Tech group's study defends outsourcing

[NeoConsSuck]

http://www.usatoday.com/money/industries/technology/2004-03-24-outsource_x.htm

The USA's largest high-tech industry group in a new study downplays fears about outsourcing abroad but warns that migration of tech jobs will pick up without changes in U.S. schools, taxes and visa rules and a clamp on health care costs.

To keep high-paying tech jobs, AEA says, the USA needs to boost K-12 math and science education; attract more foreign engineers; enact R&D tax credits; and slash business costs stemming from litigation and health care premiums.

[tkmorris]

1. Please

"and slash business costs stemming from litigation and health care premiums."

That right there tells me all I need to know about this study. If they concluded that the costs of litigation are a major obstacle to business growth they are dishonest and merely parroting the Neocon party line.

They have a point regarding health care premium costs. I personally believe that health care premiums need to be eliminated altogether through introducing a national health care single payer system. In return raise corporate taxes and the taxes on the highest 20% or so of income earners, as well as reinstating the capital gains taxes and some of the estate taxes. The businesses themselves could break about even under such a scenario but would have less incentive to outsource jobs since they would not save anything in health care premiums.

[slor]

2. I agree...

hard to believe they could make it so obvious. I do believe people are already tired of these lies as the reasons for all that is wrong in business.

[SquireJons]

4. The Evil Businessman

It wasn't so long ago that Americans fell in love with big business. Before WWII, Americans had a very high distrust of corporations and businessmen in general. They were blamed for the depression, US involvement in the (not so )Great War, political corruption, complete hedonism and the un-greening if America. In my opinion they are guilty of each charge - though they had a lot of help when it came to the depression.

In the 1930's in particular, a businessman was seen as an arch villain often. Then came the second world war and our productivity allowed us to be a major player without having to sustain the kind of casualties and destruction that most of the other major players faced. And we made A LOT of money on the war.

So, ever since, US business has had sort of a pass when it came to analyzing their motives.

While I don't agree with isolationism or blanket protectionism, I do think it's time we awaken our healthy sense of skepticism about business motives. They want to make money. And... they want to make money. And don't for get the money. That's about it.

It kills me when I here that all the US has to do to end the jobs bleeding is increase math and science education. From what I've seen, social studies and liberal arts have all but been eliminated from most school programs. We produce lots of scientists and engineers as it is. The problem is with economics, not education. If our educational system is so bad, how come so many people want to come here for an education?

I studied computer science in college, have my MCP and A+ certification, started my own cyber cafe and have almost 2 decades of experience. And guess what? I've only worked 6 months of the entire * administration. If I can't find work, what good will it do to retrain laid off workers in computers? There are hundreds of millions of real smart Chinese and Indians who can do my work for a fraction of the costs. Why? Because their standard of living is so low and the per capita income is almost non-existent. We will never win this race to the bottom. Others are already there, and the bottom wasn't supposed to be our goal in the first place.

I swear, a time will come when just about all intellectual jobs will go to the poorest smart people business can find. Distance is no obstacle anymore, only cultural distortion prevents the wholesale shifting of jobs overseas. In time, other countries will realize that and eliminate the distortion. Then what? Must we lower our standard of living to India's in order to keep business men happy?

[Muddleoftheroad]

7. So American businesses are expected to compete

In a world marketplace with one hand tied behind their backs?

I know outsourcing sucks, but what it the option? Other businesses doe it in other nations, so Americans either compete or get left behind.

[NeoConsSuck]

8. I see your point, but as far as tech goes..

It's American companies competing against American companies. It's Microsoft vs. IBM vs. Oracle etc.. It has nothing to do with American companies losing business to foreign software companies. At least not in 2004.

It's all about raising profits, keeping the stockholders happy.

---------------------------------
On Edit: stockbrokers->stockholders

[Muddleoftheroad]

9. They still compete in a global climate

And I think you are oversimplifying things except for Microsoft and even they have competition from open source these days.

[Don Claybrook]

10. So outsourcing sucks

but you're all for it?

[Muddleoftheroad]

11. Don't see any option

What do you suggest.

[The Backlash Cometh]

13. I suggest you broaden your perspective...

...beyond the stockholder profits which come from short-term to long-term planning. One thing that U.S. corporations have never been good about is long-term planning. They think short-term profits are the only way out of a bind.

Many of these countries who have been "blessed" with outsourced jobs are not all happy about it. Because U.S. corporations are so committed to short-term profits, they have no qualms about relocating a textile sweatshop from, let's say, Venezuela to Guatemala if they can get the work for cheaper. So Venezuelans begin to rebel about outsourcing and are as unhappy as we are.

Meanwhile, back on the U.S. ranch, you have people who no longer have jobs. Are they going to have surplus money for stock? Hell no. So eventually, what kind of corporations are we going to have? Answer: Global corporations which don't answer to any country. And when that day comes, when no one can identify the nationality of the corporation or identify WITH the corporation, who's going to be left to defend it on foreign soil?

Is that your image of the future?

[Muddleoftheroad]

14. This is not profits, but long-term survival

You can't compete when your competitor can outsource to lower-paid staff and you are unable to do so.

Maybe the world can solve this issue, but until it does U.S. firms have no choice but to play the same game as non-U.S. firms.

[The Backlash Cometh]

19. But the strategy that the U.S. firm is taking will turn it into a non-U.S

firm. Then what? When it begins to quack like a duck, Americans will treat it like a duck and shoot it during duck season, using legislative regulations for bullets. Instead, they will favor corporations who do remain loyal to the U.S.

Don't underestimate the resolve of U.S. citizens. As soon as someone comes up with a plan to fight against these trends, citizens will come together for that purpose. What you'll never do, is convince them that outsourcing is good for them when you have CEOs making millions of dollars while they're out standing in a bread line.

[Muddleoftheroad]

37. Apples and oranges

Comparing executive salary and outsourcing is two separate issues. I've yet to see anyone here come up with a solution for companies to remain competitive on the world stage without outsourcing.

[The Backlash Cometh]

45. To the common man, apples and oranges is called fruit salad.

It all goes down the same gullet. You can't separate them. Corporations have been getting leaner, not by coming up with better ideas to market their products, but by worker reductions here in America; and to grow, they go to other countries where they pay workers considerably less. Furthermore, they're going to solve their weak consumer bases, by creating new consumer bases in other countries with their outsourcing. It puts money in the pockets of foreign have-nots. Ergo, American corporations which outsource for solutions will progressively become less American and more global. In another decade, or so, we won't feel any loyalty or alliance to many of them.

[Muddleoftheroad]

76. So you offer no solution, just a further complaint about the problem

[The Backlash Cometh]

80. Solution seems obvious to me.

We need to start paying our taxes so the government can invest in research & development.

[unbrand]

23. Competition does not mean going to LCD

I don't buy the "everyone else is doing it, so we should too" argument. Especially when many of the jobs being outsourced have a creative or other brain-work aspect to them. Meaning, many of the outsourced jobs are not about making widgets in a factory. The jobs are in the service industry, and in software (my field).

Most of my colleagues who have some familiarity with outsourcing (their employers do it) say that it sucks because of the difficulty of time zone differences, coordination, and project management difficulties. This says nothing of cultural differences in creativity that I would argue, give the benefit to the Americans (meaning, e.g., "melting pot" producing an environment where people can learn and get new ideas from others and put it back into work -- creativity!)

Somebody recently asked Steve Jobs about how he would lead the company during these economic times. He said Apple was going to innovate its way through the difficulties. That's exactly the kind of attitude I'm talking about here. Did Steve Jobs say, "Well, Dell is outsourcing their motherboard design, so we should too. It's important to our long-term survival." Bullshit.

Of course, not every company is an Apple Computer. All companies must innovate in some way to stay in business. I refuse to believe that innovation means bringing the whole game down the Lowest Common Denominator.I do believe that if more companies took Steve Jobs attitude there would be less outsourcing going on and more creation of things people want to buy.

[Muddleoftheroad]

38. Yes it does raise issues

And doesn't save every penny it appears to, but geographical and time differences can either be a problem or a benefit.

Again, I see lots of criticism but no solutions.

[unbrand]

54. 2 points, Muddle.

1. For customer support jobs that have been outsourced, yes, the different timezones can be an advantage. I can't see where the geographical differences can be an advantage. Maybe there are some, but I don't know what they are. Overall, the negatives involved with the geo and time differences greatly outweigh the positives, imo.

2. I probably wasn't clear enough in my original posting in this thread. I posted because I wanted to offer a solution to the problem. The solution to me, is to follow the Apple model and innovate. As others have said more eloquently than I have, there is more to company growth than purely the short-term reducing costs measures involved with outsourcing. How about making things people want to buy? That should be the focus of companies who want long-term, sustained growth. How do you do that? Innovate.

I used a phrase at a couple companies I've been at where previously the companies were just providing easily copied "services" such that there wasn't much distinction between these companies and their competitors. The phrase was "sustainable technology assets." These are things that you make that separate you from other companies. Things that people want that you and only you can provide.

Maybe I don't understand your statement "Again, I see lots of criticism but no solutions."

[Muddleoftheroad]

77. All companies should try to innovate

But that doesn't solve the problem. Innovations are quickly copied or followed, so there is a limited time window for using such market changing developments. To truly succeed, a company must constantly innovate and few can do that. I don't think your solution is realistic for more than a couple companies.

Cutting costs is another way to thrive. That is something most business cultures can manage.

As for geographic opportunites, they give you not only access to a labor pool, but local representatives familiar with new markets. That is an advantage.

[Don Claybrook]

15. My suggestions

Single-payer, goverment-sponsored healthcare today. This would help a great deal, because many jobs are going to places where the government pays the healthcare costs. This makes US companies less competitive.

Next, tax the living hell out of companies that outsource their labor. Offset that with tarriffs.

No need to accuse me of being a socialist. I freely admit it.

[Muddleoftheroad]

16. Well, I agree with the first idea

Thea second and third are protectionist moves that will hurt our ability to compete and be offset by actions of the WTO.

[mhr]

20. How Will Taxes Hurt Our Ability To Compete?

I don't understand this unsupported and unsubstantiated rhetoric.

I hear it often and think sometimes that the republicans have done such a good job with brainwashing that these assumptions are always left unchallenged.

Tax = Bad
No Tax = Good

Tariff = Bad
No Tariff = Good

The fundamental question is what kind of society do we want to have?

Is society here to support a conservative economic agenda?

Or is our economy here to support a society.

Until these basic questions are answered, then all other arguments are mute.

[Muddleoftheroad]

39. Realities

If we use protectionist ways to support American business, the WTO will come down on us like a ton of bricks. And, of course, even if we get away with it, it will hurt our exports because every other nation would then do the same.

And yes, tariffs are bad. They inhibit free trade.

[Fovea]

42. Perhaps I am blind to the advantages of free trade.

But I do not see them here in the real world.
Other than clothes made by slaves, I see little
advantage to the American citizen from
'free trade'.

[mhr]

47. The WTO Will Only Be A Hammer Because We Negotiated Agreements

Break the agreements and the WTO problem goes away.

Replace the broken agreements with bi-lateral agreements between individual countries.

Problem solved, no issue!

[Muddleoftheroad]

69. No issue?

You want bilateral agreements among all the nations? You know how complex that is?

[SquireJons]

73. Not so fast...

Would you care to back up your argument that US business will be hurt if they don't have slaves in the third world?

And second... The WTO is a G7 puppet. All of the G7 governments are more socialist in nature than the US. If we lead the way in rescuing livable wage jobs, the others would jump on board so fast your head would spin.

[Muddleoftheroad]

78. Slaves? Not even close.

As a descendant of slaves, I think I know the difference.

If competitors to U.S. firms can locate branches in the third world, then they can ALWAYS beat U.S. companies on price. That's unfair competition and it is unrealistic to expect U.S. firms could thrive in that environment.

[SquireJons]

79. Identify these competitors, please

Your words are too vague. Who do you think IBM has to compete against? No one in any third world country, to my knowledge. If you know otherwise, please let us know.

As for the slave thing, I don't think you have any idea what you're talking about. As bad as slavery in the US was, I would respectfully argue that conditions in rural China, Pakistan and India are just as bad or worse. Slavery is slavery, no mater what the color of your skin.

[ProfessorGAC]

31. Simple: Minimize the Salaries of Executives. . .

. . .wherein the principle cost cutting measure is workforce reduction.

Strong companies find ways to enhance efficiencies and operational qualities (it's what i do, every single day) as the primary means of cost minimization.

Moving the jobs overseas to reduce labor costs is not a strategic decision, but rather, a tactical one. People don't get paid $5M, $10M, $20M, or even $50 million to make short term tactical decisions. They get that kind of money to develop cultural mindset conversions to enhance quality, reduce waste, expand market range, and grow the business in strategic manners.

If one CEO takes a $5M cut, that saves 400 jobs as the difference between the total cost of outsourcing (salary reduction, corrected for the enhanced telecom and administration costs). If all the execs took a similar hit, 3,000 jobs would not need to be outsourced, and the shareholder value is minimized.

Moreover, the short term thinking that is involved in these decisions will ultimately result in sharply reduced buying power of the middle class. That means that the goods & services these very companies provide will be affordable to a smaller class of americans. By doing so, the long term value of the outsourcing is severely diminished, making it a band-aid, and not a solution.

Your defense of this methodology indicates you are equally trapped in the either/or, two dimensional thought process as those making these decisions.
The Professor

[mulethree]

81. Long Term

Wow you have a nice long definition of long term. In my industry CEO's don't hang around for 5 years and the stockholders think 3 years is long-term.

I think you meant shareholder value is Maximized not minimized.

I don't agree that CEO's don't get involved in "tactical" stuff, but I agree that when they are getting involved in 1-year type cost-cutting and such, then the company is in big trouble.

I'd love to work someplace where management thinks 15 years out and a outsourcing that pays for itself in 2 years is bypassed in favor of a strategy that pays off in 10 years. Any suggestions?

[SquireJons]

67. Easy. And not so easy...

If a US based business sells it's product in America, it ought to be required to maintain a certain percentage of each type of job here in the US. If and when we have to really compete against third world counties (which China still rates as on the whole), then we should consider tariffs that will level the playing field. If, for instance, China uses forced labor to keep their costs low, than the US ought to make these products cost just as much in the US as the domestic product. But that is not currently the issue. It's US companies going over to third world countries and exploiting the cheap labor. And only stock holder really benefit.

China has 1.5 billion people. If they can sell computers to their own people, then they will need to develop a support network. That's the proper way to grow the market in developing countries.

[Beacho]

32. Compete with whom?

This is such a bs talking point(not saying your promoting it).

All these companies whining about being able to compete are making record profits and have no competition from overseas.

How many CEOs have cut executive pay to 'remain competitive'?

[mhr]

18. Hear, Hear SquireJons

Unemployed 46 months -

BSEE ( electrical engineering ),
MBA,
Commercial Pilot,
Honorably discharged naval officer -

and cannot find a job!

I can go back to graduate school for very little money via state grants. My interests have always been technical or technically related fields. Yet I don't because the high-tech job picture is so bleak for Americans.

For this business group to insinuate that there are not enough Americans prepared, willing, or able to work in Industry is disingenuous.

[SquireJons]

72. I know what you're going through, Mhr.

Man, And I thought I had it bad. You seem to be the 'walks on water' kind of employee that business's are looking for today. It's probably your age (another big problem with US companies these days is that they jettison older experienced employees for younger, more recently educated-cheaper models. Just like the executive who leaves his wife to move in with his 20 years younger secretary. Yes, I am comparing business priorities with a pathetic, crisis driven narcissist).

Up until this mis-administration, I was a proponent of open markets. Not so much because I could see the obvious benefits it brings, but more out of fear. Protectionism during a world depression only seemed to damage democracies and strengthen totalitarian, command economies.

Is the world in a depression? No.

Are any of the G7 economies command driven or totalitarian? No. China is, but they are a drop in the bucket, unless you are one of those drooling at the prospect of a 1.5 billion person market. If you are, I have one word for you: mirage. China will never let capitalistic countries get rich at their expense. The shoe's on the other foot now.

I am no longer a strong proponent of free trade agreements. For instance, how will it help us if we create a free trade zone in the Middle East, as * has proposed? We can not export jobs as if they are cars, because we don't manufacture jobs. If we were creating a surplus of millions of jobs, then it might work, but as it is, it will weaken us without really helping other regions of the world. The only ones who benefit are institutional investors ($$$$$) and Wallmart shoppers steeped in materialism.

It may be a bit more difficult to maintain bilateral agreements, but so what? It's not like we don't already have to maintain consulates and have specialists and all that. And I disagree vehemently this the notion of US firms having to compete with other nations who outsource. We compete only with other G7 economies - all of which we dominate. These other countries have reluctantly had to follow our lead in this arena, not the other way around. Germany, France, England, et all would ratchet up the tariffs in a skinny minute if they could. We are not losing our jobs to Siemens, we're losing them to foreign subsidiaries of US companies.

My solution: Have US companies partner with third world countries to develop a market in these countries for their services. Then hire locals to support that market. US jobs would be created in the handling of the emerging market. Computers that Dell sell in the US should be manufactured in the US and supported by US workers. Yes, some of these items would cost more, but most of these items are luxury items. Basic goods like food, medicine, gasoline, and housing have not gone down one iota. Why? Because we need them, so therefor companies that sell them can get what ever they want for them.

Have you seen the cost of Microsoft products go down? I haven't, and yet they jut posted their largest profit ever - while laying off tens of thousands of Americans. I think it's pure greed and it stinks.

[takebackourjobs]

52. A much needed history lesson

Thanks for pointing out our progressive democratic heritage. Many here are possibly not aware of this tradition, having been employed previously as "management". Little did they realize their true value to the corporate world.

There are valid reasons for the institutions in our government that police business and industry. It is no coincidence that Bush can be compared to Herbert Hoover. In Hoover's day, many of these institutions were about to come into being. Today, corporate CEOs see the Bush administration as a friendly one, unlikely to call their behavior into question. The government watchdog agencies have been reduced to corporate parrots by the installation of Republican appointees at their heads.

When IT was new, and productivity gains were so dramatic, the programmer or engineer was considered so integral to the corporate structure that his/her status was esteemed. That status has been revoked. Millions of folks that previously would never associate themselves with "labor" are coming to a new realization.

If there is any reason for optimism, it is that Bush has driven our economy into the dirt on the backs of many of his previous supporters. Hopefully, many of these will pull their noses out of their bibles long enough to see where they truly stand with the Republican party.

[skippysmom]

62. Well put

And welcome to DU!

:hi:

[JoFerret]

58. Blair has just been

touting the benefits of outsourcing British tech jobs to India

[The Backlash Cometh]

5. Sounds like the results from another right-wing think tank.

Those think-tanks are just too shallow. They have an agenda and find a way to reach their conclusions. I can guarantee that there were no sociologists with economic backgrounds in that group. They would at least be able to tell you the negative aspects of outsourcing here in this country.

[Chitown_Dem]

3. Lou Dobbs last night

From the article: "Many economists say outsourcing produces benefits over the long haul by cutting prices to consumers, making companies more efficient and steering workers to more productive jobs. What's more, the USA appears to be gaining more jobs from incoming foreign investment than it has been losing to outsourcing, Commerce Department numbers show."

Someone refuted this claim on Lou Dobbs last night (I'm sorry that I can't remember who it was). The person said that when U.S. multinational corporations hire overseas they typically create new jobs. When non-U.S. companies open an operation here, it is usually through buying an already existing company or factory, and no new jobs are created. So there is more to this claim about economic tradeoffs than meets the eye.

As far as I can tell, the only proponents of offshoring are the ones who stand to make a huge profit off of cheap labor. Those of us who don't agree with it are "hysterical" and "isolationist."

Anytime the name-calling starts, and I hear something is "for my own good," I tend to think it's a big lie.

[The Backlash Cometh]

6. I can't remember in recent history when a corporation has done

anything that deserves our trust. I recognize that corporations are trying to stay alive. It's the imbalanced salaries which make their actions nefarious. CEOS and upper management are richly rewarded while the real grunts of the corporation are treated like garbage.

As for foreign companies investing in our country, I would be very skeptical about their taking over an existing company. It wouldn't be the first time that they took over, and then moved it back to their own country.

[Mithras61]

40. Interesting Survey on Lou Dobbs...

http://www.cnn.com/CNN/Programs/lou.dobbs.tonight/

Do you believe pursuing a balanced trade policy and opposing the export of U.S. jobs to cheap overseas labor markets is:

Economic isolationism: 11% - 750 votes

Responsible economic policy: 89% - 5950 votes

Total: 6700 votes


Perhaps you can find the reference you were speaking of in one of Lou Dobbs transcripts, which are available here:
http://www.cnn.com/TRANSCRIPTS/ldt.html


<Edited to add transcript link>

[Jim__]

12. Fascinating viewpoint!

From the article:

The AEA study, out today, says there are no reliable data on job losses due to outsourcing and calls most estimates exaggerated. It compares "hysteria" about job movement with fears in the 1980s that Japan would eclipse the USA as an economic power.

If there are no reliable estimates, how did they conclude that most estimates are exaggerated?

As to what it "compares" to, it seems like it more accurately compares to concerns when the textile industry started leaving the US and we were assured at that time that there would always be a large domestic testile industry. Sort of like the "large" domestic textile industry that we have today.

[leesa]

17. BS. This is a RW pub. The people losing their jobs ARE educated

How stupid do they think we are? As dumb as they are? Same old loser GOP talking points throughout.

[yltlatl]

21. Great thread

thanks for this! I have to say I'm w/ Squirejons and TBC, but I'll go you one better. The ONLY effective countermeasure to unregulated greed is--you guessed it--REGULATION. And if corporations are going to become anational (I would argue they largely have already via the pyramid of ownership), then we need to regulate them at the INTERNATIONAL level. Everyone around the world who suffers from the actions of these corporations needs to find common cause and force our governements to submit to international pressure and to strengthen international institutions (and eventually we need something far better and more directly representative than the UN).

Like it or not, part of that internationalization process will probably result in Americans having to compromise on our so-called "standard of living". We will have to become on average somewhat poorer. (Considering that we live a life of opulence thoroughly unimaginable to most of the world and suck up ungodly amounts of resources tells me that might not be a bad thing.) To me though, the amount of security we would gain by taking this route would be well worth the trade off--that would be a standard of living with some value.

P.S. All this talk about our corporations "competing" will remain so much hogwash while profit margins are as high as they are and upper level executives earn hundreds of times the amounts their workers earn. We need to bust these corporations down and yoke them to serve (rather than ravish) our social well-being.

[unbrand]

27. Great points, especially about the profit margins.

I think you nailed it in your postscript. A big question I have is, what will "bust these corporations down?" I mean, really? The entire system of capitalism here in the U.S., as well as our government, is now in sync and doing everything possible to sustain itself and the top 1% of society.

You mentioned Americans having to compromise our standard of living. I do agree. But what will bring that about (the realization part)? I think it's going to be something big and nasty. I mean really BIG and really NASTY. Maybe something like Code Red/Martial Law/cancelled elections/terra attack in US -- all in a short amount of time. Christ I hate even writing that, but I don't think much less will wake us up. America is the proverbial frog in hot water and the temperature just keeps going slowly up and up and up.

[Tiberius]

22. Opponents of outsourcing please read this article

http://www.wired.com/wired/archive/12.02/india.html?pg=6

While I think it's total bullsh*t that outsourcing is used as an excuse by corporations to try to curb litigations or health care benefits, I am in the small minority here who thinks it's a necessary evolution.

[Spentastic]

24. Evolution to what?

That's what I don't understand. When the outsourcees are no longer competetive they too will be outsourced. I've never seen a more obvious slippery slope in my life. A flight from regulation and worker protection does not help anyone. First world subsidised infrastructure will not be replicated in third world countries (less tax revenue). Nominal gains in quality of life in the short term will return massive benefits for CEO's and shareholders but Labour is going to get reamed.

[QC]

26. Evolution to corporate feudalism, the real goal of these people.

[Spentastic]

28. I just don't get it

This approach shouts "DANGER CORPORATE FACISM AHEAD" yet people are saying if we don't do it corporations will suffer.

Fuck em. Make em pay back the subsidy they have enjoyed by operating in the first world. Then make them provide equal protection in other countries.

Their bottom line is not humanity's bottom line.

[QC]

29. I agree. The nation is now in the hands of people whose interests

are not the nation's, and no one seems to realize it.

As for me, I think that the executives should have to follow the jobs. Let them give up their plush American life and live in a walled compound somewhere, in constant fear of crime and disease, trying to develop their high tech products in a country with 90% illiteracy. Let's see how they like it then.

[mhr]

30. Hear, Hear Spentastic - Corporations Are Amoral

Man is moral; corporations are not.

They have no moral component.

If man wants corporations to display moral behavior then it must be instilled via regulations, both punitive and non-punitive.

[mhr]

25. Evolution For Whom Or What - Corporations And Corporate Profits?

Reposted from above.

I don't understand this unsupported and unsubstantiated rhetoric.

I hear it often and think sometimes that the republicans have done such a good job with brainwashing that these assumptions are always left unchallenged.

Tax = Bad
No Tax = Good

Tariff = Bad
No Tariff = Good

The fundamental question is what kind of society do we want to have?

Is society here to support a conservative economic agenda?

Or is our economy here to support a society.

Until these basic questions are answered, then all other arguments are mute.

[Jim__]

33. I agree - the basic assumtions of economics are wrong

Economists seem to operate under 2 main assumptions:

- Any increase in production benefits everyone
- Any increase in production is sustainable.

I think they're wrong on both counts and that implies that society has an interest in production and distribution; and government has to protect that interest.

[Tiberius]

36. Another question for the anti-offshoring folks...

Everyone has such an emotional, knee-jerk reaction to outsourcing. I understand people are losing jobs. I understand there's great pain out there.

But to everyone who is anti-offshoring, ask yourself this: if you walk into a store, and there's two TVs, one for $200 (made in America) and one for $100 (made in China), both of comparable quality, which one would you buy?

Everyone here is a consumer, but in the emotion over job losses, this seems to be conveniently forgotten. And I know most people here would say "well, we'd rather have jobs than cheap consumer goods"... or "how are we going to afford the TV if we don't have a job?"... but these offshored jobs are a *very* tiny % of the total workforce.

[Mithras61]

43. There is truth in what you say, but...

if the CEO and top brass of the American company took substatial pay cuts, so that their pay was on a more realistic scale, the American made TV could easily be sold at a competitive price without significantly harming profits.

Study after study shows that American workers are the most productive in the world. Maybe corporations shouls recognize that their management is significantly overpaid compared to management in other countries, and save some money from that realization instead of from getting rid of the producers.

[Spentastic]

44. For fucks sake

Have you ever seen a wedge? Which end of one does this look like to you?

[Tiberius]

50. what the hell are you talking about?

A pitching wedge? Of course, but my short game sucks.

[mhr]

46. Tariffs Level The Playing Field And Is The Reason For Their Existence

Two Televisions:

One US Made - price roughly $ 200.00
One Chinese Made - price roughly $ 200.00 with tariffs

Which one you gonna buy?

[Tiberius]

49. of course I'd buy the U.S. TV...

... but I don't think tariffs are a good idea, so it's not relevant what I'd buy in your example.

[mhr]

51. Just Because You Do Not Believe Does Not Make Them A Bad Idea

That is just your bias, nothing more.

If tariffs are bad let's hear the case against them.

But please, do not cough up the right wing talking points again.

I am not accusing you of being right wing. I am only saying that the right wind has done a good job of infecting the nation with their anti tax, anti tariff arguments.

This makes it hard for many to get beyond those memes to have a substantive discussion on the issue.

[Tiberius]

61. and just because you believe they are a good idea

... does not make it so, either.

I believe that in general, free trade is best. I doubt either of us have the time to go into it here. There are exceptions, and on these I am a leftist (such as allowing third world nations to protect their economies).

[mhr]

63. I believe In Supporting People Instead Of Corporations

'nuff said

[burrowowl]

56. They are usually not of

comparable quality.
Craftman is now making tools in China, same price and they stink, over half the cresent wrenches I checked, the worm gear didn't work worth shit. A microwave oven used to last at least 5 years, they go crapola in a year or so, etc.
Bought a Chinese made alarm clock at Target, it gained 5 hours a day, when you exchange it, it gets tossed. All this is a waste of earth's resources and screwing of labor for overwelhming profit to the corps.

[Avalon Sparks]

64. How about...

why does it only cost probably 1 dollar to pay some factory worker to make a Nike tennis shoe (and that's probably being generous), but they sell them him for a hundred dollars?

How many freaking TV's do I buy in a year? LOL

Answer: NONE without a job.


And actually I have a job and I haven't bought a TV for the last 8 years. But seriously, I don't mind paying extra for things made here.

I've been screaming to anyone that will listen that this race to the bottom for labor wages will eventually result in a race to the bottom of profits for these corporations.

[Muddleoftheroad]

70. You are a novelty

Most folks DO mind paying extra for something. No matter the reason.

[SquireJons]

75. I'm sorry, but you are acting the fool

If BOTH TV's were $200, which would YOU buy? That's the question. Damn near everyone can afford the extra $100 for their TV set. Oh yeah, I forgot, we all need 3 or 4 TV's in a house these days so we're talking about $400 not $100. My bad.

The real buyers that matter here are large corporations. They buy lots of computers, so if they have to double their capitol acquisitions costs it will cause them real pain... Right. Would Polly like his cracker now?

Oh Boohoo BooHoo for Bank America and Bechtel. Those bastions of protestant work ethic.

[Chitown_Dem]

35. From the article

"For US workers, the path beyond services seems uncertain. But again, history provides a guide. Thirty years ago, another form of outsourcing hit the US service sector: the computer. That led to a swarm of soulless processing machines, promoted by management consultants and embraced by profit-obsessed executives gobbling jobs in a push for efficiency. If today's cry of the displaced is 'They sent my job to India!' yesterday's was 'I was replaced by a computer!'"

Historical trends are no guarantee of future trends. This is true in the stock market and true for the economy.

You can't feed your kids on promises. People's livelihoods are being traded in for a supposedly rosier future that may or may not materialize. In the meantime, what do you have - rampant unemployment and a lot of anxiety. Why? Because the transition we are in toward a supposedly beautiful and blissful economic future, according to the Holy Church of Offshoring, is all based on variables that are beyond anyone's control.

What it boils down to is that average U.S. workers are being asked (forced) to bear the pain of the transition to reach a nebulous result (from the article ~ "The result: more workers focused on real innovation. What comes after services? Creativity"). But what are they supposed to do *in the meantime* - i.e., now, when the rent is due?

Displaced workers are not the ones leading the charge of offshoring, yet they are paying the highest price for it. Those who are leading the charge stand to make a huge profit from it *right now* or in the near term. It's more than a little disingenuous for the corporations to tell American workers to just "deal with it" after throwing them down a hole and making a ton of money by replacing them with cheaper labor.

[Tiberius]

41. Historical trends...

Companies find cheaper means of production, workers are displaced, workers re-tool, new innovations come along. That's a trend that I fully believe will continue, since it's been happening for a very long time now.

And I know displaced workers can't pay the rent. That's why I'm in favor of a very strong social net, like making unemployment benefits your FULL salary and extending the benefit period.

[mhr]

48. Well Said, Kudos!

My pain is now intense at 46 months of unemployment.

Future?

What future?

[SquireJons]

74. Misguided Perceptions

"Evolve to what?" indeed.

The basic premise given by all proponents of outsourcing is two part:

1) It will make companies more efficient. Well, efficiency means job loss, but don't not necessarily mean lower prices. And are lower prices worth the trade off?

2) US workers will find 'new work' in 'emerging industries.' This is absolutely a hallucination. What new jobs? What new industries? The last and only example - Information Technology is being riped from our hands as we speak, and the 'industry' only lasted about 15 years as a source of large numbers of livable wage jobs.

Oh right, they mean the 'manufacturing jobs' at Wendy's. I forgot. Please excuse my stupidity.

[Beacho]

34. To the 'we gotta' poster above

Maybe we need to do some other things so that workers in the U.S. can compete.

First we can repeal child labor laws and the minumum wage so we can compete 'fairly' with the cost of living of Indian workers.

Hell, If I can pay 20 cent for a loaf of bread and a hundred and fifty bucks for a two bedroom apt, I'd be happy to live on ten grand a year.

There's more to life than the bottom line

http://www.geocities.com/CollegePark/Library/9175/inquiry1.htm

[mulethree]

60. but

Then you will loose the Indian job to a Chinese who will work 18 hours a day, 7 days a week for 1 (yes one) grand a year. No two bedroom apartment, a bunk in a company dorm that 3 other workers share when it's their shift to sleep. No bread - that takes grinding and baking and a fly-free place to rise for 2 hours. We will eat rice, just knock the husk off and steam it.

No safety regulations, environmental regulations, Minimum wages are like 39 cents an hour but if you're Walmart, and grease the right official palms, you get it for 15 cents an hour.

So now we have "legal aides" working out of India, soon it will be lawyers as well. Lets develop distance-learning so we can ship teaching jobs overseas. How about remote-medical-diagnoses? so we can employ overseas doctors as well. We'll de-regulate medical testing so it can be done in a Siberian camp with guards that shoot animal rights activists on sight. Heck why keep nasty dangerous prisoners around our populace? We can save enough using a Mexican prison to more than pay the air fair of their relatives to go visit, oh but that discriminates against those who get air sick, teleconference those visiting hours.

So what jobs will be left? Those that require a physical presence. Cashiers (oops thats self service now, just one security guard to monitor the 8 self-checkout stations). Burger-flippers? oops nope one machine flame broils everything on a conveyor belt. Bank tellers are largely gone.

Nurses, plumbers, truck drivers, linesmen, firemen, policemen. Maybe garbage men, landscaping, sewage workers but Bush is gonna import them since Americans don't want those jobs.

So, we need to get rid of the minimum wage, safety and environment regulations, courts, health care and anything else that raises our production costs. So we can be globally competitive. Tax roles will go down. So we get rid of public colleges, parks then high schools.

I don't suppose it will take long to even out the standard of living until we're competitive again. Heck we've already cut everyone's pay 30% in just 3 years by devaluing the Dollar.

So, if you want to make the big bucks .... invest everything you've got in the companies that sell anti-depressants, impotence treatments, breast implants and other legally sanctioned feal-good-about-yourself in a bottle. When we are too broke to pay for those, then you market suicide kits with a no-mess bodybag and some cyanide pills.

Or we can get drastic, stuff like mass genocides or actually not signing trade agreements unless everyone has some reasonable minimum wage, safety, environmental, health care etc standards in place. You either wipe out the competition, or force them to play on a more level field, or wait for the field to level itself - at a level way below what Americans have gotten used to.

Well, unless you already have money, then you invest it in whatever company, currency and industry will make the biggest profit on the backs of those 15cent an hour slave laborers. Just don't expect to sell the stuff to Americans they're broke and bankrupt.

[Avalon Sparks]

66. That's great and vivid writing MuleThree

Please consider completing it into an essay, it's greatness!

I'd love to start passing it around in email chains!

[GinaMaria]

53. Universal Health care

would help businesses eleminate the cost of health care premiums.

[takebackourjobs]

55. Another right-wing "study"

It should be evident where this group's loyalty lies. It is not a worker-oriented group. "Industy group" is in the description.

Do a search on Google for "global outsourcing". What you will find is a glut of articles written by corporate lackeys and authors with Indian and other foreign surnames. Now where do you think their interests lie? Certainly, they are not concerned about the American economy.

What cannot be done with corporate money must be done with worker efforts. With the exception of a few truly "lost souls" we are preaching to the choir here. Action is the only weapon in our arsenal.

Write letters, boycott the offending corporations, organize, organize, organize. Whatever small piece we can attack becomes weaker. The cumulative effect must be what we seek to achieve.

[progressivebydesign]

57. They have a point... I have a rant..

Math education here... hell, education in general here. I am constantly amazed and embarrassed when my European and Japanese friends talk of their children's education! The kids go to school for more hours, more days, HUGE class sizes, and they are learning several languages, and mastering skills employers can only dream of!

Here is a case in point about our educational system. My stepdaughter is in 7th grade. She is in a math class, designed for 7th graders. Challenging for her, but not rocket science: fractions, algebra, etc. She needed help with her homework at a recent homework study time at school. The MATH teacher there sent her around the campus to look for her own math teacher, because that MATH teacher didn't know how to do the work! A woman who is hired to teach math at the junior high, did not know how to do 7th grade math! It's so disheartening to see how much lower the educational bar has been lowered since I attended junior high. It's like.. "oh, we haven't learned that yet. Haven't heard about that yet. I guess we'll learn that in high school". It's not the fault of the teachers, it's just the Paris Hilton/Survivor/South Park/ effect, the dumbing down of America. It's real, and it's hurting our ability to compete in the global workplace. The global workplace isn't going away, and we'll continually get our asses kicked if we don't re-tool the educational system to become challenging again. With No Child Left Behind, it actually makes things worse! It's teaching to tests.. which accomplishes little in lifelong learning.

A handful of students are doing exceptionally well.. the rest are just being passed through until graduation. The State of Washington had recently instituted a test, a competency test, to ensure that the kids that graduated had sufficient knowledge of the subjects. Well.. I guess they didn't do well at all.. and kids were left with the prospect of being unable to graduate. So.. they now give FIVE chances to pass the test. FIVE. Rather than try to figure out how the curriculum and social structure of the schools are failing the kids.. they just make the test completely irrevelvant.

[Yavin4]

59. Outsourcing Has Nothing To Do With Free Trade

That's a huge misnomer. Outsourcing is about the commoditization of labor. Outsourcing coupled with guest worker immigration programs are about the reduction of the price of labor to commodity like prices. IOW, all labor will be paid within a narrow range, regardless of its skill level. A doctor imported from China or India on a temporary work visa will make the same as an American-born janitor living here permanently. That's the real goal of outsourcing/immigrant worker visa programs.

What should be done about it? Global corporations need to be regulated at the global level. Trade agreements need to be reopened so that labor prices are protected much in the same way that prices for steel, agriculture, etc. are also protected. An American or European born professional in acccounting, IT, health care, etc. has to make a significant investment in their skills, and if that investment is undermined by cheaper labor in China and India then there will have grave economic consequences.

[uhhuh]

65. If the free flow of capital is so great

why don't we have the free flow of labor?
I think it's time to remove the protectionist immigration policies of all nations. If you want to move to a country where there is a job you want, you should be allowed to do it. If your job moves, you should be allowed to follow it if you choose.

Damn protectionists, standing in the way of free market flow!

[Muddleoftheroad]

71. You must be kidding

I consider that idea so ridiculous to be almost humorous.

[jamesinca]

68. I agree with them whole heartedly on some issues

To keep high-paying tech jobs, AEA says, the USA needs to boost K-12 math and science education;---slash business costs stemming from --- health care premiums.

We do need to improve education in this country, don't just stop at k-12, continue on to college. There should be more resources put into educating the public. I also agree with cutting the cost of health care premiums, get rid of the insurance companies and go single payer or something like that.