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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
This is actually the 'old style' socialism you are complaining about. State of the art socialism is about empowering individuals and helping them become productive members of society, wherever you can.
Denmark has a program called Flexicurity which is a popular example of this. Under that system, once you lose your job, you can get unemployment benefits as long as you are actively looking for another job. Or, if you prefer, you can go back to school, get some new skills, during which time the government will also help you out. This has worked out really well for the Danes: it allows companies to easily fire people they don't need, and allows people who are out of a job to easily find another one (or retrain for another one). It is a flexible, secure workforce.
It isn't always a matter of whether it is 'earned' or 'owed.' Sometimes we can change things to make the path to productivity as easy as possible for our citizens. If we can help them out, why not?
Qxe4
So you are saying that jobs are fleeing from the US to China because the US is becoming "redistributionist"?
You might want to investigate the political and economic system of China before you hold them up as an alternative to Obama's "socialism".
What is driving "offshoring" is not taxes, it's pure free-market forces. Labor is more expensive here than it is there, so companies attempt to cut costs by moving the labor there. Companies don't increase presence in China because the US raises taxes 5%. They move to China because they can hire a college educated engineer there for $15k a year.
The cake is a pie
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 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?
Laws that protect us from this kind of behavior add costs that push companies to these countries.
And here we find the weakness in capitalism — the tyranny of the masses, who want cheaper and cheaper DVD players and disposable razors, and don't care how many twelve year olds have to work in sweatshops to deliver them. (Me too. I'm trying to be better, but my habits are very bad. Like most of us.)
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
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
I can't help but wonder if people modded you flamebait because of the anger in your post or because they didn't think you were correct.
If the latter, then I'd like to point out to the people modding you that IBM was indeed the provider for the tracking software used at the concentration camps and labor camps of the Third Reich. The numbers tattooed on Jews weren't just decoration, they were tied to a punch card system IBM developed and maintained for the Third Reich. The numbers represented what "crime" you were arrested for (Jew, Gypsy, Homosexual, etc), your point of origin, and the camp you were assigned to. And this wasn't like a modern system where IBM can say they only sold it and didn't know its use. The systems which were used would've required constant on-site maintenance by IBM employees, which means there's no way they couldn't have seen what was being done to the prisoners held there. Additionally, contracts, internal memos, and other paperwork still exists showing that IBM's headquarters in the US was well aware of what was going, and what their equipment was being used for. They simply didn't care.
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!
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.