Giant Sucking Noise 1319
bsharma writes "The next round of globalization is sending upscale jobs offshore. They include basic research, chip design, engineering--even financial analysis. Can America lose these jobs and still prosper? Who wins? Who loses?" News.com has a related story about outsourcing.
Uh... (Score:3, Insightful)
The American People do. The American Corporations win. Just as they always do.
Re:Uh... (Score:3, Insightful)
More trade promotes peace. How likely are we to bomb China, with Intel and everybody building there? We're better off trying to have a good relationship there and influencing them, instead of rattling the sabres.
So the American people win, because wars destroy wealth.
Re:Uh... (Score:4, Insightful)
The programmer in India can't sit down with them and hash out the problems and potentials of different design solutions, and figure out which one works best. They have to hope that the people they communicated the designs to have a perfect understanding of their company, and hope that they can code to that.
Honestly, if computer professionals weren't overcharging already, we probably wouldn't be in this position anyway.
Re:Uh... (Score:5, Interesting)
On the other hand, as long as I can make a living, I'm not going to begrudge someone in India, Russia, or other place their ability to make a living. What I object to is when the savings from outsourcing do more than keep a corporation afloat, but actually continue paying obscene salaries for CEOs. Perhaps we need to outsource board-level jobs to India and Singapore and Bulgaria. It's only fair. Don't you think?
Ramblings on overpriced labor & ecology (Score:5, Insightful)
I think what Americans may not realize is that they are pricing themselves out of work and assuming that the rest of the world can't possibly develop the technology, skills and resources to do what America has. That is a shocking bit of arrogance, and likely the cause of the current "crisis". If there is an exec candidate from Bulgaria that will work for a third of what some American then guess which is a better business choice? All things being equal aside from salary demands makes the choice pretty simple.
The other nifty thing about a free market is that change isn't always to YOUR benefit, but it may be for the benefit of the system itself. Its like an ecosystem. You are selecting yourselves out of jobs. Its like a predator that can only eat a certain type of high-quality meat and only if it is fresh and only if variable A, B, C, and D are in place. Guess what? A predator that isn't so damn picky is going to flourish unless something else exists in that ecosystem to keep it in check. You could try to legislate the problem away while the rest of the world learns to adapt, resulting in isolation. The risks are obvious if you look at the issue from this perspective, so I won't try to lay them out further.
The answer could very well be in the CEO salaries, but somebody in charge deserves credit for success. Back to the ecosystem perspective, consider this: the biggest lion gets the most meat. Even if that meat is rotting and the rest of the pride can't survive. Eventually that big lion dies too. Basically what I'm saying here is that I don't entirely disagree with you specifically.
Re:Ramblings on overpriced labor & ecology (Score:3, Insightful)
This isn't to say all CEOs are incompotent, there are certanly some that are exceptional and were the keys to a company's success or failure, but most of them aren't any better than anyone in middle management - they just have the right connections.
Re:Ramblings on overpriced labor & ecology (Score:3, Interesting)
This is how much a programmer costs in India. Its not that they are willing to work for cheaper. Its more like 7/hr in India is alot more then here. Infact 7/hr can not even meet ends meets here in the US. These corporations know this so they are just outplacing instead of hiring Americans for reduced costs.
Infact I myself would be willing to work for 11/hr developing websites or working with c++ or java. No joke! Many of you would gawk at this but I am desperate right now.
When selling foreign items in the US or Europe, a protective tarrif is placed. This tarrif is used to protect the Country's interests and products so they can compete on the market. The same should apply to labor. If a thailand shoe maker for example company could sell a pair of sneakers for $1.20 here in America, I think Nike and Reebox would have a fit. Why can't we?
Re:Ramblings on overpriced labor & ecology (Score:3, Interesting)
One of the reasons that downtowns have been in bad shape in many places, and why so much light industry and office space has moved to the suburbs, is because downtowns are silly in a world where it's not hard to deal with people more than half a mile from you. That changed a while ago, with cars and phones and fax machines, and the expensive density and concentrated demand of downtowns was no longer warranted. Successful downtown areas exist now based largely on prestige and legacy infrastructure, not function.
But obviously that's not why people can live on so little in India. Sure, the real estate is cheaper, and it follows rent is cheaper too, but that's not enough to make the difference. You can find cheap land in the US too, but Gary Indiana hasn't become a high-tech mecca as a result.
Something they do have in India is lots of people that work for much less than $7/hr, and that saving is passed on to everyone else (with the expense of great poverty). We have some of that dynamic, but not to the degree of India.
But I think people don't realize what prices are really like in other countries. I've never been to India, so I don't know quite what it's like there, but from what I've seen in Latin America it's not what people think. I doubt it would be that much cheaper to live in India if you were living by American standards. After all, a lot of the products are global products -- electronics, clothing, etc. -- and you might save some of the retail markup but nothing else. Simple food tends to be cheaper, but packaged food like so many of us are used to isn't that much cheaper. You basically save on outrageous markups (eyeglasses sure are cheap!) and labor (which admittedly is significant -- but you have to get used to being surrounded by abject poverty).
I think a big part of the difference is that the Indian standard of living isn't like the American standard. You don't expect the same things. I know in Latin America it seems quite unusual to move away from your parents until you are married or at least in your mid-20s. And the dynamic is totally different than here as well -- living with your parents doesn't mean you're a slacker. There's lots of other things they go without. You don't have a yard. You don't have a lot of personal space or privacy, you might share a room with a sibling well into adulthood. You don't eat frozen food for every meal, you don't wash your body in water you could drink, you can't put your toilet paper in the toilet, etc.
And you're right, you can live on very little here in the US. I know people who live happily on next to nothing except the modest kindness of others and the excess of our society. I've lived on income equivalent to $7/hr (though my hourly rate was much more), because I decided working less would make me happier than having more money. If more people in the US had the values and the skills to live thrifty lives -- no, not thrifty, simply economically sane -- it would benefit not just our society (if not our economy), but would have a tremendous effect on the entire world.
But of course none of this is fair when desperation is part of the equation. It's not fair if they are working for so little because they would go hungry if they did not. That's when the free market just becomes a cover for the machinations and conspiracies of the capitalists -- labor markets have been manipulated far longer than energy markets or operating systems. Laborers can only be real participants in the free market when their needs -- if only their perceived needs -- are significantly exceded by their earning potential. Otherwise we are inevitably slaves to capital. Anti-consumerism is a revolutionary concept in a nation like ours.
Re:Ramblings on overpriced labor & ecology (Score:4, Insightful)
Um, CEO candidate from Bulgaria? Do you have any idea what CEO's do for a living? CEO's are not hired for their brains or vision or technical ability. They're hired for their ability to make deals, which means using their political and business connections which they didn't get in Bulgaria. Do you really think Dick Cheney would have become CEO of Halliburton if he hadn't first been Secretary of Defense so he could sell Halliburton services to the military? That George W. Bush would have been on the board of Harken without first being the son of a Congressman? Of course there are exceptions, but for the most part these connections come from the boardrooms and the golf courses, and get started by being born into the right families and getting "legacy" admissions to the right universities so they can connect up with other such scions (think of GWB at Andover and Yale). The CEO business is not a meritocracy. It's much closer to a hereditary nobility. Our society is much closer to feudalism than we like to imagine. See the article How to become as rich as Bill Gates [greenspun.com] to learn how you can join in. Having connected parents is the one thing that can't be outsourced.
Re:Uh... (Score:3, Insightful)
1. Move jobs overseas, and pay a mere fraction of what you are paying to American employees.
2. Don't pass the costs on to middle class Americans, thus causing money to move from the middle class, which is getting laid off, to the utlra-rich.
3. Encourage Americans to make up for loss of income by working longer hours and going into massive amounts of high-interest debt.
4. Lay off more American workers.
5. As US workers begin to default on home loans and auto loans, buy back their homes and their possesions for pennies on the dollar.
6. Use this massive amount of wealth to buy the capital of other countries(such as land and natural resources) for pennies on the dollar, since there is no way that an Indian worker making 11,000 a year will have the buying power of a multi-billion dollar company.
7. Now that Americans are as destitute as the the 3rd world, and the economy has slowed down, there is no longer a need for 3rd world workers, so fire 3rd world workers and grab all of the productive resources.
8. Smile, as you and the top 1% of the world's population own the majority of wealth of the world, and have a desperate, hungry population willing to do anything to serve you.
Here is the thing to keep in mind about the worker in India. There increase in wealth is only temporary! The majority of profits from their work is flowing into the hands of ultra-wealthy Western investors. While it is arguable that they can "live like kings" on $11,000 a year, this does not mean that they can buy capital. And this is the problem, since if they can't form their own business and make profits of their own, then they are getting used just as bad as the American middle class. Think about it, if someone in India wanted to compete head on with US software, they would have to market their products in countries that would buy these products for the most money, such as the US. But marketing and advertising, as well as buying capital such as computers, is expensive, and US companies have a distinct advantage in this area, since they have alot more capital. So, while it may appear that Indians are propsering, the majority of these profits are going to the ultra-rich. Once the leaching of wealth from the 1st world middle class is complete, there will no longer be a need for foreign workers, the economy will collapse in a very similar way to the 2001 "market correction". Only, it will be much worse.
So, let me repeat, this isn't about increasing profits, it's not about helping the 3rd world, it's about consolidation, pure and simple.
Re: Outsource Australia (Score:3, Troll)
I think the fear that our [american] economy will collapse if jobs move out of the geographic country is naive, in that it doesn't properly examine whether or not the money actually flows in different directions: if the money still comes into the US eventually, it works.
Re: Outsource Australia (Score:5, Interesting)
Is this somewhat painful? Yes. Does it help in the long term? Most definitely.
Do you really think that the mid east would be in the situation it is today if there was a wide diverse economy over there?
Painful? Yes. Helps long term? I don't see it. (Score:5, Insightful)
Think about all of the jobs in the steel industry and raw goods refining that used to be housed in the US. I was born in a region that housed booming towns that thrived on the steel, zinc, coal and cement in Pennsylvania. I can tell you firsthand that when refining was able to be done for 87 cents in Asia, the companies left town, the towns dwindled, and the equipment sat under 30 feet of water at the bottom of the quarrys. Was this good for us? The people that live there are just simple folk scrounging as best they can in small, dilapidated houses. Yeah, I guess they're only a mile from the nearest McDonald's, maybe they are better off than Hong Kong.
Oh, and guess what? A major factory and headquarters of Lucent (now Agere) used to be housed there, they even built a state-of-the-art Optoelectronics factory a few years ago. What happened when the bottom dropped out of optoelectronics? It was cheaper to manufacture in Asian countries, so tens of thousands lost their jobs. The new plant was sold for $40 Million in a fire sale, the grounds and any one of the many buildings were easily worth that much.
It's happening all over again now. Tell me how that's good for my town, Waterton Man.
You're right, I don't see it. (Score:5, Insightful)
How is offering a good job at a high wage (relative to the local economy) exploitation? Perhaps you ought to talk to some of the programmers who work in India and ask them what their other career options were like.
"It's happening all over again now. Tell me how that's good for my town, Waterton Man."
It may not be good for your specific town. And if that's all you can look at then you have a very narrow world view.
-- this post written by someone who lost their job to cheap Indian labor
Re:You're right, I don't see it. (Score:4, Interesting)
American companies don't need high-cost burger-flippers with a PC, they need effective, efficient IT professionals that can justify their salary with corresponding efficiency
Simon
Re:You're right, I don't see it. (Score:3, Insightful)
Just because when you convert their income into dollars, we are making 20x what they are doesn't mean that we are instantly richer then them. I'm sure you can find some countries where the richest people there have no more money then an average person here, however there they can live in huge expensive houses because their money goes farther there.
Re:You're right, I don't see it. (Score:5, Insightful)
Angry != Rational. If they are angry, they are bitter. I could understand "frustrated."
I understand the posters feelings exactly. I know 100's of college students who graduated with degrees and cant find jobs in *any* field let along their own field ...
It's a tough economy right now. There are people with decades more experience than your 100's of college students that are also looking for jobs.
This is also due to the bubble that exploded a couple of years ago. Too much unneeded help was hired, too many students saw $$$ in the industry and started studying that. Now the bubble has popped, all the "extra" IT people that were unnecesarily hired during the bubble are being shed, and those that studied IT expecting a lot of high-paying jobs miscalculated.
They are delivering pizzas and living with their parents and they are *livid* that they paid their dues, played the game, did what they were supposed to, and are being shit on, disrespected, and told they are worthless by corporate america.
Oh come on... Some college students that have spent 4 years in college, probably having some amount of fun along the way, think they have paid their dues? They think they're being shit on because they happened to graduate in the middle of a recession? They think they for some reason *deserve* a job when they have 4 years of college and no experience when their resumes are being compared to professionals with decades of experience AND college? Come on...
They aren't worthless, but they aren't unique. Many others have their skills and if Corporate America needs exactly 100 of them, why should Corporate America hire 120? Even if we agree that the executives are earning too much, if you reduce their salary is there still any reason to hire 120 of them? They only NEED 100. Such is reality in a recession.
If this trend continues, there really will be a "revolution."
Sounds to me like spoiled college kids raised in sheltered homes listening to too much rap music and wanting to rebel against anything given the opportunity. Sounds like kids that truly don't know what "hard times" are. Luckily, I don't have any first-hand experience either. But the fear during the Cuban Missile Crisis... the rationing of goods during WWII... Surviving the Great Depression. THOSE were bad times. We aren't in bad times now, we just got used to an inflated bubble of fake growth--and that bubble burst. Sorry.
Tell your college friends to get a grip. Delivering pizzas and living with their parents IS part of their "dues."
Re:You're right, I don't see it. (Score:3, Insightful)
And trust me, I know what it's like to come out of college in a crappy market. I graduated in 1994. Remember that recession? And that was before the IT boom. IBM told me that computer engineering wasn't a "real degree" and to come back when I had one. Lovely. I worked in a grocery store for 5 months.
So don't whine to me about being disrepsected as if you're the only one.
Re:Painful? Yes. Helps long term? I don't see it. (Score:5, Informative)
Self serving baloney pumped out by the steel companies. If that fable was true the European steel industry would have gone as well.
Asian steel producers costs are considerably greater than the 87 cents you quote. It costs them considerably more to ship their finished product than it costs the Us producers. They also have much longer lead times because of the transport time and so they are unable to address markets where quick turnarround is important.
If you read 'the Innovator's dilema' you will find the real reason for the decline of the US integrated steel mills, they were made obsolete by the cheaper to build mini-mills. There are still successful and profitable steel producers in the US, they are the ones the use mini-mill.
The integrated refiners have two major problems, the first is that they massively underfunded their pension plans for the past 20 odd years so they could claim to be profitable when in reality they were not. This allowed them to delay restructuring for 20 years past the time when the EU producers restructured.
The second big problem is that the integrated steel plants are not earning their cost of capital. This is the same in every country regardless of labor costs. 30 years ago when mini-mill technology first appeared the product was only fit for the least demanding uses. Over time the mini-mills have gradually more efficient and produced higher quality output so that today they provduce steel for car body panels which is pretty much the most demanding mass application. About the only market that is not well served by mini-mill today is steel for hand-fashioning by blacksmiths.
Of course the nationalist fable is a much easier sell, even though the message it sends is ultimately defeatist.
Re:Painful? Yes. Helps long term? I don't see it. (Score:3, Insightful)
On the other hand, this makes me leery:
Less developed countries still lack the legal framework to help their citizens avoid devastating exploitation - in labor, in environment, in transparent courts, for example (not that American institutions are in such great shape right now...). So yes, there are many potential benefits to well-managed globalism. The problem is that much of the free trade corner is heavily populated with people who want the benefits of free movement of capital, but without kicking down for corresponding assitance (in developing institutions), or making sacrifices on our side like opening markets. This limits the spread of true globalism, and doesn't help address the unacceptable levels of poverty in the world.
Not trying to presume your position on any of these things, just felt they should be elaborated on.
How's it feel to be a middle man? (Score:5, Interesting)
Blockquoth the poster:
America makes its money by being at the ultimate junction point of capital, intellectual property, communications, and business management. We're the deal-makers and the facilitators. We don't build anything ourselves because we're content to skim a little bit off the top of everything that passes through our hands.
However, sooner or later, all those other countries to which we've outsourced our industrial base will realise that they really don't need us. When they get their acts together, they'll just start dealing directly with each other. And when that happens, watch this Pax Americana come to a screeching halt.
I predict it will happen within the next 50 years, if all things continue as they are now...
Re:How's it feel to be a middle man? (Score:5, Insightful)
Re:How's it feel to be a middle man? (Score:4, Insightful)
Yes, eventually the labor costs over in places like India are going to rise while at the same time labor costs here will fall... An equilibrium _will_ be reached eventually (pictures cities in India looking a lot more like American cities and cities in the US looking a lot more like Indian cities)...
The problem is that it will take a generation or two for this to happen and in the meantime we're going to have a lot of displaced workers here in the US trying to eke out a living at much lower salaries then they pervioulsy made.
Re:How's it feel to be a middle man? (Score:4, Insightful)
I don't see the doomsday scenerio you suggest, rather I see everybody competing on a more even basis and the worldwide standard of living improving.
Well sure, the worldwide standard of living goes up, but that means that the Western standard of living goes down. Take a look at how much the average American consumes (in terms of food, natural resources, etc) and pollutes. Can you imagine if every citizen of India and China did the same?
If you don't think it's us vs. them then you're being naive. No, the real winners will be the countries with oil. Mad Max, here we come!
-a
what gets bought and sold (Score:4, Interesting)
After (china primarily) have their full vertically integrated industries setup,(close now) they not only won't need to buy our stuff, there's no way any of our stuff would be cheap enough for them to bother with, because they will have a large enough internal market. all they will need to trade with then is for oil and other raw materials. And this goes from agricultural products all the way to high tech and everything in between, they won't need us, not a nickles worth. They will continue to export as much as possible, but only to places that have actual hard currency of value or have the materials they need. Our dollar is dropping in relative value. although till used widely, it is and will continue to be devalued, especially if gold backed currencies become required for international balance of trade payments. The current balance of trade numbers prove this with no shadow of a doubt. Other numbers I have seen have china as potentially surpassing the US around 2015 or so, although I personally believed that mass global warfare will occur before that time, basically over resources and who controls the planet. In fact I would maintain world war 3 is already in progress.
The US is living on credit and inertia and a severe case of the denials right now, we are en-screwed. As will be pointed out around the thread, people take a cavalier attitude and say theoretically it's a 'good thing" - until they lose their jobs and start the cycle that millions are on now, lose job, hunt for job, get job paying less, lather rinse repeat until you hit a brick wall with NO job.
The job loss stats are SO bad, they stopped reporting them, claiming they ran out of funding, which is a political dodge. this was a major story that didn't get much coverage, but is important for everyone to take a look at.
url to my last statement
http://www.bls.gov/bls/mlsdiscontinued.htm
text, short and to the point and anyone should be able to read between the lines here
What is the status of the Mass Layoff Statistics (MLS) program?
The Mass Layoff Statistics (MLS) program has been discontinued. Since 1994, the Department of Labor's Employment and Training Administration funded the MLS program. That funding ended on December 31, 2002. The Bureau of Labor Statistics (BLS) has been unable to acquire funding from any alternative sources and had to discontinue the MLS program as of that date. Limited historical data and documentation will continue to be available on the BLS Internet, at http://www.bls.gov/mls/.
Last Modified Date: January 2, 2003
Jobs in the US are NOT being replaced by the numbers, nor are wages going up, speaking in general terms, we are dropping, and fast. It's being manipulated to appear like theyare going up slightly, and even that is a scam, theypulled food and fuel from the consumer price index for example. They are lying, avoiding real numbers, basically pulling an enron accounting modal on an across the board obfuscation to this system to not panic the herd. They are doing the same things with the major market indices, in particular they remove tanked corps as fast as possible to keep those numbers artificially inflated. If you were to do (now timeframe) an historical records match, and keep the tanked companies over the past few year period and reconfigure the indices those charts would look a lot worse than they are now.
IMO
This is an extremely involved subject but the gestalt is we got shafted by literal traitors. Internationalists who are loyal to no one beyond their own power and greed and to whichever global cartel constitutes their gang. This was done on purpose to further a heinous (ultimate) agenda of a global two class fascist society, which I term technofeudalism. It is akin to wolfpacks fighting themselves, but all united in staying wolves over the herds.
I had these same arguments on forums years ago, I was saying the same thing then as I am now. I have personally since heard from people who vigorously disagreed with me then, conveniently when they were sitting fatcity on their dotbomb poker chip improbable beyond belief stock portfolios and a great paycheck. Now, a lot of them have changed their viewpoints 180 degrees, because they got bit, and bit hard. their stock profits turned out to be mostly vaporware and so were their jobs, and not even new jobs then, old jobs they had. Industry after industry has been destroyed or reduced to ridiculous levels. And not buggywheips, critical strategic infrastructure.
That is almost the only way for some people to get from casual ho hum academic styled discussion to back down on the ground in the real world, to just have it shoved in their face up close and personal. THEN they understand better the full ramifications of what's going on..
It's no suprise to me...... (Score:3, Insightful)
The west sucks when it comes to reliable cheap engineering these days, why? I would put forward the cycle of redundancy and hiring as one cause.
Look at all the network giants, they get worried when the share prices dip, the shareholders complain and to stop the falling share price they "streamline" their operations. A year later they can't do the projects as they don't have enough engineers and then begin recruiting again. Trouble is useful knowledge of their products leaves when the redundancies are handed out. Yes, there's supposed to be documentation but is it always updated? rumours about the documents Microsoft have released as part of their more open stance have stated they're incomplete and inaccurate.
US and European companies need to average out the peaks and troughs. By not spending huge amounts of money on corperate trash when the money is rolling in fast you might be able to see yourself through the bad times. Being economical and efficient is a full time job IMHO.
Re: Outsource Australia (Score:3, Informative)
Government has to intervene to make "capitalistic endeavors" possible. Who issues corporate charters, land deeds, copyrights, patents...?
Article I, Section 8: "To regulate Commerce with foreign Nations..."
Only to the extent that one defines "better economy" as "more stuff being sold" - regardless of what type of stuff. Should economic policy be directed towards maximizing GDP, or towards providing for human needs and wants? After all, US GDP grew a lot during World War II.And here I thought that sound (Score:5, Funny)
Cycles (Score:3, Insightful)
Re:Cycles (Score:5, Insightful)
Why shouldn't the wealth get spread out a bit? I mean God forbid someone in India gets a well paying job and gets to look forward to their children actually having a future.
Re:Cycles (Score:4, Insightful)
I grew up dirt poor in a coal mining town in Western Maryland, I know what it's like to freeze my ass off because there was no heat. I know what it's like to have to shop at the goodwill and take hand outs from churches because we had no food at home. And It wasn't a choice brother.
If you were standing right here in front of me I'd give you an "eye opening education" you wouldn't forget. Your ignorance is only outdone by your disrespect for the world's suffering. Get a clue. Read a book. Do something you twit and do it fast before irony catches you and one of life's "choices" beats your ass.
Re:Cycles (Score:3, Interesting)
That may be true, but it's as often as not not their choices that make the difference. You may, in the words of Henley, be the captain of your soul, but that's about it. Circumstance is an uncanny beast, and by far the best predictor of socioeconomic success is the socioeconomic success of ones parents.
At what point did you make the choice to better yourself? Abraham Lincoln learned law in his spare time in order to better himself, and that was a choice.
The problem is: on top of the fact that material or financial assets are subject to all kinds of quirks of fate, and some starting stakes are much more favorable than others, any individual's skills/labor -- the only thing you can exchange once your assets are depleted -- can fall below a magic point where they're so ill-valued that said individual is required to sell all their available time to meet minimum obligations for staying alive. Once you pass this point, it's nigh unto impossible to change things. The only way to do it is to find a way to get your support for free while you put time into improving skills. The list of ways of doing this is pretty short: generosity of others, generosity of society, crime, and the armed forces. The later two risk your life and freedom. The former two aren't guaranteed to produce anything, especially if attitudes like yours become pervasive.
And this state can easily come about because of changes in a society which alter demand for skillsets in a way no one might have forseen. I'm a decent programmer with better mathematics and design skills than most, eight years of experience, and a college degree. Finding a software job has been pretty difficult over the last 8 months. I'm fortunate that I've had generous family members to cusion the fall, unemployment to boot, and have skills I can try to fall back on, but the fact is, eight years ago when I made the choice to pursue this, nobody was predicting a dip in demand or glut in the labor market for programmers.
I will admit that there is a miniscule number of people that have just been dealt a really really crappy hand in life, but there is absolutely nothing in this country stopping a person from not being poor.
A larger number than you think. Go read the census data from 2001. 10% of adult men were earning less than $2500. 20% under $10,000. This is choice-between-food-and-health-care conditions, if you're single. If you have a family, I don't know how it works at all.
The good news is that mobility is higher here than many places in the world, and I recognize that personal pluck and responsibility plays a huge role in that mobility. Self-determination is as (or more) possible in American society than it is anywhere else. But the fact remains that your starting stake, sheer fortune (or misfortune), and other things beyond most people's foresight also play big roles, and nobody should be quick to judge anyone lazy because simply because they're down.
Re:Cycles (Score:3, Informative)
Outsourcing is a technique used to cut costs and maximize profit, not lower prices. Competition is what lowers prices.
an organized boycott against those companies should be implemented
Your economics is oversimplified.
Let's say Microsoft is required to hire only Americans. Because of their increased labor costs, their OS becomes more expensive. Now, an Indian software company finally perfects that Windows clone, and sells it for cheaper because their programmers cost less.
It is now your (patriotic, whatever) duty to buy Microsoft, even though it's more expensive. Are you now happier? I doubt it. If Microsoft then lobbies to ban the importation of the Indian Windows, you'll probably be even less happy.
However, if Microsoft is free to outsource, then you the consumer is certainly free to buy the cheaper clone, and actually save money. (Of course, you'll have a harder time finding a job, because you're competing with the whole world. I'm not saying it's easy.)
The trouble with your logic is that it can be applied at any level to limit competition. You could certainly say that Microsoft is hurting California companies, because it's cheaper to live in Redmond than in San Jose and so they manage to get cheaper programmers.
Re:Cycles (Score:4, Insightful)
Re:Cycles (Score:3, Interesting)
But consumers get a direct vote on every market issue every day. Every time you spend a dollar, you are casting a vote on what products and services you like. Consumers seem to like low prices. I think that want you want is an ANTI-consumer union. Don't expect many consumers to _vote_ in favor of this.
Economics is not a zero-sum game.
The choice (Score:5, Insightful)
The bottomline: If we don't send jobs abroad and reduce our costs, we'll end up sending customers to other countries!
Wouldn't that be worse? Let us say there is a law against American companies having their work done by foreign workers. Let us also assume that we stop all immigration, since most people who want the former want the latter too. That would make American products much more costlier.
So, foreign companies will develop the same products with lower costs and end up hijacking the marketshare. Is that really better for American prosperity?
Re:The choice (Score:3, Insightful)
So IMHO, the answer is to discourage extreme outsourcing by doing the following:
1. End corporate welfare (because it's just plain stupid)
2. Raise import taxes (to offset blue collar outsourcing)
3. Levying taxes against corporations that excessively outsource white collar jobs (to offset white collar outsourcing).
4. Offer tax breaks for corporations that use mostly American Labor.
I know. I'm a bastard for suggesting we do what EVERY other friggin country does. So be it. Worry not, none of this will start happening until the United States has been gutted beyond all recognition. Just like the United States won't change major energy sources until we've gutted the world's oil supply. It will happen when, and only when, the alternative is our own destruction.
This scares the s*** out of me... (Score:5, Interesting)
As you might expect, this worries me a lot. I'm fairly secure (I think), because they need at least one person here that knows English and Java and can understand the customers and do the face-to-face, but in the long run more and more places are going to look at the savings and ship the work overseas.
I've got two kids, 9 and 12, and I'm at a loss for what direction to steer them in career-wise. I used to think Engineering was the answer, since I've really enjoyed my, what, 20-odd years of slinging code. But by the time my kids are college-age, god knows what will be left in the US besides burger flippers, doctors, and lawyers.
-- ac at work
It sounds like your job can't be oursourced (Score:5, Interesting)
Wait, let me get this straight. I'm assuming that your four-man operation replaces a three-or-four man operation in the U.S. Let's say salary costs are $50,000 per U.S. programmer, $15,000 per Indian programmer. A four-man U.S. team is $200,000 a year, while a one US, three Indian team is $95,000, for a savings of 48%.
Great! Your company now has an extra $105K to spend! Either you get a raise (not likely), or another team can be created, employing 8 programmers where four were employed before (and allowing your company to do more work). Of course, the real ratio is a little higher - you need slightly more support staff (management, office workers, etc) to support twice as many workers, on both sides of the ocean, so it's possible your company could jump from 4 workers to 10, for the same amount of money. Seems like a net good to me.
Further, the U.S. is the top market for high technology products, because we have the extra cash to spend on them. Increased employment in other countries raises their GDP, which means they can better afford high-end toys, which means they get cheaper and better for us, etc. etc.
Take a look at the numbers - globalization has been in full swing for a few decades now, and the U.S. has the lowest unemployment rate in years - lower than they thought possible a decade ago! Almost everyone wins when the people that can make a product the cheapest are allowed to do it. The only ones who lose, in the short run, are those who are displaced by the production move. The remedy for that is short-term government support, and the best way to get out is to acquire new skills.
Tell your children to become engineers. The problem-solving skills you learn will help them easily jump from career to career, as needed. Encourage them to take some liberal arts classes, too, to make them think more flexibly and excercise that right brain a little. May I suggest an economics class?
Re:It sounds like your job can't be oursourced (Score:5, Insightful)
Wrong. The CEO gets a $105,000 raise.
Next.
Re:This scares the s*** out of me... (Score:3)
-AP
The job category that'll never get outsourced... (Score:3, Insightful)
They cut costs by outsourcing real workers' jobs, and that's how they earn the big bux.
IMHO, the real problem with CxOs isn't that the pay scale is too high. It's just that in general, today the jobs are being held by a bunch of bozos who are overpaid for their performance.
A 7 or 8 figure CEO ought to be able to see the relationship between laid-off workers and the economy that's prompting furthre layoffs.
A 7 or 8 figure CEO ought to see that health care is a difficult problem, and that at some point we need to just plain face it and begin taclking it. Maybe Clinton's attempt back in 1992 was a mess, but since all we've done is try to ignore the problem, raise premiums and co-pays, and apply too many managers to the problem, sucking up money that should be paying for health care. (Last I heard, 25%-33% of health care money is going toward "management" costs.)
A 7 or 8 figure CEO ought to understand more about the macroeconomic nature of the US, and bear partial responsibility for it.
My requirements for a CEO at 50X worker's pay are much lower than those for a CEO at 200X+ workers' pay. IMHO some of today's crop isn't even that good.
If these bozos were at pay-for-performance, the US economy wouldn't be in the toilet. Their primary talent appears to be obtaining money.
Re:The job category that'll never get outsourced.. (Score:3, Insightful)
Exactly. But isn't that the goal in capitalism? I don't see the problem as being ignorant masses, like most CEOs. I see the problem as being money, plain and simple. It doesn't matter how many jobs people have, it only matters if we get the work done, if we produce and distribute the products so we can cloth ourselves and eat. It only matters if we work to design the products, not if we take home a few pieces of paper that says we put in 8 hours @ $25/hour. That's the problem with our society. We waste way too much time worrying about insignificant details like a few extra pennies. In the end they don't matter. The only thing that does really matter is our experiences throughout our life. I, for one, would rather not have to deal with the experience of managing money, including interest, taxes, bills, etc. And I'm willing to say "Hey, go ahead and have a free meal, on me." I'll continue working in such an economy as long as we improve the work environment. That's all I ask.
But this is all philosophy and as of right now most people think our system works just fine the way it is. Philosophy is discouraged in the US.
It is scary... (Score:3, Interesting)
The forces driving fundamental change are several, including regional cost differentials, market power relations, and globalization of IT industry. Most importantly, however, the U.S. IT industry has become an amazingly capital-intensive economic sector that no longer has access to capital. The floodgates have been opened. I doubt they can be closed.
This is nothing new, this happened to blue-collar workers years ago, and now it is moving up the chain.
The only way I can see to compete is thru advancing the technology in the field you are in, and keeping those technological advancements as industry secrets. You will have to create BETTER products in LESS time if you want to compete with people who can be paid tremendously less than yourself. Sending work overseas has an inherent cost, and language barriers, and assorted other problems, but unless you can create something significantly better, you are going to watch the jobs go away.
I am not claiming I have any solutions, just agreeing that it is a scary fact. I think if it becomes a huge issue, you will see the middle class rise up in anger and fight it tooth and nail.
My name is Robert, and I am a software developer.
Re:This scares the s*** out of me... (Score:3, Insightful)
Wrong. The blue collar standard of living in this country is under considerable assault. People who once had good job security and whose job afforded them access to a middle class lifestyle have seen massive downward pressure on both their wages and their standard of living. Blue collar workers in the U.S. in the post-war decades lived better than white collar workers in Europe. Now they live worse than blue collar workers in Europe. While the wealthy have seen orders of magnitudes of increases in their income & wealth levels, the middle class have seen only marginal gains (10% for the average family in the last 30 or 40 years). That 10% has come at the expense of wives going to work, children being raised in day care, less job security, etc. The average blue collar worker (individual, not family just cited) has actually seen their wages decline or hold even over the same time period, depending on who you ask. It was high paying manufacturing jobs after World War II that gave this country a true middle class society in the first place. We are now at a crossroads where we must decide whether that society is the model for the future, or a historical anomoly of a few decades shortly to give way to a more stratisfied, less equal one.
Look at what has happened in Mexico. Immediately after Nafta, the northern border region of Mexico expierienced a boom as U.S. firms moved their manufacturing facilities there to take advantage of Mexico's third-world low wage, low regulation economy and corrupt political system. Shanty towns were erected around these factories where people lived in squander. But slowly wages rose slightly, living standards improved, but alas corporate profits fell. Those companies have begun relocating their Mexican factories to China, where labor is still cheaper and the authoritarian governmnet keeps the labor pool more docile. So much for globalization benefiting Mexico. It is a race to the bottom, pure and simple. Jack Welch once said his favorite kind of factory is one on a barge where he can move it from shore to shore, wherever labor costs are lowest. I expect no more from him than this; he is a businessman. But my government should not be his agent to accomplish this. Moreover, these companies get to be so massive in the first place because of the economic system, rule of law, and infrastructure my government provides and my tax dollars pay for. I am buying something with that money, and it is not the right for G.E. to fire me and replace me with three Mexican day laborers the first chance they get.
Now, if the current trends prove sustaining, the same will happen to white collar workers. Meanwhile, the rich have retired to gated communities and private schools while public schools and other infrastructure crumbles. They control the government through big money donations, thus the never ending flood of legislation favoring their goals.
One final point. The Scandinavian countries tend to have the highest standards of living in the world, and they are also the most "socialist" in Europe. Also, because of the way the U.S. calculates its unemployment rate, it leaves out key groups that Europe does not (for example, people who want a job but have stopped looking because they cannot find one - the number of these people in the U.S. has gone up rapidly in the last few years). If you take into account these groups, our unemployment rate is actually about the same as much of Europe's.
Remember, you do not have to sacrifice all on the alter of capitalism.
Vacation (Score:5, Funny)
You know, I feel as though I could use a few days off all of the sudden.
Economics: win/lose or win/win? (Score:3, Insightful)
If it's a win/lose game, then yes, jobs out means nothing coming back in.
But in a win/win game it may very well mean lower prices for everyone, with the added benefit of more exports out to those who now have more money and wish to consume American goods.
The key to the later is to keep producing solid American goods that people outside the country want. I think we've done a pretty good job so far and it'll probably continue.
Re:Economics: win/lose or win/win? (Score:4, Informative)
Money and power are finite resources.
That obviously isn't true. If it was true, we'd ALL be living in prehistory still, trying to eek out a meager existence in small hunter-gatherer bands, living to the ripe old age of 25-30, if we were lucky.
No, economies produce wealth (through the combination of base resources, capital, labor, increased productivity, etc. etc. etc.). Economies CAN and generally ARE win/win for this very reason. Economies at local, regional, national, and international scales grow far more and far more consistently than they shrink ... the very definition of the creation of wealth.
we're screwed (Score:4, Insightful)
It should be no big surprise. As we keep pushing things out of the US we have less and less real value.
We, as a nation, actually build very little on our own shores.
Besides the Natural Resources for Farming and Mining there is nothing here that needs to stay here. As we look for ever cheaper methods of production and higher profit margins, we will move the work to other nations.
We don't actually make anything of any value anymore. We are a nation of lawyers and marketing types. All we need now is an army of telephone sanitizers and we'll be all set.
Re:we're screwed (Score:4, Funny)
We, as a nation, actually build very little on our own shores.
[List of things deleted]
Don't be so negative. Look at the profitable things we are good at, which we are keeping...
- Marketing
- Management
- Litigation
- Buzzwords
- TLA's
- Entertainment
- Intellectual property licensing
- Patents
- Creative Accounting Practices
- Monopoly building and maintenance
Because of these strengths, I predict that the countries with strong economies that need some of these functions, are not good at them (or don't want to touch them), and don't have local talent in these areas will outsource these functions back to the US.Re:we're screwed (Score:3, Funny)
"When it gets down to it--talking trade balances here--once we've brain-drained all our technology into other countries... there's only four things we do better than anyone else: music, movies, microcode (software), high-speed pizza delivery." -- Neal Stephenson, Snow Crash.
Unfortunately, Neal was wrong, and software is moving to India, movies are moving to Australia, and our music sucks right now. But thank god, at least we still have the high-speed pizza delivery, and we probably always will.
Re:we're screwed (Score:4, Informative)
Here are the top domestic manufacturing categories from 1999:
2001 Statistical Abstract of the United States
Table 974. Manufactures-Summary by Selected Industry: 1999
Value of shipments (mil. dol.)
675,122 Transportation Equipment
458,485 Computer and electronic products
The first two combined exceed the $883 billion in manufactured goods imported from all countries.
429,053 (manufactured) Food products
419,674 Chemical products
(including, e.g., $108 billion pharmaceuticals/medicines)
277,117 Machinery
256,899 Fabricated metal products
(architectural metals, screws, nuts, bolts, etc.)
172,397 Plastics and rubber products
168,096 Petroleum and coal products
158,102 Primary metal
157,491 Paper products
119,792 Electrical equipment, appliance, and component
108,238 Miscellaneous
107,437 Beverage and tobacco products
102,404 Printing
According to the latest trade statistics
(http://www.wto.org/english/res_e/statis_e/its200
the United States is the largest exporter of merchandise, with $731 billion in
exports; Germany is second with $571 billion. China comes in sixth with $266
billion.
Re:we're screwed (Score:3, Insightful)
Something like: The United States ends up being good at only four things:
That may turn out to be one of the famous predictions of Science Fiction, like Arthur C. Clarke's prediction of communications satellites.
Heh -I posted about this a while ago (Score:5, Insightful)
Will there be U.S. Steel plants? Refineries? Agriculture? No. Will any durable good be manufactured in the U.S. No.
The only thing that other countries can't compete with the U.S.: the creation(in the loosest sense), distribution, and consumption of U.S. made MassMedia.
The war on terrorism is already a poor excuse for a reality-TV show, the war on drugs is an effort to direct your 'escapes' to more profitable, advertising-rich video and movies; the war on piracy is nothing more than a giant squeezing blood from a stone.
When all that is real has been lost to a soft, dehumanized, videodrone people - that is when the countries who have made the shovels, dug the ditches, grown the food, built the roads and cities in the U.S. - that is when those countries will walk in and quietly pick up the fallen reins of America, and sense may return.
I think I just choked on a pretzel.
I posted a dupe! I'm ready to be an editor!
Re:Heh -I posted about this a while ago (Score:3, Interesting)
And when, pray tell, will that be? Hoping that the global utopia will come about anytime soon?
You miss the point. The US is treating the world as its own private sweatshop. Look at the labels on the stuff you own sometime. Unless you're from Milwalkee, chances are you have a bunch of 'Made in ROC, Taiwan, Japan, India, Mexico, the Phillipines' ect. The only thing that no other county can make is American culture, and that makes more money for the people who market it than most anything else. Why do you think the **AAs go apeshit every time they see a CD-Burner or cable modem? It's the one thing that could hurt their bottom line - takes them right out of the ol' picture.
Name something that is made in the US that can't be made somewhere else and I'll give you a lolly. Example: I was at the bastion of US consumerism, "WALMART" and saw US Flag magnets, bumper stickers and plastic car window flags. Printed in small, but obvious letters was, "Made in China". Put that in your back pocket. Patriotism from three feet away.
I'm all for jobs coming back to America - I'm just thinking short term, you know? Before the earth falls into the sun. ;)
I'm a BofA employee in Charlotte NC! (Score:5, Informative)
What's really depressing is that these changes aren't being done to get BofA back in the black or because it's going down the drain. It's so that they can show 7% (or 4% or something, I can't remember) more profit than they did last year.
This is absolutely *killing* morale. People worry about jobs. A lot. Our group has actually lucked out a bit - due to the closing of remote offices and a couple people leaving for their own reasons, we've been spared - Our manager is fantastic, he's doing everything possible to keep from laying any of us off. But other groups aren't so lucky. Quite a few people were laid off today, so the rumor mill says.
It's tough. It's one thing to be laid off for poor performance - it's a whole other ballpark when you're simply getting replaced with somebody a little cheaper.
Tech Unions (Score:3, Insightful)
Tech Unions - Bad idea (Score:3, Insightful)
Also, I didn't go to school for four years to join a union. I do some private web development. I would be considered a scab worker if unions took hold. Why should I give n% of my income to a union if I work for myself and have no employees?
So stop voting for higher taxes. (Score:5, Insightful)
The US govt. needs to get spending under control so it can stabilize it's tax base. Also, implimenting a "Flat Tax" would eliminate the 100,000 pages of our broken tax laws and take the politics out of paying taxes. Much of the power in Washington is directly tied to the trading of tax favors for campaign contributions.
Re:START voting for higher taxes. (Score:3, Informative)
Any organization looking at relocating somewhere west, feel free to contact me at the email above. I am more than happy to contribute to the giant sucking sound coming out of Seattle... that is, until the officials pull their heads out of their asses as the parent post alluded to.
And why not! (Score:5, Insightful)
Circling the wagons won't work. (Score:5, Insightful)
My job is to insure that I can provide more value than the competition. This means that I have to do something that they cannot or I have to do something that they can do only better, meaning that I have to do it faster, cheaper, or with better quality.
That's just how it works folks. Deal with it and get cracking.
The predicted chain of events according to me (Score:3, Interesting)
2) People who are out of work cannot buy things made by corps who are farming out their labor to other countries. Companies see a mysterious downturn in profit and are unable to attribute it to the fact that people don't make any money and accordingly can't pay for things they are making money by farming out labor to fourth world countries, whose major export is dirt. Corps who are farming out their labor fold like sheets at a Motel 6 or move to country where their production facilities are. Now more people are out of work locally.
3) No profit! No company!
4) Repeat ad nauseam
Why do you think we are in the world of hurt we're in today? It's called Lowest Bidder. If you as Foocorp can save a buck manufacturing widgets, you'll save that buck because it means more money in your pocket. The downside is that in saving that buck you're going to put yourself out of business.
Wait about ten years. The results will be one of two things: depression to rival 1929 or bounceback as a result of these companies fscking over the US economy. Forget your interest rates, they mean nothing - the lowest bidder is causing our downturn.
Re:The predicted chain of events according to me (Score:4, Insightful)
Lowest Bidder (Score:5, Insightful)
Maybe the problem is not that "higher level jobs" are being displaced but that these jobs are no longer as important, thanks to technology. Penmanship used to be a CAREER until technology displaced it. Maybe it is not good enough to JUST be a programmer anymore. I program in PERL all the time (and admin my own LAMP), and I am a freak'n Financial Analyst (majored in Economics).
But I enhance my productivity by leveraging PERL to "Invent" new tools for financial analysis.
Instead of picking one career, maybe you would be safer picking two. That way it might be easier for you to invent ("you" not necessarily referring to the parent).
Re:The predicted chain of events according to me (Score:5, Insightful)
And I'm really sure that you always pay the extra for the brand name over the generic groceries, buy the triple cost pharmaceudicals instead of the generics, pay premiums above MSRP when buying cars, washing machines & other durables instead of taking advantage of sales...
Let's build an empire (Score:5, Informative)
Today the beneficial country may be India and Singapore, but as wages there begin to climb, those same companies will pack up and move elsewhere to start the whole process anew. There is no ethics in that, and there is no sense of responsibility in global corporations who continue in such endeavors.
Good to see... (Score:5, Interesting)
Hmmm... yah. Can't be. Those inumerable people against globalisation must all be out of their minds.
Re:Good to see... (Score:3, Insightful)
Comment removed (Score:4, Insightful)
Re:The American worker loses. (Score:3, Informative)
The truth is we import 68% more from Canada than from Mexico. What a spectacular failure for your theory.
Hint: read in an economics textbook about wages and productivity. The reason wages are so high in the United States and that we can afford the niceties of pollution and safety regulations is that we are so much more productive. As productivity grows in other countries, their wages rise, too. Forty years ago Japan was a country with wages lower than China has now. But by 1990 wages there were on a par with the U.S. The same thing is happening in Korea, Taiwan, Singapore, Mexico, Malaysia, and so on.
Leninism (Score:3, Insightful)
Outsourcing can hurt- people in the US do lose jobs here when jobs go overseas. But for every car, shoe, or software program which goes overseas, some person their gets a job. Their earnings go up. They spend money.
A software developer in India earning $20,000 a year might even have enough money to buy something from the US (OK, maybe they might buy a Daewoo instead of a Chrysler- there are models of Korean cars which are popular in India which are not even sold in the US...)
Do people here who worry about jobs going overseas not want to see the level of prosperity go up in India? In China? In the Phillipines? In Africa?
These considerations don't even begin to take account the benefit that people in America realize when goods and services become cheaper here. Sure you might argue that when living standards go up in Mexico, standards in our country go down towards that of Mexico- but remember that in the 19th century people like Marxists predicted that this would happen, that the world would constantly develop towards the edges. Of course, they predicted that when the edges are exhausted, the revolution begins...
immigration vs offshore outsourcing? (Score:4, Insightful)
I think that this is a reaction of smart corps on a stupid INS strategy. INS doesn't approve many of H1B application (no need to mention profGC applications) based on the logic: "it's a tough job market for americans and we should protect them".
But it doesn't count the fact that many H1B applcations are for positions which most of americans cannot fit due to limited education and skills. On the other side, smart corps doesn't care about americans - they have a job and they need it done.
So, no wonder they outsource the job offshore, where, by the way, the price for job is even lower. But now a big chunk of taxes is also gone from american budget.
Now I want to aks, who are those people that INS is trying to protect?
Irony (Score:4, Insightful)
Let's leave. (Score:4, Insightful)
I'm as patriotic as the next guy, but if all the U.S. companies are content with the economic sabotage currently going on, I'll move to India.
This is all backwards. You want raw materials in >> refined products out, to keep wealth in the country. Not the other way around.
the US is driving people away (Score:5, Insightful)
But is the US still such an attractive destination for high tech workers? They face an insane immigration system, the requirement to give up prior citizenships, xenophobia, hate crimes, etc. Add to that enormous housing costs, high crime rates, a failing health care system, failing retirement system, failing school system, and skyrocketing higher education costs.
It's not surprising if US high-tech jobs are moving overseas. Perhaps companies like it because they can save some money, but it's almost certainly driven to a large extent by what high-tech workers themselves want.
Sound like 19th centrury UK/US? It is! (Score:3, Informative)
See
And no, I'm not baiting or making fun. I'm in Canada, and we're probably going down on the same ship
Painful but positive (Score:5, Insightful)
Because Japan (and now Korea, etc.) started making cars many US employees were initially displaced. But we now enjoy cars (from all countries including the US) which are far better and lower priced than we would have had without competition. (My 18 year old Tercel just crossed 200,000 miles but when I was a kid they didn't even bother with the sixth digit on the odometer.)
We have also enjoyed all sorts of inexpensive goodies like toys, home electronics and clothing that would have cost far more if all made here.
So the Indian programmer makes "only" $10,000 - that's still 20 times the average. His standard of living is probably pretty good. Outsourcing hurts our income but helps keep our costs down.
But there are bigger gains:
Peace - countries with close business ties almost never go to war.
Population - the wealthier a country gets, in general, the lower its birthrate.
Environment - of course the "first world" has a far from perfect environmental record but it is WAY ahead of the third world where fishing by pouring poison or tossing dynamite in the ocean is an accepted method, where "recycling" involves open fires to burn the plastics off of wire and electronics, and where the air is many times worse than in the worst US city. Something about not having to worry about the next meal allows one to consider the environment more seriously.
a podiatrist's opinion on the linux kernel... (Score:5, Insightful)
The opinion surely come down as: either this is one bunch of smart podiatrists or, this is one bunch of cocky podiatrists who have no idea what they are talking about.
International trade is a difficult subject. Often situations that seem bad for one country are actually beneficial, as first pointed by the great economist David Ricardo two hundred years ago. This holds across the entire field of economics, starting from the fact that trade is a win/win scenario, while most people think its a win/lose scenario.
If you are concerned about the impact of jobs moving abroad, I suggest you read up on economics, so you come to understand, for example, why not all jobs when to Mexico after NAFTA got signed, as Ross Perot predicted.
Here are a few useful links:
http://www.systemics.com/docs/ricardo/david.htm
David Friedman. Hidden Order: The Economics of Everyday Life, Harper-Collins, 1996.
http://www.daviddfriedman.com/Academic/Hid
The market at work, or, "duh" (Score:5, Insightful)
Anyone with even the most basic understanding of economics should dismiss this article as totally unsurprising and move on. The idea I'm already reading in comments that "jobs should stay in America" is idiotic. I want stuff to cost less, and if producing it elsewhere can do that then that's what globalization is all about! It's the same argument when it comes to trying to get rid of ridiculous farm subsidies. I don't want to pay more for corn just so people can continue to be farmers. Familiar Slashdot argument: if the business model of __________ (like being a programmer or a farmer) is untenable, then get out of it! The Constitution doesn't recognize a right to make money doing the activity of your choice.
Maybe someday, when smart use of technology has finally allowed us a balance between needs/wants and resource scarcity, large numbers of people will be able to say, "I feel like being a farmer" or "I feel like managing servers" and do it. But for now, that's just not how it works. Suck it up!
And by the way, this argument goes both ways. People living in the US just happened to have been born (or have been lucky enough to move to) one of the most resource-rich nations on the planet. How dare we even consider enacting policies that would deny these benefits to the rest of humanity? It's that kind of thinking -- or, at least, the perception by other that that's what we're thinking -- that has all these misguided, ignorant, and extremely poor Muslims trying to blow up our civilization
What d'ya expect? (Score:4, Insightful)
How many people here drive Japanese cars?
A lot of people here are saying the same things auto workers said in the 80's. They're taking our jobs. Its going to destroy the economy.
You know what's going to happen? Cheaper programmers -> lower costs -> more profit -> corporations expand -> more jobs for both Indians and Americans.
In the short term it kinda sucks, but in the long run things will be better for everyone. Of course in the long run we're all dead anyway (sorry Mr. Keynes).
This assumes that corporations aren't corupt colluding bastards, but that really is a separate issue and would be a problem with or without free trade.
I don't understand the logic (Score:3, Informative)
Another sector that was established here was clothing and textiles. In the early 90's Fruit of the Loom set up several factories here, at considerable cost albeit offset by some government grants. So did Lee Aparell and a few other big names. Fruit of the Loom opened two plants near me and 3 over the Irish border a few miles away in Buncrana, Donegal. This was in the early 90s, only one plant is left and that is at risk of closing. Most of the plants that closed didn't last 5 years. The reason? management got uppity at staff joining unions and wanting better conditions and they were afraid of the upcomming minimum wage. So they shipped all the work off to Morocco, where the costs were 25% of the costs here. Even taking in to account the costs incurred building new factories here only a few years earlier it was still cheaper to move to Morocco.
This is where the weird logic kicks in, what happens when the Morrocan workers decide they want better pay, which will inevitably happen? Pretty much the same thing which happened here, management will not like the unions causing trouble and they will move somewhere else.
When will big business learn wages are not the only thing to think about when trying to make more money. A happy workforce with job security is a productive workforce, a productive workforce cuts manufacturing costs, lower manufacturing costs means more profits. Well at least I think thats how it works.
Optimists vs. Pessimists (Score:3, Interesting)
The main problem in the world right now is unequality from place to place. Consider thermodynamics...where does the heat go? In chemistry, where does the higher concentration go? I know it sucks right now, but we really have to hope for the long term (as long as Gulf War II doesn't screw everything up). Once the Earth reaches equilibrium, then all we'll have to worry about is the cheap jobs going to Khronos or something (the real optimists hold out for universe-wide equilibrium).
Another (?) point of view (Score:3, Insightful)
And buying work from outside because is cheaper enables US companies to do more work/goods, or even exists, things that in fact are good for US citizens.
Frankly, sound a bit like hypocrisy to cry when someone from USA hires someone or buy something from outside but is ok or better it if someones from outside do the same from USA.
How Americans Can Buy American (Score:4, Informative)
We won't be screwed forever. (Score:3, Insightful)
But the general public doesn't give a damn (Score:3, Insightful)
Think about it: When the manufacturing jobs were being sent offshore in the 80's and 90's did you (as an engineer) really care? Some of us were a bit concerned, but not enough to even motivate us to write our congresscritter. Now that our engineering jobs are being outsourced we're getting upset, but who's going to come to our rescue? Nobody, the general public doesn't have a clue (and of course, it can be argued that nobody _can_ come to our rescue).
[as a footnote, it's interesting to note that a lot of those displaced manufacuring workers in the 80's and 90's were encouraged to retrain as software engineers - I've worked with a few of them.]
Bad for us, good for U.S. (Score:4, Insightful)
If you remember your Snow Crash, this is the sort of thing Neal Stephenson was talking about:
Is the use of inexpensive intellectual labor abroad a bad thing? Depends on who you talk to: to a telecom engineer in Dallas who's trying to make payments on a $500,000 house, it is. To someone who can buy cheaper software or services because developer rates went from $150,000/year to $5,000/year, it may not be. And to the population of India, of course, it's a different story entirely.Really, this is the way the game has to be played for the developing world to proceed. After all, the manufacturing and commodity export sectors in the developing world are so competitive across nations that they can't serve as engines for fast growth. The most effective way to move from sweatshop to smartshop is to change the competitive balance and make the developed world compete for their own jobs: the same market forces that give us cheap steel, fossil fuel, and agricultural imports cane be turned back on the markets in which we've previously held both absolute and comparative advantages. Eventually -- and the key here is "eventually" -- this will result in increased prosperity for all, but it's not at all clear that the short-run result will be increased prosperity for us.
This isn't to say that I'm happy about this in terms of my own career (though it is why I'm moving from tech to law), but if the alternative is an ever-larger, increasingly impoverished, and restless population in the developing world -- just the sort of populations attracted to radical terrorist movements -- I'll take the salary hit.
I am American, and I'm not worried. (Score:5, Informative)
Wealth begets wealth.
Yes, there's quite the imbalance between my salary and a Fortune 500 CEO's, and that's not changing much. What is changing is that people in other countries are ending up with more money to spend individually, and end up with their marketplace infrastructures being upgraded. India has Internet connections. FedEx delivers in India. The same countries getting the jobs are also becoming consumers and export markets. There is temporary pain like this for us, but there will eventually be ROI. It just sucks when you're the individual out of a job.
And what happens to us Americans if and when the US faces disaster? I'm not loyal to the US so much as I am loyal to a country that provides:
If the US crumbles in this endeavor (which I doubt), it will do so while a few other countries outdo the US in the areas listed... some would argue that there are other countries that already far exceed it in the areas that matter to them.
You too can play the globalism game.
Welcome to the club... (Score:5, Interesting)
Frankly, I have been expecting this for about a year or two: if you can/could telecommute, what prevented your employer to outsource your job?
The developed countries have been outsourcing blue-collar jobs to developing (really low-wage) countries, thanks to the development of international transportation for moving the goods all over the world. Those jobs go now wherever the workforce is the cheapest
Every single part of computer hardware you have in front of you, has been made in Anywhere But US/Europe/Japan(TM). I hope you enjoyed playing/working with your computer, because karma is a b*tch.
Today, the internet allows the transportation of knowledge, voice and data all around the world. Of course, your job will go elsewhere.
Heck, if you think about it, you can see that no one is really safe from this:
- lawyers (you just need some meat in the court house, everything else, including C&D
:), is outsourcable paperwork)
- doctors (the remote chirurgy we dreamed about with Internet2)
- teachers (online schooling anyone?)
- people in the movie/entertainment industry: Bollywood [rediff.com] could cripple Hollywood (Selling low-priced non-crippled CD and non-DRM DVD should be straigthforward for the Indian majors)
Here is some food for thought:My predictions are:
So, what does it mean for me?
Serves those gold diggers right (Score:3, Insightful)
IT opportunists knew what the risks were going in. The US tech industry, by all accounts, shouldn't have taken you nearly as far as it did, so be thankful and start looking someone else who might be willing to lease your soul for $$$.
This is a payback for currency system abuse (Score:5, Informative)
What followed was a horrible abuse of this "de-facto international currency" status, the (number of dollars abroad)/(amount of products traded abroad for dollars) was significantly lower than the (number of dollars in US)/(amount of products traded in US). In other words, everything was cheaper abroad and expensive in US, so US simply printed dollars (or, to be more precise, created them as Federal Reserve loans) and injected them in this system. The system worked through osmosis, it became easier to buy products abroad, sell them in US, pocket the profit and call yourself a rich company while producing nothing, and merely exploiting the slowness of trickling of dollars abroad by making it a bit faster.
Of course, due to this difference in prices, and efficiency of non-export parts of foreign countries' economies, US citizens could hear blood-curdling stories about low salaries abroad, when they were counted against US dollars, however it was nothing but a propaganda trick -- the prices difference was not taken into account, and the lack of reliable currency conversion rates for countries and products not involved in trade with US allowed for absolutely ridiculous numbers. Just look at GNP figures and think, how is it possible to have such a disparity, yet people don't starve everywhere abroad. So for US citizen there was no visible difference between indeed starving people in Cambodia and rather prosperous people of India.
However everything comes to an end. "Osmosis economy" can't run forever, and just buying stuff while racking up trade deficit becomes more dangerous, and other currencies (mostly Euro) issued beyond the US control are becoming used in international trade. However US companies can't expand the production within the country -- educational system and media prepared only consumers for them, there aren't enough people that can and are willing to produce something, they would rather accept sliding quality of life for themselves. So US proclaims itself to have "service economy" (aka doing each other's laundry) and "high technology" (aka having a lot of engineers). The problem is, "service economy" is big fat zero unless it supports production of something, and engineers in US meet just as much competition from foreign engineers as US workers did before, therefore all the outsourcing you can see.
So US as a whole became an arrogant, unskilled and incapable of supporting itself nation by abusing currency machinations -- something that often happened to individuals and now happened to the country as a whole. And here is the sucky part -- crook that lost his money does not harm millions of people that ARE capable of productive work yet happened to live in a country where the macroeconomic processes deny them this work.
If US wants to restore its currency system to something usable, sooner or later it must significantly devalue dollar, and possibly tie it to valuable commodities (say, gold) and stop the "osmosis" forever. If US wants to restore its production capability it must rebuild its educational system. And if US wants to get people capable of doing productive work now and not in 20 years, it must reduce barriers to immigration. All of those measures will without any doubt decrease "quality of life" -- at leasr temporarily, and at least for some parts of the population. However the only alternative to them is accelerating slide into poverty, and turning the country's economy into an equivalent of giant failed dotcom, like flooz.com x 1e6.
Mr. Bush, Chairman Mao Called (Score:5, Interesting)
Chairmain Mao will explain that Chinese Corporations are the subcontactors to the subcontractors to the subcontractors of the Department of Defense Subcontractors and furthermore; China now makes ALL the key components for ALL of America's military weapons and machines.
Then he will let out an evil sounding Chineese Laugh! (The kind you hear in James Bond movies.)
How can the US maintain it's power if all it's strategic manufacturing capability is located offshore? Recently, we nearly lost the US Steel Industry and it's not over yet.
Sure we have rules and laws which on paper prevent this sort of problem, however as the FDA recently found out in the "Tainted Strawberry Harvest" [fda.gov], these rules are not always followed. In this specific case the FDA had rules that all food used in school lunch programs must be grown in the United States. The subcontractors decided to ignore the rule and subcontract from Mexico and imported 1.7 million pounds of Hepatitis laced frozen Strawberries. The good news is that the fraudulent company was the lowest bidder and we saved tax dollars.
I won't even comment on the strategic technology which has been leaked [thenewamerican.com] to other countries by defense subcontractors.
Greed will destroy us!
Economy not static (Score:3, Insightful)
In India they have a comic strip called Asok... (Score:3, Funny)
There is??? (Score:3, Funny)
Re:There is a world outside of the United States (Score:4, Interesting)
First, "outsourcing to Asia" is not a long-term problem. It is a short term "fad" during a tough economy. Outsourcing parts of a project to Asia are destined to failure unless the project is completely self-contained and very well spec'd. Every "outsourcing to India" project that I've had the misfortune to hear about from colleagues have been massive failure. There was communications problems due to their day being our night. There was budget problems, where they kept promising a delivery date and budget and when that day came or when the money was spent they'd ask for more time and money. Products delivered were not what the American company had in mind. In one case, I know of a Mexican company that outsourced to India! The Indians didn't speak Spanish, the Mexicans didn't speak Indian (or whatever they speak there), so they communicated in English. Or tried. Imagine the difficulty trying to convey Mexican tax laws to an Indian on the otherside of the world in a language that isn't native to either end.
Suffice it to say, Asian OUTSOURCING is a bubble, too. It'll be the "in thing to do" until enough people know first or second-hand of the problems involved, or until the economy picks up.
Even if they get their quality/communications problems resolved, remember that as their work gets better and/or the practice becomes more popular, the price of outsourcing to India will rise. But at some point, the higher price in India will reduce the incentive to outsource to them in the first place--and that point is still much below American wages. Many companies don't even bother outsourcing to Mexico anymore because their wages are now 1/4th to 1/3rd that of American wages [tallking about educated IT professionals, not people who build wickets just south of the border]--and Mexico is right across the river from the U.S.!
That said, I believe in 100% free trade and I'm completely in favor of any company working wherever it can find the best deal. There will be winners and losers in every country but I'm not concerned about that. Anyone that is willing to work to make themselves useful will have no problem finding and keeping a job.
Re:This makes sense (Score:5, Insightful)
Maybe you'll then say that it's not the goverment but the wealthy fueling your conspiracy. Well, considering that of that 1% you're talking about, only 10% of their children will manage to do anything but piss that wealth away, I don't see a successful continuation there either. And what you're talking about implies generations of development.
Money flows downhill. It goes where things are cheap, and moves them where they are expensive. You'll never track it by looking for master manipulators, you'll find it by looking for people blatantly trying to make a buck.
Oh, what's that in your url? Subgenius? Aha, I see. Nevermind, you're a lost cause
Class Warfare! (Score:5, Insightful)
Mod me troll if you wish, but the highest tax bracket before Reagan took office was almost 80%. That means the government taxed 80% of the income of the very richest people. Now it's down around 30%.
There are more rich and very rich people in the U.S. than in any time before in history, and they hold a much larger share of the wealth pie than the wealthiest few ever held before. NAFTA benefits the rich, and not the poor. The tax codes benefit the rich and not the poor. WIPO, Sales Taxes, "death" tax reductions -- it's all meant to guarantee that once the money is in the hands of the wealthy, it never leaves.
That giant sucking sound isn't the sound of jobs going overseas, it's the sound of money flyng out of your wallet.
Re:silly question (Score:3, Insightful)
No it won't. It'll give the CEO a fat raise. Prices come down? You jest. And by the way, it used to be a man could hold a decent job and raise a family. Now the wife has to work too. What do you suppose happens when both parents need to work two jobs to prevent creditors from taking everything, because strangely enough that McJob doesn't pay half as much as that good engineering job he paid a shitload of money to train for? How does XYZ sell more widgets to these people?