitting around complaining about "rights" and "entitlement" rather than doing anything.

The Next Big Thing

[Solder Fumes]

Look, we're just the unlucky ones who are caught between waves. America leads the world in general technology advancement. When the rest of the world catches up, we let them do that job and move on to something bigger. It happened with textiles, it happened with machining, it happened with electronics. Now it's happening with knowledge work.

Screaming bloody murder about outsourcing is just saying you want progress to stop. You don't want the rest of the world to catch up, you want to stay in your sweet spot and not have to learn any new skills. I for one don't want our current state of technology to be the end of all progress. Think. Invent. Expand. Let the other countries do the repetitive programming and design jobs.

I believe this in spite of having been unable to find a permanent engineering job for two years. It just that no good thing lasts forever, so you start looking for the next good thing.

Waltmarting America

[Kefaa]

Did you notice that the people who finally speak out for/against a policy generally wait until they are no longer impacted by it?

Today the globalization hounds must beat the drum that globalization is good. Innovaton is lost and companies cannot figure out how to make a product or service more valuable so they make the cost of providing it cheaper.

In 1820 transitions occurred over time. To become a "global player" it took literally decades to move an industry to that level. During that time the industry workers transitioned. In current examples, the transition will occur in less than a decade. With Y2k,and the internet we built the infrastructure to make transition nearly immediate.

Now, add countries that would like the US work, but do not share US values. For example, India while more than outsourcing jobs, runs one of the most protectionist regimes in the world. Try, as a non-Indian to start a business and you will be kept out at the government, economic, and even social level.

The idea that we should not protect ourselves against such countries is ludicrous. This is like saying we should not stop terrorists because, by us not being terrorists they can see the benefits and will become outstanding citizens. (What drugs are these people taking?)

In the end, we are replacing 65K+ jobs with 30k+ jobs. Samuelson is correct ""If you don't believe that changes the average wages in America, then you believe in the tooth fairy," It does not take an economist to figure out that with only half the wages, the impact is on the entire economy. Two income families that bought two cars, can only afford one, or certainly not two new cars. Home buyers that had combined incomes of 130k, now have 70k to use as their financial base.

Depressing, or Encouraging? Get used to it.

[Cordath]

The West certainly hasn't lost any of it's skills or expertise. It's developing countries that have, well, developed! The West may have blazed the trail for our current world economy, for good or for bad, but it was only a matter of time before other countries started catching up. Unless artificial market restrictions are employed this trend will see the wealth of the world spread out over more and more nations rather than concentrated in just a few. While it may suck for the West, it's good for the majority of people in the world.

The only question is, how do we deal with this? Do we throw our hands up in the air, say we had a good run, and walk quietly off into the sunset? Do we impose artificial trade restrictions that turn us into hypocrites? (Yes, this is the current tactic. It's already being done. Free trade is great so long as you're more free than the rest.) Our best bet is probably to try to compete better by improving our education system and finding new ways to encourage research. (Read: Overhaul the cumbersome copyright/patent system so you don't need a team of 20 lawyers and a fat bankroll for bribes in order to invent something remotely useful.) So long as we're ahead on the tech curve we'll get business. Unfortunately, other countries can do this too and they just happen to have a lot more people than we do.

Yep. It sucks to be the West right now, but it does give one hope for all the backwards shitholes on the planet. How you feel about all this depends entirely on how selfish you are I suppose. Ask not for whom the bell tolls and all that.

A good trend

[ColourlessGreenIdeas]

For the last few centuries the west has been living off the cheap labour of the rest of the world. But now increasing parts of the rest of the world seem to be breaking free and are able to earn enough to live with some dignity. Whether or not this change is of our choice, this will force us to live like truly civilised people, not like feudal lords who've come up with the clever trick of hiding their slaves on the other side of the world so that we can more easily pretend we live in a world of freedom and plenty.

Re:A good trend

[NoMoreNicksLeft]

Uh, wrong. The desire for feudalism was never the common man's... read this

This is about turning the non-serfs in the USA into serfs. You can't be a feudal lord, if there is a large middle class, as have existed in the US for a long time now. Unfortunately, those causing all this are hiding in the obscurity.

Capitalist defined...

[code_rage]

I think Marx said that a capitalist is a person who will sell you the rope with which to hang him.

Outsourcing also inevitably results in skill erosion here in the US and skill development overseas. For example, if you outsource a software job by lobbing a requirements spec over the wall, just reading that requirements spec gives the vendor a better idea of the sorts of skills and ideas needed to do it themselves next time.

So, the split incentives of capitalism may result in general losses in economic value. That's why the economy is regulated. (Samuelson did not prescribe protectionism, and I don't think that's the right answer in low-skill areas, but perhaps educational subsidies and R&D credits, etc.)

Thoughts on internationalization over coffee.

[Greg@RageNet]

I'd like to type out how bad I think this internationalization stuff is for the US economy as I sit here in a cafe sipping columbian coffee made in an italian coffee maker poured into a chinese mug, while typing on a japanese laptop connected to a tiwanese access point. Oh, I just forgot, I left my norwegian cellphone in my german car in the parking lot. Be right back!

-- Greg

Re:Depressing trend

[Mateito]

Where do you buy your groceries? Do you always buy "made in America"? Do you drive an American Car? Where are your computer components from?

The US is an expensive country with great opportunities, but people see cheaper prices overseas and think "I should pay less too". So they do.

This has a knock-on effect. In order to compete, retailers have to lower prices, which means manufacturers have to lower prices. If an manufacturer doesn't lower prices, the retailer sources off-shore, because if they don't, the hungry American consumer will go somewhere else and buy from somebody who will.. eg Wal-Mart.

Suddenly, all the local manufacturers are out of business, laying off US workers. People start complaining about the off-shoring of jobs, but they still want goods at the lowest possible prices... because without a job, they can't afford the more expensive alternative.

Unless the US consumer is prepared to pay the premium for the locally made goods to protect local jobs, the effect of globalisation will be to pull US standards of living towards (note the relative sense) that of the countries who make the goods that the consumers.. err.. consume.

Same has been happening in Australia for years, and will soon happen in Europe now that many "poorer" countries have joined The Union. On average, everybody is better off, but part of that is that the people at the top off the food chain will be worse off than before.

A healthy (large) society must support diversity

[behindthewall]

I will RTFA after work hours, when I have time. However, most of the discussions and comments regarding outsourcing and regional specialization miss what I find to be an essential point.

Human beings have diverse sets of abilities, let alone inclinations, that support our complex social structures. Not everyone can do everything themselves, especially as society has grown more complex, and so we've developed individual specializations that allow complex social structures to be supported, with all the benefits these supply. Doctors can be such good doctors because they don't have to tailor all their own clothes, let alone grow and harvest the cotton, sheep, and oil wells they come from.

And this is not just reflected in the "elite" we all envy. There are extroverts who want to be face to face 24/7, and introverts who would like a private office, or to work by themselves out in a field. There are those who are extremely verbal, and those who are extremely visual. Those who are a whiz with a contract, and those who can keep even the most decrepit machine "alive" almost by intuition.

As we shift jobs over national boundaries and overseas, we disrupt the balance of work within a society. The jobs move, but the people are not free to follow them. Further, we essentially sell out the rights of people performing those jobs by moving them to locations where those rights don't exist. We've all heard about the labor practices in China and many other countries where manufacturing has grown. Even if a U.S. manufacturing working could move there, there would be strong disincentives.

With all this talk of "retraining", I become frustrated. Even were it to be effectively supported, not everyone is cut out to be the banker or lawyer that some think this country should become full of. 30 years ago, we needed a lot of manufacturing capability here, and people who enjoyed doing that. 50 years ago, the family farm was still a mainstay of society.

These aren't just a matter of training. They are also a matter of basic personality (whatever the details of defining such). And such things don't just change overnight, or in the span of one generation. There are people of a different mindset borne into this society who, by our very laws, deserve a place within it.

It's on the collective backs of all of us that the "elite" have become the elite. Some of them may be very gifted, in ways that are ostentatiously rewarded. But they didn't achieve this glory on their own.

And yet, we divorce ourselves of much of the infrastructure supporting those less "glorious". And we expect this to have no serious repercussions? It is a breach of social contract.

And before you say "who cares", laissez faire, or Darwin, see how long you survive when the garbage piles up into a health hazard. Or when those with no future decide that yours has been achieved at their cost. With nothing to lose, things can get very ugly. As they have in the past.

Or, see how long it is until the rest of the world realizes they don't need American bankers and American lawyers. As their social structures solidify, especially their legal codifications, ours will become superfluous.

A healthy society is one that is sustainable. What we are creating is not.

The world will get by, in the long run, but this country may become, in the meantime, a far different place, and one far less reflective of the ideals too often used as a blind in selling this shortsightedness.

Re:Depressing trend

[Kaa]

It's interesting to note how many successful entrepreneurs in the US are immigrants, or first generation children of immigrants.

Well, that's natural. Think about it -- immigrants are the people who were smart enough, active enough, entrepreneurial enough to leave their country and move to the US. Is it really surprising that they tend to do well?

Re:Depressing trend

[Paulrothrock]

Suddenly, all the local manufacturers are out of business, laying off US workers. People start complaining about the off-shoring of jobs, but they still want goods at the lowest possible prices... because without a job, they can't afford the more expensive alternative.

However, we're at a disadvantage. We have 150 years of unionization and improved working and environmental conditions, not to mention a respect for human rights. If the Chinese had to respect their workers and their rights and their environment, products would be a lot more expensive.

If we're going to export jobs, we should also be exporting unions, and demanding that our trading partners respect the human rights of their workers. Which is worth more to us, freedom or money?

On average, everybody is better off, but part of that is that the people at the top off the food chain will be worse off than before.

Not people at the top; they're the ones who own the companies and get all the profits. The people who are worse of are the middle classes of first-world nations, particularly the lower-middle class who does all the factory work.

Outsourcing = Giving Away Money -- YOUR Money

[soren100]

If anyone really believes in outsourcing, check out this logic:

1) Forced removal of job
2) ?
3) ?
4) Profit!!!!!!

Notice how the CEO / Executive crowd are all getting their taxcuts NOW to "stimulate the economy" while you have to give up your job and retrain for a new career for some imaginary profit later (5-10 years later? It won't be tomorrow!) Note that this is through your own sweat and worry and hard work.

Greenspan and the others pushing this outsourcing believes that the country has to go trillions into debt to finance the taxcuts *now* rather than rely on the same "innovation" that is supposed to finance YOUR pocketbook.

That's why Samuelson's "toothfairy" reference is such a good one. Only in this case it's the "innovation" toothfairy that's supposed to bring the profit. If anyone believes in innovation so much, I'm sure that they won't mind giving me their car so they can "innovate" another one later?

Re:Depressing trend

[MadMorf]

Our education system is in shambles, our young people are complete morons, and we as a culture pretty much revile the educated and glorify the average.

OTOH, has it occurred to YOU that maybe our kids aren't applying themselves because they don't see a future for themselves?

BTW, if you REALLY think all our young people are complete morons, you obviously haven't spoken to one lately.

Oil, it's always who's got the oil....

[zogger]

What's helped the USA the MOST is having access to cheap oil. Most of that other economic stuff is academic masturbation. Not all of it, but most of it. We built up our economy after WW2 with oil at 2-4$/barrel IIRC. Once our domestic oil got marginal and expensive, we switched to getting oil at cut rate prices from ridiculous dictators on the take and "royal" poobahs overseas. Everytime one of them guys get's the wise idea that they are better off charging a better price or actually using their own oil domestically-or not using the fiat FRN as the currency that is acceptable, we send in the boys with the guns and get a new poohbah in there. Either the spooks change it or the overt military changes it. Look at Saddam, as long as it was swap or oil for US petrodollars, he could do whatever he wanted to do, for years. As soon as he started to insist on Euros, WHAM! All of a sudden he's this big threat, etc,poof, new war, he's gone. One of them amazing coincidences that really isn't.

I know this doesn't address outsourcing per se, but it's the biggest factor in helping to keep millionaires as millionaires. When even relatively cheaper oil wasn't enough, they only had two choices to keep their profits up, ship off the jobs they could to much cheaper labor place, or get another source of cheap oil. Now that there really isn't any more cheap oil,no place, there's not much more they can do. They are certainly not going to go personally broke or give up their personal jetliners and multiple mansions jazz. That leaves sticking it to the middle class here domestically, and using the stock market casino scam and normal partisan politics to keep people faked out that they can get rich, too, sometime in the future, or that it's "the other party's" fault. Heck, they even sold credit as pay to people, and they bought it, people have actually switched to the notion that being in perpetual debt is somehow accumulating wealth. Just an amazing bit of propoganda and brainwashing.

It's an admirable scam, well thought out, well implemented, seems to be working well for the globalist "elite" boys. I keep wondering when Joe and Jane sixpack will notice. Most don't until they go broke, and the more well off they were, the harder it will hit them, the ole cognitive dissonance sets in. Each of them will vote for the globaist scamster skull and bonesman of their choice, and whomever gets in, Joe and Jane will just get broker, but blame it on the OTHER globalist bonesman and the OTHER globalist party.

No one is TAKING your jobs...

[ttys00]

... your CEOs are GIVING them away. Don't get pissed off at an Indian or Chinese IT worker, they got offered your job and they took it. What, were they going to say "no thanks, an American should have this job"? Its your countrymen that are doing this to you, not some phantom job thieves overseas.

fnord!

[Anonymous Coward]

For God's sake, someone PLEASE mod the parent down.

You should not be saying things like that. You might disrupt the master plan.

The vast majority of people are content to be placated and manipulated for the benefit of an elite few. People are told what to want, told how to get it, and told to buy into a system which essentially keeps them enslaved to their own mediocrity. For the most part, they obey.

If you go around pointing out how these things harm them, they might start thinking for themselves, might become discontented with their lot in life, and might start disobeying their televisions. Do you realize how disastrous that would be? Don't you see the turmoil it will create? Not only will those who have maintained power for generation after generation wind up losing everything, but the people will bring upon themselves much chaos and suffering.

Be silent.

Re:Depressing trend

[mrtrumbe]

You can also take a drive through many immigrant neighborhoods in our major cities. They are all slums, and not a single immigrant group today understands cleanliness and exhibit no pride in their new home. How much money does it take to sweep the sidewalk in front of your apartment?

...

I unfortunately do live among them, and witness their uncivilized and barbaric ways on a daily basis, so spare me any response that suggests I am being anything less that completely honest.

OK, I can agree that many (most?) immigrants are poor and uneducated and this results in increased crime, etc. But these two paragraphs are such utter bullshit it makes me want to scream.

Come to Chicago and walk through Pilsen, the Chinatown in Uptown, Devon avenue (through the Indian, Pakistani and Jewish communities), the West end of Ukranian Villiage or Wicker Park, or Polonia. Given your outlook on immigrants, you could use the education. Those communities are built mostly on immigration and have thriving local economies and are pretty safe. Sure, there are *some* rundown houses, but the neighborhoods are relatively clean and well-kept and there are many neighborhood watch programs and a sense of community.

Then, when you've had a taste of Chicago's immigrant communities, walk through the projects on the West or South sides. These are inhabited mostly by US citizens. Believe me when I say you'll notice a difference.

Finally, notice the current trend in most US cities where immigrants are increasingly moving to Suburbs, rather than in the urban center. In the Chicagoland area, this has created mini-booms in many suburbs, where developers put up multi-unit residential rentals along the commuter tracks in the suburban centers. Rather than tearing the communities apart, it has resulted in a bigger suburban economy and given immigrants cheaper residences outside the city. Not to say there haven't been problems, but not to the level your post would imply.

To sum up: the quotes I took from your post are the worst type of generalization. They offer only a blind dislike for foreigners and offer little in the way of reality. Barbaric? Unclean? Who, exactly, is succumbing to popular mythology.

Please.

Taft

Re:Depressing trend

[Anonymous Coward]

"some unskilled person outside of my country."
^^^^^^

Wrong assumption. Just because you are emotionally attached to your father-in-law doesn't make the man getting the job overseas as UNSKILLED.

When people in the western world realize that the rest of the world has more or less caught up on technology and is ready to do stuff for cheap, we'll be able to solve this problem.

Wrong assumptions lead to wrong answers, let's not make them.

Re:Flying machine are wonderful in theory....

[Russ Nelson]

The trouble is that socialism doesn't work in theory, and it's proven to not work in practice. Not to mention the social justice aspect of USING VIOLENCE to COERCE resources from one party to the benefit of another. I understand that many people have no problem using violence. I happen to think that it's wrong, and pollutes any end sought.
-russ

Re:Offshoring still has failures

[PantsWearer]

This is a bit short sighted. Not entirely, but somewhat. It's great that you're needed on site, as am I in my job, but what happens when "on site" is actually in India?

There will always be IT service jobs that require on site service (McDonald's needs to have IT support to sell burgers, hospitals need their systems maintained, etc.), but when we talk about product development, it can be done anywhere.

The IT industry will slowly become like the US auto industry. We don't actually make cars in the US anymore, we just assemble them, the majority of the parts are prefabricated and shipped in from cheaper manufacturers outside the US. Just like Honda and Toyota.

The software doesn't need to be written here or managed here. Right now we sell software written in English translated for other languages, it's no harder to do the oppposite.

The only software would be nearly have to be written locally would be for various US governments, especially those that require clearances unavailable to foreign workers.