Why outsourcing is a big deal for California

[question everything]

PETER SCHRAG THE SACRAMENTO BEE

Why outsourcing is a big deal for California

June 30, 2005

Except for those immediately affected, last week's disclosure that IBM was laying off 13,000 workers in this country and Western Europe and creating 14,000 jobs in India was just one more little economic blip. By now the offshoring of yet another chunk of high-tech jobs to low-wage markets overseas is hardly news.

But each instance of outsourcing raises more questions about the sufficiency of the conventional wisdom: that the only way to keep the U.S. economy healthy is higher levels of education and training.

(snip)

But in the face of the global economy, the nation's deficit-ridden economy, its costly and dysfunctional health care system, its frayed social services, its nonexistent energy policy and its coddle-the-rich tax structure, better education for the young and retraining of laid-off workers alone simply aren't enough, no matter how often President Bush and others pretend otherwise.

Clyde Prestowitz, president of the Economic Strategy Institute and a trade negotiator in the Reagan administration, pointed out last year that despite assurances from economists that outsourcing was a phenomenon of minor significance, it "is a very big deal that is only going to get bigger, with far-reaching consequences."

(snip)

When the loss was merely manufacturing jobs, economists and business leaders could dismiss the loss by arguing that it left the U.S. economy free to "to do the high-value-added, sophisticated services and high-tech development," Prestowitz says. But now it's clear that Indian and Chinese engineers and software developers are perfectly capable of doing many of those jobs as well, and doing them at a fifth of the wages that their U.S. counterparts earn, or used to earn. Even if jobs are not moved, "the threat of movement will operate to keep salaries low." For California, as for other high-tech regions, as Prestowitz says, that "is a very big deal."

(snip)

Among those reforms:

Bolster and depoliticize federal support for basic research and development.

Replace the nation's wasteful health care nonsystem with a single payer system, which would lift a large competitive burden from business (and relieve stress on state and local budgets).

Develop a national energy policy, including higher gas taxes, to spur efficiency and sharply reduce dependence on imported oil and gas.

Restore the estate tax and other levies on high incomes to reduce public borrowing, improve the nation's infrastructure and support improved funding for children's and other social services.

Stop insisting that schools can solve all our economic problems. Education is a necessary element of a successful high-tech economy; it's emphatically necessary to help reduce social inequities, and imperative for civic and humanistic understanding and democratic unity. But it's not enough in a high-tech global market where many jobs can be sent overseas at the click of a mouse.

Schrag can be reached via e-mail at [e-mail].


Find this article at:
http://www.signonsandiego.com/uniontrib/20050630/news_lz1e30outsour.html

[NorCalDem]

1. If there is a Revolution...

and we throw off the shackles of the system we have now, will we have to pay back the national debt?? Just curious

[question everything]

3. There will never be a revolution

Too many have been brain washed with the "American Dream" that they, too, can become a Gordon Gekko or a Donald Trump.

Thus, instead of asking why CEOs in the health care industry have $90 million compensation while millions lack access to basic health care, they choose to dream that some day they, too, will make these millions. And, of course, they will be against redistribution of wealth.

And when they are getting old and realize that they will never be as successful as they were dreaming, they tune in to talk radio to blame someone: liberals, minority, foreigners..

[XemaSab]

6. Good question

we can always restructure as a different country...

I like the name "The United States of XemaSab," personally...

[EVDebs]

2. India DEMANDS 195,000 H1B visas which displace US workers

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114x16623

This visa is particularly destructive since the DOL supports it and won't allow fraud investigations.

[getmeouttahere]

4. Along the lines with what I've been saying....

conservatives are fond of saying, "if you want to improve your situation, go back to school, get a better education." So let's say everybody does exactly that, who's creating the better paying jobs, Wal-Mart??? That is assuming you can even go back to school because they are cutting Pell Grant funding and you have to work 2 lousy paying jobs just to make ends meet, which in and of itself could prevent you from going back to school.

The author of this article is basically calling for a re-prioritization of American domestic, and by extension, foreign policy, something which is extremely unlikely under BushCo

[phoebe]

5. Marvin Bush doing business with the "founder" of Indian outsourcing

Mr. Purnendu Chatterjee of the Chatterjee Group.. does that answer part of your question? Google and you'll see..