Slashdot Mirror
IBM, Other Multinationals "Detaching" From the US
theodp writes "If you're brilliant, work really hard, and earn a world-class doctorate from a US university, IBM has a job for you at one of its US research sites — as a 'complementary worker' (as this 1996 piece defined the then-emerging term). But be prepared to ship out to India or China after you've soaked up knowledge for 13 months as a 'long-term supplemental worker.' Newsweek sketches some of the bigger picture, reporting that IBM, HP, Accenture, and others are finding it profitable to detach from the United States (even patenting the process). 'IBM is one of the multinationals that propelled America to the apex of its power, and it is now emblematic of the process of creative destruction pushing America to a new, less dominant, and less comfortable position.'"
Instead of blaming them for leaving, why don't we stop chasing them away?
They are multinational corporations... what kind of national loyalty are we expecting from them?
They behave exactly as legislation allows them to behave. If you don't like it, change the legislation.
Large corporations are not good citizens and care little about the welfare of the nations that created them. I've heard them described as sociopathic is nature, which is probably quite an accurate description. They rarely have any long term vision in most cases and only seem to look a quarter or two ahead to make investors happy. Limiting their greed just slightly compared to their competitors might earn some good will in the future, but even that seems to be beyond most corporations.
The Egyptians complained about the English "stealing" their cotton spinning and weaving business. The English complained about the Yankee New Englanders, who complained about the Southerners, who complained about the Mexicans, who complained about the Malaysians who are complaining about the Chinese and Indians.
When I say "complained", I mean passed laws and regulations, imposed sanctions, taxes and duties, fought wars, battled smuggling, and whined.
In the long run, the laws of econonics ALWAYS win. The US should fix the causes, not the symptoms.
Prove anything by multiplying Huge Number times Tiny Number
I recommend reading a book called "IBM and the Holocaust" (http://www.ibmandtheholocaust.com).
This is a company that happily accepted huge sums of money from the Germans during WWII to computerize the process of hunting down and exterminating Jews, and even "hardened" several of their facilities so they'd survive Allied bombings. All the while, they claimed to be an American business.
It's arguable that in a sense, they "left" the United States back then, even if they still retained a big physical presence here. Despite the law preventing IBM from being able to move their profits out of German banks during the war, they STILL happily worked on their projects for them, knowing full-well they couldn't even touch the money for years.
The fact is that Obama is a redistributionist who claims that jobs are owed and not earned. Sorry, but that kind of attitude is what's driving employers away from the USA. You wish you had a girlfriend/boyfriend? Then make yourself appealing, so that someone will want to hook up with you. Don't go talking about how having a significant other is your inalienable right, somehow owed to you by society or other unspecified parties. You wish you had a job? Then make yourself appealing and more competent, so that someone will want to hire you. Don't go talking about how somebody else is "stealing" "your" job, as if a job is somehow owed to you, regardless of how incompetent you are.
Obama is consistently talking about "American jobs" as if the jobs are rightfully American. His political stance is well known to be re-distributionist. Start earning, and stop whining for a handout.
This is what our factories have to compete with. Plants which poison children.
http://news.yahoo.com/s/ap/20090820/ap_on_re_as/as_china_lead_poisoning
Laws that protect us from this kind of behavior add costs that push companies to these countries.
Democracy isn't cheap.
I hope the "we" you are talking about isn't the US. We actually have one of the highest corporate tax rates in the world.
Perhaps Google would have helped you a little.
Because the stuff that's "chasing them away" is the same stuff that still nominally keeps the American people from being totally subjugated and destitute like the Chinese and Indians are.
What makes you think that's achievable? Americans are competing with Chinese and Indians. What possible reason would there be for anybody to pay more to an American worker than to a Chinese or Indian worker?
Companies aren't going to stop leaving the US until we are so broken by their flight that we are forced to become fascist.
Companies don't care about fascism. We just need to become cheaper, or we need to help Chinese and Indians become rich.
Isn't the real fix that we improve the countries they are outsourcing to until the economy there demands the same as US salaries? At that point geography becomes the benefit instead of dollars and they want to hire the guy closer to "home."
-Xen
Actually corporations owe the public a lot.
Incorporation's primary purpose is to shield those who make the profit from the consequences of their company's actions. If this legal shield is ever removed we can start talking about everybody being on their own but it's absurd under current law.
Well, let them all move to India/China/etc, then.
Let them move to countries that rely more on rote memorization of facts, and little in the way of independent thinking. Let them move to countries where the employees could feed themselves for a year by stealing a few pieces of their product. Let them move to countries where the government could very well decide that the company isn't pious or nationalistic enough, and take over their assets.
America has many great and successful companies for a reason.
It's hard to put a dollar amount on how much money will be lost by them moving overseas, but I guarantee it'll be a net loss. I look forward to hearing some CEO's say, "Well, we had record profits this year, but no one can seem to actually find any of this money, and we can't even pay rent on some of our offices anymore!" Metrics aren't perfect, and no one with a marketing degree or above the level of middle management seems to know that.
Job? I don't have time to get a job! Who will sit around and bitch about being broke and unemployed then?
I find the fact that corporations such as this, especially in a time of economic hardship, are basically harming american workers and showing such contempt for the USA, to be greatly offensive and angers me to no end. i think its time that we detach from china and india which has basically decimated Americas economy and who have stolen our jobs. I think its clearly time that we need to stop allowing these companies to abuse the USA looking at it as only a market to sell their overpriced chinese crap, and start creating jobs here again. Globalisation is such a big scam its ridiculous, its destroying this countyr and allows these greedy companies to basically exploit slave labor in china. The US should and can, and must for its survival, implement a tariff on imports of cars, textiles, furniture, IT services, customer service calls to India and China, etc, and so on. When we have 15% unemployment in reality and people struggling to find work the notion of any company moving jobs somewhere else really should cause a revolt from americans and demands to implement tariffs. Its time to get past this irrational hysteria about tariffs. Tariffs are good and can help this countries economy rebound. There is nothing wrong with it since it simply allows americans to make products for other americans. Think about it, why cant the chinese make things for other chinese, and americans make things for other americans. it would be better for the chinese of the products that chinese workers stayed in china to benefit to the people there. It would be better for americans to create more jobs in the US making products for use by americans. The only people that globalisation benefits is the wealthy rich elite corporations who important products made by employees in slave labor camps in china making a few cents an hour, living in filthy dormitories, who are treated in the most inhumane way, beaten, and even not allowed to use the restroom, with litany of human rights abuses, the products these slaves make are then sold off at a 100% markup in the US and the wealthy elite take the profit. Both the american and the chinese worker are the losers. Globalisation is what has allowed as well corporations to basically dictate to countries basically how they will treat workers and the environment and rewards countries which allow their environment and workers to be ruthlessly exploited by massive global corporations. This is a system where massive global corporations get their way and make the laws through making countries compete against each other to see who can allow their employees to be treated in the most inhumane way. Through the global consolidation and globalisation the corporations are able to control markets resources, jobs, and so on in many different countries and operate as sort of transnational governments. Through this we are seeing a new world order emerge where the governments of countries are simply puppets of a powerful fascist global corporate order who controls wealth, resources, jobs, markets, capital, etc.
If we value our freedom, we need to implement tariffs which would give our own worker welfare laws, our own democratic state, some force and allow us to implement unions without the corporations threatening to move jobs to other countries. If you want to be treated like a decently like a human being, to have a good life and to be paid decently for decent work, we desperately need to implement broader democratic unions which allow employees a democratic vioce where they can act as a safeguard against mistreatment and slave wages. Unions are essential to our economic recovery and for stopping the destruction of the middle class. The unions built the middle class in the USA and ironically created a middle class that had the spending power which made companies like IBM so successful. Unions are essential for workers to have decent wage since it more often than not is the tendancy of corporations to pay workers as little as they can, leading to a vast impoverished state in the economy. Its just shocking and disgusting tha
As if US corporations ever actually pay anywhere near what the rates actually are - any corporation can find innumerable tax loopholes while setting up offshore holding companies to cut the effective rate down to nearly nothing. Goldman Sachs paid an effective 1% tax rate in 2008, many US corporations manage to get an effective rate of 0% and pay no taxes at all. I'm all for reducing corporate tax rates, if the loopholes are closed so that the rates set down have some actual fiscal meaning.
I think this idea of a lack of engineers with "valuable and unusual skills" in the US is more myth than reality.
The primary value that the H-1B program has for companies is economic. If you convert these workers to citizens, you'll have to pay them competitive wages and they'll be free to change jobs. Not much economic value there.
It's funny how people complain that illegal immigrants are cutting to the front of the immigration line but there's always a place for athletes, actors, and celebrities to go to the front. Of course, there really isn't a line anyway.
I don't blame the consumer. I blame the people who wrote the trade laws that allow for slave labor to have equal playing field. Those trade laws completely destroy the fundamental American principle of freedom.
I blame the trade laws which basically guarantee that if you build a product in a responsible manner, it's not going to succeed, because the people who ignore environmental and safety standards can build it cheaper.
Look I am an Indian, and I think that there are a few things all of you need to know.
America is not going anywhere for now. The fundamentals of your future lie in the hands of your people, especially the select few who have a vision and can buck the status quo. As long as you have plenty of such individuals you are going to weather any geo-political storm.
Whereas in my nation life is so linear that it is a goddamn joke.
Almost every kid is expected to be an engineer and most of these engineers hardly even know what the hell they are talking about. As Feynman would say their knowledge is fragile.
Our educational system itself is a joke. Trust me on this.
At the same time entrepeneurs are discouraged and looked down upon. They are sorta treated with ice, as everyone wants a *son* in an MNC with a prestigous MBA. So, basically our society is choking itself. Sure, these people are awesome paper pushers, but despite the fact that some of them do have a decent brain they all seem to fail to do anything different.
No revolutions are put into motion. No brilliant new synthesis are formulated. No groundbreaking patents are filed. In short, the truly important stuff is in stasis.
Your society whereas pushes its outliers and that is why, as Kay once put it, most software is written on one side of the atlantic. I think that you should stop looking at IBM and start looking at MIT. That is where your future lies.
And seriously drop all of that economics mumbo-jumbo. As the foundations of society are the ability to create things, transport those things and dessiminate them. I think that those earning a living by making a killing in stocks are living a sham.
Oh and Thomas Jefferson would kill himself if he saw Bush in action. Despite his failings Obama is, at least, a breath of fresh air. So, value him for that. At least he had the courage (unlike me) to step up to the plate.
P.S. - /.s javascript is screwed, haven't they heard of simplicity?
In 2007, Exxon reported paying a 44% effective tax rate in their sec filings.
Goldman sax went bankrupt in 2008 didn't they? Remember the bank bailouts? Besides, they paid a 34% effective tax the previous year and attributed the lowered tax rate to the increase in permanent benefits as a percentage of lower earnings and changes in geographic earnings mix. This means that the their profits were paid out and the tax money didn't disapear, it will be paid by those people.
You entire 0% rate is fictional to any company that is solvent. It isn't because of loopholes and it isn't because the rates set down don't have any meaning. The rates have an effective disposition because they are higher then what they should be and the government lowers them for companies who do certain things they want them to do. It's like the mortgage interest deduction, if your making over a certain amount of money, you should be owning instead of renting in order to lower your tax burden. That's by design and accurately reflects the intended rates. What doesn't accurately reflect the intended rates, is you misunderstanding of the tax system and those who participate.
We actually have one of the highest corporate tax rates in the world.
You're quoting KPMG and right wing propaganda machines as authoritative sources on corporate tax rates? Edwin Feulner runs the Heritage Foundation, one of the groups helping organize the "Tea-Birthers". One of his own favorite quotes:
"We conduct warfare in the battle of ideas."
Yes, they do. And those ideas are almost always promoting conservative policy items including corporate welfare. The tax rate is meaningless, the US is actually a corporate tax haven. Because of exceptions, credits, deductions, depreciation and amortization, plus a little lawful and unlawful income shifting, tax deferments and shelters, the effective rate paid by corporations in the US (13.4%) was below the average (16.1%) for the 19 OECD nations in 2000-05. So, sure, lower the tax rate and close off the deductions, then watch those very sources have a collective heart attack.
You'll believe anything if it's on Fox News.
That's our life, the big wheel of shit. - The Fat Man, Blue Tango Salvage
Exxon, They paid about 44% in 2007 and 47% in 2008. BTW, that comes to around 35 billion per year in taxes they paid.
The rate isn't there to be actually paid. The government provided deductions and exemptions in order to steer businesses into certain directions and to get certain things accomplished that wouldn't have normally happened. The rate, just like you do no pay your actual rate, is 1: graduated progressively so it will never be the entire amount, and 2: it's there only for people and companies who do not follow the direction the government wants them to.
You got a little spittle running from your foamy mouth there skippy. Maybe the nurse can wipe that off for you after computer time is over.
That's our life, the big wheel of shit. - The Fat Man, Blue Tango Salvage
Following the Great Depression and World War II, the leaders of our society decided to start taxing the wealthy more and more, while using that money for the betterment of society as a whole. It was called the New Deal. And this policy worked quite well, propelling America into a period of rapid economic growth, while at the same time creating a profound sense of economic security for the middle class. Vacation pay became the norm (it largely didn't exist before the Great Depression), and middle class Americans had enough disposable income to spend on luxuries like vacations.
This system was made possible by several other policies that prevented the rich from quickly withdrawing their money from the country. If you were wealthy in the UK in the 1950's, it was extremely difficult to get your money out of the country. It became common in this period for rich British citizens to build huge sailing yachts, which they sailed to other countries and then sold. They used their boats as a store of their wealth (read Myles Smeeton's Once is Enough for a story of one such couple).
Then came the right wing "neo-liberal/neo-conservative" politicians. When they got into power, one of the first things they did was to remove the barriers to capital mobility. Money was able to flow almost completely freely across national borders. This has brought economic growth for some, especially in countries like China. But it has also ensured that the countries that originally used taxes on the wealthy to ensure a healthy middle class were at a huge disadvantage. Rich individuals have withdrawn their money from America, and invested it in countries like China.
What many of us don't realize is that the complete and free mobility of capital will lead to the virtual disappearance of the American middle class as we have seen it over the past four decades, because it will ensure that money will flow away from countries with high taxes towards productive countries with low taxes. The country will increasingly look like Britain in the 1800's during the beginning of the industrial revolution (i.e. the world of Oliver Twist). There will be a very wealthy class. And there will be a worker class, which will comprise the vast majority of the population. Things like vacation pay, comfortable pensions, affordable quality health care, and disposable income will slowly but surely disappear for the vast majority of the former middle class. I am not prophesizing this; I am watching it happen before my eyes. IT IS ALREADY HAPPENING! Take an honest look at America right now, and tell me that our standard of living isn't slipping. And this at a time when we have never been able to make products more efficiently!
And to those of you who reflexively demonize those like me as "liberals", ask yourself this question? Are you a Billionaire? If not, then why are you thinking like a billionaire? Why do you think that lower wages for most of society is in your interest? Why do you think that taxing billionaires and spending that money to build roads isn't in your interest?
Do you think that the $20000 you have invested in stocks will pay for your comfortable retirement? What you seem to forget is that the billionaire who owns $200 million of those same stocks will make slightly more than you. And he will use the money he makes to buy even more stocks. Meanwhile, you, with your ever decreasing salary will have less and less disposable money to invest.
This and no other is the root from which a tyrant springs; when first he appears as a protector - Plato (423 to 327 BC)
I'm not sure why this is a troll, unless we've got some very unschooled libertarians moderating tonight.
Corporations owe their complete existence to the government and the people. A corporation is a legal entity created out of nothing by government action, and supported by the people. Benefits include tax breaks, jurisdictional freedom, limits on officer liability, access to publicly run and regulated markets (Wall Street), and so on.
Private companies, on the other hand, are not corporations, and do not owe a certain responsibility to the public.
Fascism trolls keeping me up every night. When I starts a preachin', he HITS ME WITH HIS REICH!
As a public service, I have to reiterate: sumdumass is wrong. Bush increased the debt by about $7 trillion dollars in his 8 years. Obama, in the middle of a recession, has budgeted an additional $1.7T of deficit spending in his first year.
Waltz, nymph, for quick jigs vex Bud.
Too bad that's not stopping IBM from laying off Irish workers, too.
Progressivism: Parasites helping parasites to help themselves - to other people's stuff.