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Study Finds Cost Major Factor In Outsourcing Positions
theodp writes "Debunking claims to the contrary, a new study from Duke University asserts that it is purely cost savings, and not the education of Indian and Chinese workers, or a shortage of American engineers that has caused offshore outsourcing. 'The key advantage of hiring Chinese entry-level engineers was cost savings, whereas a few respondents cited strong education or training and a willingness to work long hours. Similarly, cost savings were cited as a major advantage of hiring Indian entry-level engineers, whereas other advantages were technical knowledge, English language skills, strong education or training, ability to learn quickly, and a strong work ethic.' The article goes on to point out that despite this, outsourcing will continue to be a problem for US workers in coming decades; new elements of traditional corporations like R&D may in fact be next on the outsourcing chopping block."
And as a result we're over worked, under paid and have a greater than 50% divorce rate while our kids are left with a TV screen as a babysitter and our family structure is collapsing in favor of a nation of single people too self absorbed to take time off to form some basic social connections.
I'm sorry but "work work work" isn't what I would call a great existence. If you want it fine, but don't call me lazy for actually wanting to live a life I only get once chance to live.
If corporations can outsource labor, why can't I outsource purchase?
Software developers put stipulations on resellers that they can't sell to certain countries.
Video games and DVDs are region coded to make foreign-purchases difficult to use
Buying medicine out of the country can get me sent to prison
They have their cake, and eat it too. Then kick us in the balls for good measure.
this is typpical supply side strategy, the problem is when you attack wages rather than other inputs as cost, it also attacks the biggest contributor to both profits and GDP, consumption!
2 basic economic equations are in play here:
gdp = C+I+G+NX = (income - savings)+I+G+NX
profits = costs - revenue = (wages + other costs) - (wages + other income such as capital gains)
when you kill wages/income, you kill your own profits as well as us gdp.
there is a time lag involved in this, but it comes back to bite you pretty quickly.
this is reflected whenever Reagan style policies (not exclusive to the republican party) are put into effect... there is always a recession a short time later, which is alleviated once the policies are countered/rolled back.
right now congress is STILL operating on the myth that there are short supplies of labor in "X" sector, which is bull, what there is is a shortage of cheap labor who dont care about long term benefits or retirement in sector "X"
plenty of on the ground info on this here
VLC FOR MAC IS DYING! IF YOU DEVELOP, PLEASE SAVE IT!!
You're missing something.
t he_Golden_Eggs
The amount of wealth in the world is NOT like a tank of water which, when the valves are opened, empties out and distributes the water all around. It's more like a large set of fountains fed by a small set of pumps. And corporate America isn't opening valves to let the water (money?) flow all around. They're taking sledgehammers to the pumps because they stupidly believe that by doing so, they'll get more than their fair share of the water. For the first few hits, they get doused pretty well, and they think "look at all this water! Hit it again!" But then the pumps shut down and that's the end of that.
Wealth is actively created by some groups of people and consumed by others. The United States is so wealthy because for most of this century we were CREATING much more wealth than anyone else in the world. We were able to do this due to a number of cultural and structural factors that aren't replicated anywhere else. For example, among all the people in the world, we are easily the most independent minded, the least bound by dogma and tradition (at least when it comes to science and technology). Our inventors have a "what the hell, let's give it a shot" mindset you won't find in many other places.
And before you start screaming "No, your innovators call came from Europe" let me state the obvious: WE ALL CAME FROM EUROPE. Americans are Europeans who decided to live somewhere else. We didn't just magically appear here; we colonized this place. Europeans may not want to hear this considering the unfortunate current state of the U.S. government, but we and they are the SAME PEOPLE, with the SAME CULTURE and SAME INTELLIGENCE LEVEL. The only discernible difference between Americans and Europeans is that Europeans try to behave more calmly than we do. We're a bit nuttier than they are. EXCEPT at soccer matches, of course.
If you want a perfect analogy for what's going to happen when corporations finally kill off technological innovation in the first-world countries, or at least strip people of the desire to do technical work for them (I don't think you can really kill off our ability to innovate, you'll always have inventors) just read this article:
http://en.wikipedia.org/wiki/The_Goose_that_Laid_
NO CARRIER
"If the Chinese and Indians are smart enough to deliver the quality of R&D American companies are expecting, they're also probably smart enough to set up their own companies"
Indeed they are. A Duke University study released in (I think 2005) concluded that over the previous decade, about half of the startup companies in Silicon Valley were founded or co-founded by folks from China and/or India.
The story is right on about cost savings as the driving factor. The perception that people in China or India are "smarter" than people in the U.S. stems largely from the fact that we are typically being exposed to the very best people coming from a pool of billions. With that many people, the absolute number that are 2 std. deviations on the right side of the bell curve is still massive.
I'm a westerner living in India, and my opinion of the place & the people pretty much exactly matches what you've written. I've had to spend a lot of time building a really good team, but now that team is at least as good as any team I've worked with at home, twice as hard-working, and, yes, hugely cheaper.
And no, India hasn't reached its full potential yet. The two main issues that are likely to prevent it are the politicization of the education system as commented on in TFA (Karnataka, the state Bangalore is in has moved to prevent English being the primary language taught in schools in order to win votes with the the rural majority who have been opposed to the enormous growth in the cities as it has stretched even further the gap between rich & poor), and the hyperinflation of salaries. There's a good chance that India will become too expensive to operate in before it reaches that potential.
ant.