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Intel Chief: Don't Call Us Benedict Arnold CEOs

CowboyNeal posted more than 10 years ago | from the highwayman-ceos-no-good-either dept.

Intel 1033

theodp writes "In a USA Today interview, Intel CEO Craig Barrett pooh-poohs arguments against outsourcing, explaining 'We do not send our basketball teams to compete against the rest of the world, saying the other teams have to play slower because our folks aren't fit enough to run as fast.' He is also fed up with being called a Benedict Arnold CEO (perhaps he'd prefer Unemployed Computer Scientist). Barrett pegs K-12 math and science education as the biggest threat to U.S. employment, but when pressed about U.S. kids who do well in both, attend excellent universities, but have no guarantees of good jobs when they graduate, Barrett remarks 'I don't have a solution to that one.'"

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1st PSOT! (-1, Offtopic)

Anonymous Coward | more than 10 years ago | (#9027806)


Re:1st PSOT! (-1, Offtopic)

adriantam (566025) | more than 10 years ago | (#9027811)

2nd POST....not PSOT

It's just business (cattle prods and the IMF) (2, Interesting)

aghorne (583388) | more than 10 years ago | (#9027870)

This guys in charge of a really big company. Now last time I checked he is only responsibility is to people that own stock in Intel. Now last time I checked those stock holders wanted the people running the company to widen the discrepancy between costs and profit as far as possible. So, cost go down (Craig Barrett decides to outsource stuff) and sales go up (crazy market share) then the only people that matter are happy. Don't waste your time looking at a company to create anything else but possible outcome for itself. Companies are totalitarian organizations by virtue.

Hmmm (4, Funny)

Anonymous Coward | more than 10 years ago | (#9027812)

I'm reading this as I train my China replacements...

Re:Hmmm (-1, Troll)

Anonymous Coward | more than 10 years ago | (#9027829)

Me verry sorry, but you read srashdot all day.

Re:Hmmm (4, Funny)

BlightThePower (663950) | more than 10 years ago | (#9027955)

When no-one is looking, knock them off the table and onto the floor. They are certain to smash.

Shoes (1)

Lord Apathy (584315) | more than 10 years ago | (#9027815)

Saying goes, "If the shoe fits"

I have but one thing to state, gentlemen: (5, Funny)

Anonymous Coward | more than 10 years ago | (#9028005)

Dey tuk er jebs!

I would never outsource if I was a CEO (-1, Flamebait)

Anonymous Coward | more than 10 years ago | (#9027820)

Not because it's bad for the economy, I just hate Indians.

And for those who don't know (5, Informative)

krets (645685) | more than 10 years ago | (#9027821)

What's it trying to say?

Benedict Arnold [ushistory.org]

I still don't get it.

Re:And for those who don't know (0)

Anonymous Coward | more than 10 years ago | (#9027846)

Benedict Arnold = Traitor

Re:And for those who don't know (5, Informative)

Anonymous Coward | more than 10 years ago | (#9027853)

Benedict Arnold was a traitor - he betrayed his country and his people for money.

These CEOs are traitors - they are betrying their country and their people for money.

Understand now?

Re:And for those who don't know (2, Informative)

NemosomeN (670035) | more than 10 years ago | (#9027854)

By May of 1779, Arnold had begun bargaining with the British. Why would a man commit treason against his country, especially one who had fought so valiantly? We can only speculate. He was certainly angry and hurt over the many slights he received over the years. He probably felt unappreciated by his country and those he fought with, even sacrificing his own leg for the cause. His pride was most likely the biggest piece of his life that was damaged -- humiliation was always an affront Arnold could never take. Money, of course, played a big part. He was offered in excess of 10,000 pounds and a commission in the British military.

Re:And for those who don't know (1)

Rosco P. Coltrane (209368) | more than 10 years ago | (#9027943)

Okay, if they don't want to be called Benedict Arnold CEOs, that's fine. I suggest Klaus Fuchs [umkc.edu] CEO instead then...

"good for the economy" my ass. (4, Insightful)

grub (11606) | more than 10 years ago | (#9027832)

When CEOs say "good for the economy" they don't mean "good for the average Joe" they mean "good for our shareholders"

It's easy for these CEOs to sit in their ivory towers and tell the people that various things are good for the economy, they aren't the ones facing unemployment or living cheque to cheque. What matters to these people is making the shareholders happy, the workers are expendable cogs in their money-machine.

Imagine, for just a moment, that Craig Barrett were to say "Intel investors, I have a great plan. We'll stop outsourcing and start hiring domestically. Yeah, it'll cost more money and there will be a profit hit for a while but it will keep our people working and spending their paycheques domestically." Something like that is truly good for the economy as a whole, but how long would be be CEO for? The security guards would be showing him to the door in minutes.

"good for the economy" my ass.-outsourcing CEO's. (5, Insightful)

Anonymous Coward | more than 10 years ago | (#9027859)

" It's easy for these CEOs to sit in their ivory towers and tell the people that various things are good for the economy, they aren't the ones facing unemployment or living cheque to cheque. What matters to these people is making the shareholders happy, the workers are expendable cogs in their money-machine."

Your aim is slightly off. here let me correct. "It's all about the new BMW I'm going to buy with my golden parachute". If it was JUST about the shareholders, then CEO's would be outsourcing their jobs.

Re:"good for the economy" my ass.-outsourcing CEO' (5, Insightful)

grub (11606) | more than 10 years ago | (#9027872)

Your aim is slightly off. here let me correct. "It's all about the new BMW I'm going to buy with my golden parachute"

heheheh, well done. I have no problem with people getting rich if they've earned in a way that's equitable to all but getting multi-million dollar bonuses for taking away peoples' livelyhoods? That's just disgusting blood money.

Re:"good for the economy" my ass. (1, Insightful)

Anonymous Coward | more than 10 years ago | (#9027888)

Something like that is truly good for the economy as a whole

Until a processor fabricator opens up in China and sells us chips that are 90% as good as Intel's best at 10% of the price.

Then, because Intel chose to handicap their competitiveness by refusing to oursource, they're out of business entirely.

Intel is already a highly-globalized company, and so is AMD. If they weren't, the machine you're using right now would run half as fast and cost twice as much. Now, are you going to tell me that's somehow "good for the economy?"

Re:"good for the economy" my ass. (-1, Flamebait)

Anonymous Coward | more than 10 years ago | (#9027895)

republican cunt, go suck bush's cock some more.

Re:"good for the economy" my ass. (0)

Anonymous Coward | more than 10 years ago | (#9027901)

Your revolution is over, sir. The bums LOST. Do you hear me? The bums LOST !

Re:"good for the economy" my ass. (5, Insightful)

Ingolfke (515826) | more than 10 years ago | (#9027951)

Yes they would show him to the door, because his job is to make money for the shareholders.

If your bank sent you a letter and told you that they had decided that a new policy would be to reduce 20% of your savings annually in order to increase the wages of their local branch tellers so they could match cost of living increases and ensure employee comfort would you (or the average joe) keep banking there? Nope... so why would any shareholders keep money in Intel if they can make more money elsewhere... answer... they won't.

Furthermore... despite all the hoopla about buying domestic... most people don't check every single thing they buy for where it was made. They buy whatever offers the best value, so if AMD outsourced their work to a place that had cheaper labor and thereby reduced the cost of operations and thereby reduced the price per chip... then Intel would in a tough spot, would most likely lose sales, and would eventually be in a weaker competitive position, which would reduce their shareholder value.

Now since both companies are in the U.S. one might argue that you have to legislate that these companies keep jobs here. This is a Benedict Arnold policy, pandering to the fears and pains of today's masses while selling out the future. Yes would protect some higher paying domestic jobs today if we keep companies from outsourcing, but this would be giving away competive advantages to foreign companies who WOULD take advantage of lower costs of skilled labor in other countries. So in 10 years, you could have an Indian/Chinese/ that could enter our market, drastically undercut our prices, and still make good/better profits. Our companies would fold, investments dollars would flow out of the U.S. and future generations would have a much more difficult time finding quality work.

Re:"good for the economy" my ass. (-1)

Anonymous Coward | more than 10 years ago | (#9028035)

"Yes they would show him to the door, because his job is to make money for the shareholders."

Thereby proving that American Capitalism is as morally bankrupt as Soviet Communism. I wonder how many millions of people are now dead having been condemned to starvation or worse, by being thrown out of work so that the shareholders can have that little bit more.

What a charming country you live in.

Re:"good for the economy" my ass. (4, Insightful)

swillden (191260) | more than 10 years ago | (#9028010)

When CEOs say "good for the economy" they don't mean "good for the average Joe" they mean "good for our shareholders"

Most "average Joes" are shareholders. Many have personal investement accounts, some have pension plans, and most everyone with a semi-decent job has a 401K, or equivalent.

It's a bit more complex than you make it out to be.

Re:"good for the economy" my ass. (0)

Anonymous Coward | more than 10 years ago | (#9028020)

when you have to drain your 401K and savings because your job is outsourced come back and tell us about it.

A truly global economy (3, Insightful)

NineNine (235196) | more than 10 years ago | (#9027836)

Unfortunately for the fat & happy Americans (I'm one of them), we're entering an age of a truly global economy, where there are very few barriers as far as communication and travel. There's a huge standard of living between first world and thrid world countries. Basic economics (hell, and nature) say that what's going to happen is that there's going to have to be an equilibrium that say, the US and India will reach, eventually in terms of standard of living pay rates, etc. At least for the next generation or so, the US is going to see a dramatic drop in standard of living, while other parts of the world increase (we're seeing that already in SE Asia). There's no way around it. The Net and telephones and cheap air travel have done this, and there's really no way to stop it. The genie is out of the bottle. CEO's do what they always do: maximize the bottom line. workers do what they always do: work for as much money as is possible. It's really inevitable, and it's time the IT industry sucks it up and realizes this. It's already happened with other US industries (autos, steel, textiles), and will continue for the forseeable future.

Time to tighten up those belts boys! The days of a big house in the suburbs with a giant SUV are pretty much over. If you expect to be able to continue living as well as you have been previously, you're kidding yourself.

Re:A truly global economy (4, Insightful)

maelstrom (638) | more than 10 years ago | (#9027897)

Free trade doesn't have to be a zero-sum game.

Re:A truly global economy (1)

NineNine (235196) | more than 10 years ago | (#9027928)

Free trade doesn't have to be a zero-sum game.

And I'm not saying that it is. More than likely, the entire planet's standard of living will be much higer in say, 100 years. It's improving in most of the world as we speak. The US and other western countries are just so far out of whack, that there's going to be a major adjustment in the Us in the short term before things equalize. But I agree. Cutting costs is almost always beneficial to everybody, eventually. It's just hard for unemployed Americans (again, I was one, and I understand the frustration) to see in the short term.

Re:A truly global economy (2, Interesting)

maelstrom (638) | more than 10 years ago | (#9027968)

Agreed, I think it is incredibly short-sighted to be outsourcing higher-level IT work. In some cases, companies are training the foreign workers, giving them their design documents and then having them implement the product. In 5 or 10 years these workers you trained not only have all your IP, they live outside US jurisdiction and they will be ready to compete with you directly, perhaps even using the code you paid for!

Look at medieval Europe for a rebutal. (3, Insightful)

khasim (1285) | more than 10 years ago | (#9027973)

Two basic classes, the very powerful and the serfs.

Now, look at the US economy. The rich get richer and the poor get poorer while the middle-class shrinks.

You have an overly optimistic view of the future.

Rather than hoping that everyone will, somehow, achieve a more equal economic level, why don't we start working now to preserve and strengthen the middle-class?

Re:Look at medieval Europe for a rebutal. (1)

NineNine (235196) | more than 10 years ago | (#9028015)

Rather than hoping that everyone will, somehow, achieve a more equal economic level, why don't we start working now to preserve and strengthen the middle-class?

Because you're talkign about government intervention, and any time the government intervenes, it's a completel and abject failure. Look at the agriculture industry. We have the US gov't trying to "save farms". We have some of the most productive agricultural practices in the world, and the gov't is paying farmers to let fields go fallow, they're paying them NOT to produce, and they're artificially jacking up the proces of grain and milk. Ever wonder why that box of Corn Flakes costs $4? The gov't. Without gov't subsidies, you'd be able to buy bread for $0.50 a loaf, cereal for $1/box, and milk for $1/carton. That's just ONE example. This rich vs, poor thing has never proven to actually happen throughout history. History (and nature) both show an equilibrium happening. The US may have less of a middle class, but that doesn't mean it's going away. The middle class now lives in New Delhi.

Re:Look at medieval Europe for a rebutal. (2, Informative)

DAldredge (2353) | more than 10 years ago | (#9028032)

A fucking box of corn flakes doesn't have to cost 4 USD. The store brand of damn near the exact same product costs 1.39 USD. I know, I just bought some two days ago.

Re:A truly global economy (1)

Anonymous Coward | more than 10 years ago | (#9027937)

Time to tighten up those belts boys! The days of a big house in the suburbs with a giant SUV are pretty much over. If you expect to be able to continue living as well as you have been previously, you're kidding yourself.

I'm a recent college graduate with no job prospects because I simply CANNOT LIVE at the rates the Indian programmers are paid. I am not unemployed because I'm holding out for a better job. I'm unemployed because there ARE NO JOBS for domestic US programmers. I couldn't care less how the standard of living is in other countries, the bottom line is, I and many other very bright programmers in the US have no jobs. Stick that in your simple economic pipe and smoke it.

Re:A truly global economy (2, Insightful)

NineNine (235196) | more than 10 years ago | (#9027964)

And I'm sure that people with degrees in buggy whips are having a hard time finding a job, too. Just because you have a degree doesn't mean that you're entitled to a job. Face it. You made a bad decision. Your options now are to move to India (where you can live well as a programmer), or find a new profession. Adapt or die. Nobody said life was fair, kiddo. That's something they don't teach you in college.

Re:A truly global economy (0)

Anonymous Coward | more than 10 years ago | (#9028003)

Gee, I imagine it's real easy to say something like "simply move to India" or "you made a bad decision" when you're not down in the trenches. When I went into college IT was booming, and computers was a very wise choice. Now due to circumstances beyond my control (9/11, outsourcing) I have no prospects.

Re:A truly global economy (2, Insightful)

the_2nd_coming (444906) | more than 10 years ago | (#9028031)

well, if india would accept workers from other countries, that would be an option. the fact is that these outsourcing countries where jobs are going are not allowing foreign workers to work there. how is that free trade?

A truly global economy-A SUV in every driveway. (1, Insightful)

Anonymous Coward | more than 10 years ago | (#9027947)

"Time to tighten up those belts boys! The days of a big house in the suburbs with a giant SUV are pretty much over. If you expect to be able to continue living as well as you have been previously, you're kidding yourself."

You might want to look at bit harder.

The number of SUV's is lesser than all the other vehicles combined.

The number of "big houses in the suburbs" is lesser than the total kinds of houses out there.

Yeah we have a good standard of living, but it's not as good as you'd like it protrayed.

"There's a huge standard of living between first world and thrid world countries. "

Yes, but are people happy? Numerical superiority isn't happy.

"Basic economics (hell, and nature) say that what's going to happen is that there's going to have to be an equilibrium that say, the US and India will reach, eventually in terms of standard of living pay rates, etc."

Look up "entropy". Economics and life in general are active systems, not "water seeking" systems.

"At least for the next generation or so, the US is going to see a dramatic drop in standard of living, while other parts of the world increase (we're seeing that already in SE Asia)."

Were also seeing all the other problems that come with affluence as well.

"CEO's do what they always do: maximize the bottom line. workers do what they always do: work for as much money as is possible. It's really inevitable, and it's time the IT industry sucks it up and realizes this."

Gee, I didn't know, we didn't realize that we should be working for as much money as possible? Who knew?

"It's already happened with other US industries (autos, steel, textiles), and will continue for the forseeable future."

Yeah! That makes it OK. The "it's inevitable", just go with the flow. Pay no attention to that sucking sound. Defeatist crap.

Re:A truly global economy-A SUV in every driveway. (1)

NineNine (235196) | more than 10 years ago | (#9027990)

Defeatist crap.

No, a defeatist has your mentality: Whine, whine, whine, protect my job because I can't compete, whine, whine. The answer is to adapt.

And as far as the standard of living goes, I dont' know of a single other country on the planet that has as much cheap food choices as we do and gasoline as cheap as we do. Hell, minimum-wage employees still have cable TV and cars. Try doing your "poor me" schtick in central Africa, where people live in dirt huts, or much of South America, or SE Asia.

Re:A truly global economy (5, Insightful)

the_2nd_coming (444906) | more than 10 years ago | (#9028012)

um, no, a true global economy would mean that workers can move to where the jobs are and that there is a world wide rate of pay that differs little from one location to the next.

what we have is CEOs taking advantage of underpaid high tech workers in countries that have no labor laws.

Money fever. (5, Insightful)

Anonymous Coward | more than 10 years ago | (#9027838)

"Barrett pegs K-12 math and science education as the biggest threat to U.S. employment, but when pressed about U.S. kids who do well in both, attend excellent universities, but have no guarantees of good jobs when they graduate, Barrett remarks 'I don't have a solution to that one.'""

How about being honest with us, and admitting it isn't about education, but all about the money?

Re:Money fever. (3, Insightful)

pe1rxq (141710) | more than 10 years ago | (#9027953)

I find it funny that after all that time all the capitalist fanboys are just now learning that in their system there is no guarantee that money is flowing their way....

Both communism and capitalism predict that ultimatly there will be some balance in which everyboddy has equal chance and oportunity.
The problem is that everybody has to play by the rules and there is no place for protectionism.

Our technological advances are slowly taking down the natural protecting boundries... Ever since that started we tried to build new ones by law (taxes on money going the wrong way) but the balance is already tipping due to our own greed.

The only question remaining is will we keep oscilating around this ideal forever or will things stable out after a while and reach a point of stability where everyboddy is happy?


Yeah... (5, Insightful)

cybermace5 (446439) | more than 10 years ago | (#9027840)

That whole interview really did collapse at the end. He spouts off about having to compete, and discusses at length how kids need to be taught math and science, and how many teachers aren't educated in the subjects that they teach. But then he has to admit that even if the kids were taught to excel, it wouldn't change anything.

We are not competing on basis of skill here, we're competing on the basic cost of living. Today's CEO's are pocketing the savings from outsourcing, and will be retired when the house of cards crashes down because no one here has any more money to spend.

Re:Yeah... (1)

NineNine (235196) | more than 10 years ago | (#9027902)

when the house of cards crashes down because no one here has any more money to spend.

You miss the other side of the coin. People in traditionally poor countries are becoming wealthier by the minute, and thus are also becoming customers. There's no house of cards. There's simply a shift in economies from a US based, protectionist economy, to a world economy.

No they are not. (4, Interesting)

khasim (1285) | more than 10 years ago | (#9027998)

They are paid 1/10th of what a worker here is paid so they can only buy 1/10th of the finished goods produced here.

What you're seeing is a small transfer of capital from the US to other countries which raises the standard of living of a few people in those countries -and- the conglomoration of wealth in the hands of a few in the US.

Re:Yeah... (4, Interesting)

cybermace5 (446439) | more than 10 years ago | (#9027999)

How does that help them? The U.S. is only 300 million people, and the world is six billion. So a poor, undeveloped country is going to improve by a few people receiving American money, while the actual work they've done has little value in their own country and is sent back to America? They are skipping the industrial development phase and going right to the knowledge worker phase, which means the infrastructure to support their way of life is located in America and not in their own country. This means that their economy can be kept artificially where it is, maintaining the supply of cheap labor.

These countries need self-supporting industries, roads, hospitals, and the high-efficiency agriculture lifestyles that allowed us to become knowledge workers in the first place. By luring developing countries to skip directly to the desk jobs, we are sabotaging the development of a strong industrial foundation that can make these countries economically independent.

Re:Yeah... (1)

Fzz (153115) | more than 10 years ago | (#9027906)

We are not competing on basis of skill here, we're competing on the basic cost of living.

In a free market, this means one of three things:

  • Make the cost of living in the US cheaper.
  • Make the cost of employment elsewhere more expensive.
  • Have higher productivity in the US than elsewhere, to offset the differences.
The second will happen extremely slowly, as the standard of living elsewhere increases. The third is really hard, but if you don't succeed, then the first will happen. The first means a large balance of payments deficit that drives down the value of the dollar, and also very high unemployment. Hmm, where have I seen that recently...

Education is really the only option.

Re:Yeah... (1)

SkunkPussy (85271) | more than 10 years ago | (#9028029)

In a free market, this means one of three things:

* Make the cost of living in the US cheaper.
* Make the cost of employment elsewhere more expensive.
* Have higher productivity in the US than elsewhere, to offset the differences.

wrt 1, if there is rising unemployment in the US, then naturally prices will drop because there will be less money to go around all the retailers. so the cost of living will decrease somewhat, so the employed will find that smaller wages will keep them in the same standard of living.

Re:Yeah... (0)

Anonymous Coward | more than 10 years ago | (#9027931)

Are all of these CEOs forgetting about Henry Ford?

He paid his workers more than the going wage because he wanted them to buy Fords.

If US corporations outsource everyone then how is anyone here going to buy their products?

When President Bush says outsourcing is good for US consumers because prices go down, he neglects to mention that no matter how low prices go YOU CAN'T BUY STUFF IF YOU DON'T HAVE A JOB THAT GIVES YOU MONEY TO PAY FOR IT!

Re:Yeah... (1)

arivanov (12034) | more than 10 years ago | (#9027934)

even if the kids were taught to excel, it wouldn't change anything

Sad but true. Even if they will be tought to excell as long as they are tought within the existing US system they will be year to two years behind someone tought to excell in science in Russia, France, most of Eastern Europe or India for that matter. At least as far as primary, secondary, high school and university education prior to MSc level are concerned.

I have seen math tought in a three upper league unis - one in US, one in Russia and one in Eastern Europe. It was exactly as described. Russian was mad, Eastern Europe was crazy but still surmountable by a normal human, US was outright lame.

Re:Yeah... (4, Insightful)

Wavicle (181176) | more than 10 years ago | (#9027997)

Yes. Craig Barret, like Carly Fiorina, has found a PR whipping boy. The public knows that Math & Science K-12 education is very poor. It's really just a red herring. Every one of the white collar jobs they ship over seas requires a college education, and he admits is the university system is healthy.

They are lobbying for reforms to K-12 not because they actually care whether or not K-12 education gets better but because it would take years to happen and in the meantime they can continue finding ways to increase the bottom line. If you're laying off people here to send the jobs over there, you are admitting that you have people who could do it over here regardless of the state of K12 education.

Odd little quote there... (2, Insightful)

LBArrettAnderson (655246) | more than 10 years ago | (#9027848)

Barrett pegs K-12 math and science education as the biggest threat to U.S. employment, but when pressed about U.S. kids who do well in both, attend excellent universities, but have no guarantees of good jobs when they graduate, Barrett remarks 'I don't have a solution to that one.'

That seems like a somewhat pointless addition to your news submission, theodp. I wonder why it's in there...

The first thing he "pegs" has nothing to do with the "remark" he makes. It is a threat to employment because if there aren't enough kids interested in math and science, we're screwed.

Jobs leaving US for Cheap labor and R&D (4, Insightful)

MakoStorm (699968) | more than 10 years ago | (#9027849)

To turn a small profit, they have outsourced over seas and cut the people that brought them to their current size. If turning on the people who made you what you are isnt treason, then what is?

Re:Jobs leaving US for Cheap labor and R&D (1)

NineNine (235196) | more than 10 years ago | (#9027867)

It's business. Maybe not good business, but business, nonetheless. Companies in the US haven't been loyal to their employees in many years. Employees who are foolishly trying to be loyal to their employers are just being stupid. You do what you can to earn as much as possible, regardless of company. The companies will try to pay as little as possible, regardless of employees. That's how capitalism works.

Low standards in K-12 (3, Insightful)

duckpoopy (585203) | more than 10 years ago | (#9027850)

Kids with Down's Syndrome can graduate from US public schools. I suppose it is good for the ego of the disabled kid, but it seems to indicate that standards are pretty low here.

Re:Low standards in K-12 (1)

crackshoe (751995) | more than 10 years ago | (#9027886)

The problem is social advancement - that everyone "deserves" to graduate after n years of school, and haev to keep up with their 'peers' or they'll feel bad about themselves. Schools resist both holding back and letting kids ahead.

Re:Low standards in K-12 (4, Insightful)

ImpTech (549794) | more than 10 years ago | (#9028034)

Well, its not like they lower the standards for everyone so that the downs syndrome kid will pass. They lower the standards for that kid. I don't know if it really helps the impaired kids to be handled that way, but I don't see how it necessarily hurts anybody else.

"Traitors" and "Benedict Arnold": Double Standard? (5, Insightful)

Mad Man (166674) | more than 10 years ago | (#9027858)

http://volokh.com/2004_03_14_volokh_archive.html#1 07922202284050918 [volokh.com]

[Eugene Volokh, 3/15/2004 07:53:35 AM]

Calling people traitors: As readers of this blog know, I've been quite critical of people calling others "traitors" simply because they disagree with them about the war or about foreign policy. There should be plenty of room in civil debate for good-faith disagreement about what's good for the country. Moreover, decent Americans can still sometimes consider the legitimate interests beyond the American national interest -- for instance, they might oppose an attack on some country because of a concern about the country's innocent citizens, whether or not the attack is in the interests of America's citizens. It's neither fair nor productive to reduce legitimate policy disagreements to accusations of lack of patriotism, or, worse still, treason?

But if this is true, then what's with all this that we've been hearing about "Benedict Arnold CEOs"? There are lots of hard and interesting questions about how American businessmen should deal with international competition. Some think that outsourcing is on balance bad for America, others think it's good. Some think that businessmen should focus first and foremost on the interests of America generally, others that businessmen should primarily serve the interests of their shareholders (within, of course, the boundaries of the law) -- or that outsourcing helps both shareholders and, ultimately, America generally, since without it we'd lose our competitive edge and thus have to lay off even more people. Reasonable minds can differ on this. But there's no justification for waging this battle through slurs and insults, and allusions (even if clearly hyperbolic) to a man whose name has become a snonym for "traitor."

But if I'm mistaken, and "Benedict Arnold" is permissible political hyperbole to be used against people whose economic policies you think undermine the American national interest, then why isn't "traitor" permissible political hyperbole to be used against people whose foreign policy you think undermines the American national interest?

what an example of CEO logic (2, Insightful)

DavidKirkBeale (747102) | more than 10 years ago | (#9027860)

Phase 1: Blame K-12 schooling here in the States, thus taking the blame off me and instead saying, "Hey, the educational system and all those 'teachers' are at fault, not little old Intel!!!"

Phase 2: When confronted with the possibility that some kids have "slipped through the cracks" of the US education system and actually become quite smart, smart enough even to possibly hold a job at Intel and do it quite well, COMPLETELY DENY PHASE 1'S EXISTENCE.

Free Rider (1)

CashCarSTAR (548853) | more than 10 years ago | (#9027863)

This seems to me to be a varient on the classical Free Rider problem.

In a nutshell, all these companies expect somebody else to take the competitiveness hit so the economy will keep humming along. The problem is, nobody is going to blink first.

Put on top of that, the people actually making the decisions will actually BENEFIT from an economic crash/depression. Their relative worth will skyrocket because of the massive deinflation.

What can be done? Well, protectionism is bad, I guess. This is the end of the capitalist empire, I think. The Soviet Union fell..now the west is going to fall as well.

Stop WHINING slashdotters -- DO something (5, Interesting)

YankeeInExile (577704) | more than 10 years ago | (#9027864)

Globalisation is not going away. Outsourcing is not going away. IT jobs in the US are going away.

Go see Grapes of Wrath [imdb.com] , and get a good understanding of what real hardship is like. Nasty fact of life: Things change. And no amount of political posturing, wishing, whining, begging, or threatening is going to change that.

If you really want to be a coder - that is - if you chose IT because you genuinely love it (I do), then emigrate.

You cannot change the attractiveness of outsourcing through fiat. However you can change your situation until you are more attractive than Ravi's House of Outsourcing and Tandoori[1] and you will not have trouble finding work.

Just as the dot-com bubble was collapsing, I took my meager savings and moved to a place where the cost of living is low, but infrastructure is well developed. There were surely tradeoffs - learning a new (human) language is substantially more difficult than learning a new programming language, but to be frank, that was a big part of the adventure: Throw myself into a foreign culture and see how well I could adapt.

Now, I have a comfortable, but not lavish lifestyle - two junior programmers and one artist working on projects I manage (who make about 150% of what local companies pay for the same work) - and without hesitation I can say: I have a much better quality of life than I ever had working in the dot-bomb universe. And with personal freedom increasingly a joke in my homeland, I have a strong feeling I will never repatriate.

If you chose IT because you thought it would lead to riches and a comfortable lifestyle: Well - you should have paid more attention to your carreer counselor in high school. It is not too late to learn to be a plumber, or a car mechanic.

1: The one thing I cannot get in Mexico that I really loved when I was in the Silly-con Valley: Indian food

Go see Grapes of Wrath (4, Funny)

lildogie (54998) | more than 10 years ago | (#9027898)

Or, if you're literate, read the book!

Re:Go see Grapes of Wrath (0)

Anonymous Coward | more than 10 years ago | (#9027932)

It's a book now? When did that happen?

I haven't seen it discussed on Oprah yet, so I'll probably wait to see what everybody else says about it.

Re:Go see Grapes of Wrath (0)

Anonymous Coward | more than 10 years ago | (#9027933)

This is /., you know ... They'd loose they're way to the liberry.

Re:Stop WHINING slashdotters -- DO something (1)

ThomasFlip (669988) | more than 10 years ago | (#9027989)

If you are passionate about working in the IT sector, and you are very well educated, then chances are you will be able to find a decent job at some level in North America. I don't think it will get to the level of something like Nike running shoes where everything is done over-seas.

He's right... (1, Insightful)

trifster (307673) | more than 10 years ago | (#9027865)

K-12 math and science is poor in the U.S. Also poor are employees perceptions of the goals of a businees. The goal of a business is NOT to give graduates jobs. The goal of ANY business is TO MAKE MONEY! I've been unemployeed and I have been employed. The fact is that outsourcing work is a compeditive advantage for business and in the log run benifits all. Trade whether goods or services is a good thing. Ask any economist!

ha (1)

nomadic (141991) | more than 10 years ago | (#9027866)

The old "but American workers just aren't as smart/skilled/hard-working" idiocy. Repeat a lie enough and people start thinking it's the truth, which is pretty much what people like him do. It would make me boycott Intel, except I already don't because AMD is so much better.

Re:ha (0)

Anonymous Coward | more than 10 years ago | (#9027900)

Yeah, AMD is a shining example of how to keep Americans employed. After all, they keep shifting more and more production from their old plants in Texas to that shiny new chip fab in Dresden. That'll employ a lot of Americans! ...oh wait.

K-12 Education??? (1)

illumina+us (615188) | more than 10 years ago | (#9027869)

How can he say that when Intel just about won't hire anyone that doesn't at least have their bachelors?

People are crazy (5, Insightful)

feelyoda (622366) | more than 10 years ago | (#9027874)

Since when is it the government's job to secure your own employment?

If you did well in school, have a good education, but can't find a job, why not start your own business and follow the advice: Compete!

I want to fight the nanny-state mentality that the government
1) Should
2) Can, even if it wanted to,
control the economy and my economic well being.

As for failing K-12 schools, clearly more volunteerism by parents and intelligent people, along with more incentive for competition among schools, is the solution.

Again, if you are unemployed, maybe you should fix that situation. Try inventing something in your garage while working at McDonalds. They are always hiring.

Re:People are crazy (1)

CashCarSTAR (548853) | more than 10 years ago | (#9027927)

So when the entire economy, and by extension, the entire society collapses, and everything reverts into Communism/Fascism, that will be all fine and dandy?

Sorry. Don't work like that.

First "This is Bu$h's fault" Post (-1, Offtopic)

Anonymous Coward | more than 10 years ago | (#9027875)

"We are the borg... resistance is futile" (0)

Anonymous Coward | more than 10 years ago | (#9027878)

You work, I spend.

Suck it up crybabies!!!! (2, Insightful)

bazmail (764941) | more than 10 years ago | (#9027879)

Searching around for the best deal and leveraging it to make big profits is what our great country was built on. Why should Intel be forced to pay higher wages to less skilled employees here?

Thats called COMMUNISM!!

Re:Suck it up crybabies!!!! (1)

lildogie (54998) | more than 10 years ago | (#9027889)

Suck it up, CEO's, who don't like being called names.

Let's not be so anxious to jump at him (4, Interesting)

WarSpiteX (98591) | more than 10 years ago | (#9027881)

Barrett does have a point about the K-12 education in the US. Not only are schools passing flunky kids because the parents don't want their kids to fall behind (lawsuits being expensive and all), the US government itself seems determined to push a "faith" rather than "fact" educational agenda. It's not like the citizenry is helping either, what with creationist theme parks [nytimes.com] springing up.

Amusing anecdotes aside, the fact of the matter is that Americans simply don't value education as much as other nationalities. I'm sure I'm not the only one who came here from Europe, Asia or India as a kid and realized he was three grades ahead of his peers in math and science. It goes without saying, if a child is unaware of basic physics and chemistry, he'll never wonder, marvel at and be curious about just how we went from light bulbs to transistors to microchips. While not everyone needs to be like that, at least we should provide the knowledge required to roughly understand how technology works, to spur those individuals who really want to know just how a processor decides what "transistor" of the millions it has on board is switched.

Re:Let's not be so anxious to jump at him (2, Insightful)

maelstrom (638) | more than 10 years ago | (#9027923)

Bullshit he doesn't have a point. There are many excellent, well educated, CS and EE students graduating every year, and many of them are having a hell of a time finding a job in this market, or are you trying to tell me they haven't been educated in math and science?

Countdown, 10 years until backfire. (1, Insightful)

Anonymous Coward | more than 10 years ago | (#9027883)

This outsourcing thing will seem like a great idea to these companies, until the folks overseas realize they don't need an American management structure in place telling them what to do.

Then the shareholders of Intel can enjoy knowing they outsourced all their expertise to their new greatest rivals. They might think patents and whatever will save them, but they're nuts if they think other trading blocks will allow their workers to be wage slaves to U.S. "Intellectual Property".

Good luck Intel; it might buy you a few years, but that's all.

Stop whining about outsourcing you morons! (3, Interesting)

Rude-Boy (25678) | more than 10 years ago | (#9027891)

It's hardly the monsterous thing everyone is making it out to be.

Read this:

LINK [foreignaffairs.org]

The Outsourcing Bogeyman By Daniel W. Drezner

From Foreign Affairs, May/June 2004

Summary: According to the election-year bluster of politicians and pundits, the outsourcing of American jobs to other countries has become a problem of epic proportion. Fortunately, this alarmism is misguided. Outsourcing actually brings far more benefits than costs, both now and in the long run. If its critics succeed in provoking a new wave of American protectionism, the consequences will be disastrous -- for the U.S. economy and for the American workers they claim to defend.

Daniel W. Drezner is Assistant Professor of Political Science at the University of Chicago and the author of "The Sanctions Paradox." He keeps a weblog at www.danieldrezner.com/blog; full references and data sources for this article can be found here.


When a presidential election year coincides with an uncertain economy, campaigning politicians invariably invoke an international economic issue as a dire threat to the well-being of Americans. Speechwriters denounce the chosen scapegoat, the media provides blanket coverage of the alleged threat, and legislators scurry to introduce supposed remedies.

The cause of this year's commotion is offshore outsourcing -- the alleged migration of American jobs overseas. The depth of alarm was strikingly illustrated by the firestorm of reaction to recent testimony by N. Gregory Mankiw, the head of President George W. Bush's Council of Economic Advisers. No economist really disputed Mankiw's observation that "outsourcing is just a new way of doing international trade," which makes it "a good thing." But in the political arena, Mankiw's comments sparked a furor on both sides of the aisle. Democratic presidential candidate John Kerry accused the Bush administration of wanting "to export more of our jobs overseas," and Senate Minority Leader Tom Daschle quipped, "If this is the administration's position, I think they owe an apology to every worker in America." Speaker of the House Dennis Hastert, meanwhile, warned that "outsourcing can be a problem for American workers and the American economy."

Critics charge that the information revolution (especially the Internet) has accelerated the decimation of U.S. manufacturing and facilitated the outsourcing of service-sector jobs once considered safe, from backroom call centers to high-level software programming. (This concern feeds into the suspicion that U.S. corporations are exploiting globalization to fatten profits at the expense of workers.) They are right that offshore outsourcing deserves attention and that some measures to assist affected workers are called for. But if their exaggerated alarmism succeeds in provoking protectionist responses from lawmakers, it will do far more harm than good, to the U.S. economy and to American workers.

Should Americans be concerned about the economic effects of outsourcing? Not particularly. Most of the numbers thrown around are vague, overhyped estimates. What hard data exist suggest that gross job losses due to offshore outsourcing have been minimal when compared to the size of the entire U.S. economy. The outsourcing phenomenon has shown that globalization can affect white-collar professions, heretofore immune to foreign competition, in the same way that it has affected manufacturing jobs for years. But Mankiw's statements on outsourcing are absolutely correct; the law of comparative advantage does not stop working just because 401(k) plans are involved. The creation of new jobs overseas will eventually lead to more jobs and higher incomes in the United States. Because the economy -- and especially job growth -- is sluggish at the moment, commentators are attempting to draw a connection between offshore outsourcing and high unemployment. But believing that offshore outsourcing causes unemployment is the economic equivalent of believing that the sun revolves around the earth: intuitively compelling but clearly wrong.

Should Americans be concerned about the political backlash to outsourcing? Absolutely. Anecdotes of workers affected by outsourcing are politically powerful, and demands for government protection always increase during economic slowdowns. The short-term political appeal of protectionism is undeniable. Scapegoating foreigners for domestic business cycles is smart politics, and protecting domestic markets gives leaders the appearance of taking direct, decisive action on the economy.

Protectionism would not solve the U.S. economy's employment problems, although it would succeed in providing massive subsidies to well-organized interest groups. In open markets, greater competition spurs the reallocation of labor and capital to more profitable sectors of the economy. The benefits of such free trade -- to both consumers and producers -- are significant. Cushioning this process for displaced workers makes sense. Resorting to protectionism to halt the process, however, is a recipe for decline. An open economy leads to concentrated costs (and diffuse benefits) in the short term and significant benefits in the long term. Protectionism generates pain in both the short term and the long term.


Outsourcing occurs when a firm subcontracts a business function to an outside supplier. This practice has been common within the U.S. economy for some time. (Witness the rise of large call centers in the rural Midwest.) The reduction of communication costs and the standardization of software packages have now made it possible to outsource business functions such as customer service, telemarketing, and document management. Other affected professions include medical transcription, tax preparation, and financial services.

The numbers that are bandied about on offshore outsourcing sound ominous. The McKinsey Global Institute estimates that the volume of offshore outsourcing will increase by 30 to 40 percent a year for the next five years. Forrester Research estimates that 3.3 million white-collar jobs will move overseas by 2015. According to projections, the hardest hit sectors will be financial services and information technology (IT). In one May 2003 survey of chief information officers, 68 percent of IT executives said that their offshore contracts would grow in the subsequent year. The Gartner research firm has estimated that by the end of this year, 1 out of every 10 IT jobs will be outsourced overseas. Deloitte Research predicts the outsourcing of 2 million financial-sector jobs by 2009.

At first glance, current macroeconomic indicators seem to support the suspicion that outsourcing is destroying jobs in the United States. The past two years have witnessed moderate growth and astonishing productivity gains, but overall job growth has been anemic. The total number of manufacturing jobs has declined for 43 consecutive months. Surely, many observers insist, this must be because the jobs created by the U.S. recovery are going to other countries. Morgan Stanley analyst Stephen Roach, for example, has pointed out that "this is the first business cycle since the advent of the Internet -- the enabler of a new real-time connectivity to low-cost offshore labor pools." He adds, "I don't think it's a coincidence that this jobless recovery has occurred in such an environment." Those who agree draw on anecdotal evidence to support this assertion. CNN's Lou Dobbs routinely harangues U.S. companies engaged in offshore outsourcing in his "Exporting America" series.

Many IT executives have themselves contributed to this perception. When IBM announced plans to outsource 3,000 jobs overseas this year, one of its executives said, "[Globalization] means shifting a lot of jobs, opening a lot of locations in places we had never dreamt of before, going where there's low-cost labor, low-cost competition, shifting jobs offshore." Nandan Nilekani, the chief executive of the India-based Infosys Technologies, said at this year's World Economic Forum, "Everything you can send down a wire is up for grabs." In January testimony before Congress, Hewlett-Packard chief Carly Fiorina warned that "there is no job that is America's God-given right anymore."

That last statement chills the blood of most Americans. Few support the cause of free trade for its own sake, out of pure principle. The logic underlying an open economy is that if the economy sheds jobs in uncompetitive sectors, employment in competitive sectors will grow. If hi-tech industries are no longer competitive, where will new jobs be created?


Before answering that question, Americans need to separate fact from fiction. The predictions of job losses in the millions are driving the current outsourcing hysteria. But it is crucial to note that these predictions are of gross, not net, losses. During the 1990s, offshore outsourcing was not uncommon. (American Express, for one, set up back-office operations in India more than a decade ago.) But no one much cared because the number of jobs leaving U.S. shores was far lower than the number of jobs created in the U.S. economy.

Similarly, most current predictions are not as ominous as they first sound once the numbers are unpacked. Most jobs will remain unaffected altogether: close to 90 percent of jobs in the United States require geographic proximity. Such jobs include everything from retail and restaurants to marketing and personal care -- services that have to be produced and consumed locally, so outsourcing them overseas is not an option. There is also no evidence that jobs in the high-value-added sector are migrating overseas. One thing that has made offshore outsourcing possible is the standardization of such business tasks as data entry, accounting, and IT support. The parts of production that are more complex, interactive, or innovative -- including, but not limited to, marketing, research, and development -- are much more difficult to shift abroad. As an International Data Corporation analysis on trends in IT services concluded, "the activities that will migrate offshore are predominantly those that can be viewed as requiring low skill since process and repeatability are key underpinnings of the work. Innovation and deep business expertise will continue to be delivered predominantly onshore." Not coincidentally, these are also the tasks that generate high wages and large profits and drive the U.S. economy.

As for the jobs that can be sent offshore, even if the most dire-sounding forecasts come true, the impact on the economy will be negligible. The Forrester prediction of 3.3 million lost jobs, for example, is spread across 15 years. That would mean 220,000 jobs displaced per year by offshore outsourcing -- a number that sounds impressive until one considers that total employment in the United States is roughly 130 million, and that about 22 million new jobs are expected to be added between now and 2010. Annually, outsourcing would affect less than .2 percent of employed Americans.

There is also reason to believe that the unemployment caused by outsourcing will be lower than expected. Gartner assumed that more than 60 percent of financial-sector employees directly affected by outsourcing would be let go by their employers. But Boston University Professor Nitin Joglekar has examined the effect of outsourcing on large financial firms and found that less than 20 percent of workers affected by outsourcing lose their jobs; the rest are repositioned within the firm. Even if the most negative projections prove to be correct, then, gross job loss would be relatively small.

Moreover, it is debatable whether actual levels of outsourcing will ever match current predictions. Despite claims that the pace of onshore and offshore outsourcing would quicken over time, there was no increase in 2003. In fact, TPI Inc., an outsourcing advisory firm, even reports that the total value of business process outsourcing deals in the United States fell by 32 percent in 2003.

There is no denying that the number of manufacturing jobs has fallen dramatically in recent years, but this has very little do with outsourcing and almost everything to do with technological innovation. As with agriculture a century ago, productivity gains have outstripped demand, so fewer and fewer workers are needed for manufacturing. If outsourcing were in fact the chief cause of manufacturing losses, one would expect corresponding increases in manufacturing employment in developing countries. An Alliance Capital Management study of global manufacturing trends from 1995 to 2002, however, shows that this was not the case: the United States saw an 11 percent decrease in manufacturing employment over the course of those seven years; meanwhile, China saw a 15 percent decrease and Brazil a 20 percent decrease. Globally, the figure for manufacturing jobs lost was identical to the U.S. figure -- 11 percent. The fact that global manufacturing output increased by 30 percent in that same period confirms that technology, not trade, is the primary cause for the decrease in factory jobs. A recent analysis of employment data from U.S. multinational corporations by the U.S. Department of Commerce reached the same conclusion.

What about the service sector? Again, the data contradict the popular belief that U.S. jobs are being lost to foreign countries without anything to replace them. In the case of many low-level technology jobs, the phenomenon has been somewhat exaggerated. For example, a Datamonitor study found that global call-center operations are being outsourced at a slower rate than previously thought -- only five percent are expected to be located offshore by 2007. Dell and Lehman Brothers recently moved some of their call centers back to the United States from India because of customer complaints. And done properly, the offshore outsourcing of call centers creates new jobs at home. Delta Airlines outsourced 1,000 call-center jobs to India in 2003, but the $25 million in savings allowed the firm to add 1,200 reservation and sales positions in the United States.

Offshore outsourcing is similarly counterbalanced by job creation in the high-end service sector. An Institute for International Economics analysis of Bureau of Labor Statistics employment data revealed that the number of jobs in service sectors where outsourcing is likely actually increased, even though total employment decreased by 1.7 percent. According to the Bureau of Labor Statistics "Occupation Outlook Handbook," the number of IT-related jobs is expected to grow 43 percent by 2010. The case of IBM reinforces this lesson: although critics highlight the offshore outsourcing of 3,000 IT jobs, they fail to mention the company's plans to add 4,500 positions to its U.S. payroll. Large software companies such as Microsoft and Oracle have simultaneously increased outsourcing and domestic payrolls.

How can these figures fit with the widespread perception that IT jobs have left the United States? Too often, comparisons are made to 2000, an unusual year for the technology sector because Y2K fears and the height of the dot-com bubble had pushed employment figures to an artificially high level. When 1999 is used as the starting point, it becomes clear that offshore outsourcing has not caused a collapse in IT hiring. Between 1999 and 2003, the number of jobs in business and financial operations increased by 14 percent. Employment in computer and mathematical positions increased by 6 percent.

It is also worth remembering that many predictions come from management consultants who are eager to push the latest business fad. Many of these consulting firms are themselves reaping commissions from outsourcing contracts. Much of the perceived boom in outsourcing stems from companies' eagerness to latch onto the latest management trends; like Dell and Lehman, many will partially reverse course once the hidden costs of offshore outsourcing become apparent.

If offshore outsourcing is not the cause of sluggish job growth, what is? A study by the Federal Reserve Bank of New York suggests that the economy is undergoing a structural transformation: jobs are disappearing from old sectors (such as manufacturing) and being created in new ones (such as mortgage brokering). In all such transformations, the creation of new jobs lags behind the destruction of old ones. In other words, the recent recession and current recovery are a more extreme version of the downturn and "jobless recovery" of the early 1990s -- which eventually produced the longest economic expansion of the post-World War II era. Once the structural adjustments of the current period are complete, job growth is expected to be robust. (And indeed, current indicators are encouraging: there has been a net increase in payroll jobs and in small business employment since 2003 and a spike in IT entrepreneurial activity.)

Offshore outsourcing is undoubtedly taking place, and it will likely increase over the next decade. However, it is not the tsunami that many claim. Its effect on the U.S. economy has been exaggerated, and its effect on the U.S. employment situation has been grossly exaggerated.


To date, the media's coverage of outsourcing has focused on its perceived costs. This leaves out more than half of the story. The benefits of offshore outsourcing should not be dismissed.

The standard case for free trade holds that countries are best off when they focus on sectors in which they have a comparative advantage -- that is, sectors that have the lowest opportunity costs of production. Allowing countries to specialize accordingly increases productivity across all countries. This specialization translates into cheaper goods, and a greater variety of them, for all consumers.

The current trend of outsourcing business processes overseas is comparative advantage at work. The main driver of productivity gains over the past decade has been the spread of information technology across the economy. The commodification of simple business services allows those benefits to spread further, making growth even greater.

The data affirm this benefit. Catherine Mann of the Institute for International Economics conservatively estimates that the globalization of IT production has boosted U.S. GDP by $230 billion over the past seven years; the globalization of IT services should lead to a similar increase. As the price of IT services declines, sectors that have yet to exploit them to their fullest -- such as construction and health care -- will begin to do so, thus lowering their cost of production and improving the quality of their output. (For example, cheaper IT could one day save lives by reducing the number of "adverse drug events." Mann estimates that adding bar codes to prescription drugs and instituting an electronic medical record system could reduce the annual number of such events by more than 80,000 in the United States alone.)

McKinsey Global Institute has estimated that for every dollar spent on outsourcing to India, the United States reaps between $1.12 and $1.14 in benefits. Thanks to outsourcing, U.S. firms save money and become more profitable, benefiting shareholders and increasing returns on investment. Foreign facilities boost demand for U.S. products, such as computers and telecommunications equipment, necessary for their outsourced function. And U.S. labor can be reallocated to more competitive, better-paying jobs; for example, although 70,000 computer programmers lost their jobs between 1999 and 2003, more than 115,000 computer software engineers found higher-paying jobs during that same period. Outsourcing thus enhances the competitiveness of the U.S. service sector (which accounts for 30 percent of the total value of U.S. exports). Contrary to the belief that the United States is importing massive amounts of services from low-wage countries, in 2002 it ran a $64.8 billion surplus in services.

Outsourcing also has considerable noneconomic benefits. It is clearly in the interest of the United States to reward other countries for reducing their barriers to trade and investment. Some of the countries where U.S. firms have set up outsourcing operations -- including India, Poland, and the Philippines -- are vital allies in the war on terrorism. Just as the North American Free Trade Agreement (NAFTA) helped Mexico deepen its democratic transition and strengthen its rule of law, the United States gains considerably from the political reorientation spurred by economic growth and interdependence.

Finally, the benefits of "insourcing" should not be overlooked. Just as U.S. firms outsource positions to developing countries, firms in other countries outsource positions to the United States. According to the Bureau of Labor Statistics, the number of outsourced jobs increased from 6.5 million in 1983 to 10 million in 2000. The number of insourced jobs increased even more in the same period, from 2.5 million to 6.5 million.


When it comes to trade policy, there are two iron laws of politics. The first is that the benefits of trade diffuse across the economy, but the costs of trade are concentrated. Thus, those made worse off by open borders will form the more motivated interest group. The second is that public hostility toward trade increases during economic downturns. When forced to choose between statistical evidence showing that trade is good for the economy and anecdotal evidence of job losses due to import competition, Americans go with the anecdotes.

Offshore outsourcing adds two additional political pressures. The first stems from the fact that technological innovation has converted what were thought to be nontradeable sectors into tradeable ones. Manufacturing workers have long been subject to the rigors of global competition. White-collar service-sector workers are being introduced to these pressures for the first time -- and they are not happy about it. As Raghuram Rajan and Luigi Zingales point out in "Saving Capitalism From the Capitalists," globalization and technological innovation affect professions such as law and medicine that have not changed all that much for centuries. Their political reaction to the threat of foreign competition will be fierce.

The second pressure is that the Internet has greatly facilitated political organization, making it much easier for those who blame outsourcing for their troubles to rally together. In recent years, countless organizations -- with names such as Rescue American Jobs, Save U.S. Jobs, and the Coalition for National Sovereignty and Economic Patriotism -- have sprouted up. Such groups have disproportionately focused on white-collar tech workers, even though the manufacturing sector has been much harder hit by the recent economic slowdown.

It should come as no surprise, then, that politicians are scrambling to get ahead of the curve. During the Democratic primary in South Carolina -- a state hit hard by the loss of textile jobs -- billboards asked voters, "Lost your job to free trade or offshore outsourcing yet?" Last Labor Day, President Bush pledged to appoint a manufacturing czar to get to the bottom of the outflow of manufacturing positions. In his stump speech, John Kerry bashes "Benedict Arnold CEOs [who] send American jobs overseas."

Where presidential candidates lead, legislators are sure to follow. Senator Charles Schumer (D-N.Y.) claimed in a January "New York Times" op-ed authored with Paul Craig Roberts that because of increased capital mobility, the law of comparative advantage is now null and void. Senator Tom Daschle (D-S.D.) has observed, "George Bush says the economy is creating jobs. But let me tell you, China is one long commute. And let me tell you, I'm tired of watching jobs shift overseas." Senator Christopher Dodd (D-Conn.) and Representative Nancy Johnson (R-Conn.) are sponsoring the USA Jobs Protection Act to prevent U.S. companies from hiring foreign workers for positions when American workers are available. In February, Senate Democrats announced their intentions to introduce the Jobs for America Act, requiring companies to give public notice three months in advance of any plan to outsource 15 or more jobs. In March, the Senate overwhelmingly approved a measure banning firms from federal contracts if they outsource any of the work overseas. In the past two years, more than 20 state legislatures have introduced bills designed to make various forms of offshore outsourcing illegal.


There are clear examples of jobs being sent across U.S. borders because of U.S. trade policy -- but not for the reasons that critics of outsourcing believe. Consider the example of candy-cane manufacturers: despite the fact that 90 percent of the world's candy canes are consumed in the United States, manufacturers have sent much of their production south of the border in the past five years. The attraction of moving abroad, however, has little to do with low wages and much to do with protectionism. U.S. quotas on sugar imports have, in recent years, caused the domestic price of sugar to become 350 percent higher than world market prices. As candy makers have relocated production to countries where sugar is cheaper, between 7,500 and 10,000 workers in the Midwest have lost their jobs -- victims not of outsourcing but of the kind of protectionism called for by outsourcing's critics.

A similar story can be told of the steel tariffs that the Bush administration foolishly imposed from March 2002 until December 2003 (when a ruling by the World Trade Organization prompted their cancellation). The tariffs were allegedly meant to protect steelworkers. But in the United States, steel users employ roughly 40 times more people than do steel producers. Thus, according to estimates by the Institute for International Economics, between 45,000 and 75,000 jobs were lost because higher steel prices made U.S. steel-using industries less competitive.

These examples illustrate the problem with relying on anecdotes when debating the effects of offshore outsourcing. Anecdotes are incomplete narratives that fail to capture opportunity costs. In the cases of steel and sugar, the opportunity cost of using protectionism to save jobs was the much larger number of jobs lost in sectors rendered less productive by higher input prices. Trade protectionism amounts to an inefficient subsidy for uncompetitive sectors of the economy, which leads to higher prices for consumers and a lower rate of return for investors. It preserves jobs in less competitive sectors while destroying current and future jobs in sectors that have a comparative advantage. Thus, if barriers are erected to prevent offshore outsourcing, the overall effect will not be to create jobs but to destroy them.

So if protectionism is not the answer, what is the correct response? The best piece of advice is also the most difficult for elected officials to follow: do no harm. Politicians never get credit for inaction, even when inaction is the best policy. President George H.W. Bush, for example, was pilloried for refusing to follow Japan's lead by protecting domestic markets -- even though his refusal helped pave the way for the 1990s boom by letting market forces allocate resources to industries at the technological frontier. Restraint is anathema to the political class, but it is still the most important response to the furor over offshore outsourcing. As Robert McTeer, president of the Federal Reserve Bank of Dallas, said when asked about policy responses to outsourcing, "If we are lucky, we can get through the year without doing something really, really stupid."

The problem of offshore outsourcing is less one of economics than of psychology -- people feel that their jobs are threatened. The best way to help those actually affected, and to calm the nerves of those who fear that they will be, is to expand the criteria under which the Trade Adjustment Assistance (TAA) program applies to displaced workers. Currently, workers cannot apply for TAA unless overall sales or production in their sector declines. In the case of offshore outsourcing, however, productivity increases allow for increased production and sales -- making TAA out of reach for those affected by it. It makes sense to rework TAA rules to take into account workers displaced by offshore outsourcing even when their former industries or firms maintain robust levels of production.

Another option would be to help firms purchase targeted insurance policies to offset the transition costs to workers directly affected by offshore outsourcing. Because the perception of possible unemployment is considerably greater than the actual likelihood of losing a job, insurance programs would impose a very small cost on firms while relieving a great deal of employee anxiety. McKinsey Global Institute estimates that such a scheme could be created for as little as four or five cents per dollar saved from offshore outsourcing. IBM recently announced the creation of a two-year, $25 million retraining fund for its employees who fear job losses from outsourcing. Having the private sector handle the problem without extensive government intervention would be an added bonus.


Until robust job growth returns, the debate over outsourcing will not go away -- the political temptation to scapegoat foreigners is simply too great. The refrain of "this time, it's different" is not new in the debate over free trade. In the 1980s, the Japanese variety of capitalism -- with its omniscient industrial policy and high nontariff barriers -- was supposed to supplant the U.S. system. Fifteen years later, that prediction sounds absurd. During the 1990s, the passage of NAFTA and the Uruguay Round of trade talks were supposed to create a "giant sucking sound" as jobs left the United States. Contrary to such fears, tens of millions of new jobs were created. Once the economy improves, the political hysteria over outsourcing will also disappear.

It is easy to praise economic globalization during boom times; the challenge, however, is to defend it during the lean years of a business cycle. Offshore outsourcing is not the bogeyman that critics say it is. Their arguments, however, must be persistently refuted. Otherwise, the results will be disastrous: less growth, lower incomes -- and fewer jobs for American workers.

Solution (1)

Rosco P. Coltrane (209368) | more than 10 years ago | (#9027893)

U.S. kids who do well in both, attend excellent universities, but have no guarantees of good jobs when they graduate, Barrett remarks 'I don't have a solution to that one.

I do have a solution: teach them to think globally, be mobile, and they'll naturally want to move to high-growth parts of the world, like India or S-E Asia. Then, maybe the US govermnent will realize the country is getting crusty when it sees all these people expatriating themselves.

The Europeans have been doing that for years. The french are only realizing now that their country is literally bleeding brains because they have such high taxes and high inertia, due to *gasp* social advantages and guaranteed outrageously high pay (U.S. kids who do well in both, attend excellent universities, but have no guarantees of good jobs when they graduate, Barrett remarks 'I don't have a solution to that one.yes, even at the lowest rate, a European employee is much much better off than an Indian). The US is heading that way too now.

The fact is, high-growth areas are those that have the least social protection. I say teach the youngs to want to go make money there for a while, after their graduation, while they're young, and come back home with plenty of experience and money to spend.

Can you really blame these people ? (2, Insightful)

ThomasFlip (669988) | more than 10 years ago | (#9027904)

I think we have a double standard here. Yeah we can outsource production jobs to Mexico and Asia in order to get cheap shoes and clothes. Nobody bitches about that. But all of a sudden when higher education jobs are taken away, we consider it a national crisis. The farming and manufacturing sectors have shrunk drastically over the past 50 years, thats not a national crisis. This is simply a result of change, something the United States tech workers are having a hard time dealing with. So either stop bitching, or do something about policy. These people have business's to run, they aren't philanthropists. Would you rather have a couple jobs at you're local tech firm, or no jobs because they went out of business.

Edumacation (1)

Prince Vegeta SSJ4 (718736) | more than 10 years ago | (#9027905)

I'd say there are four things. Education is probably the most important -- and I'd further refine it to K-12. The university education system is healthy

While I agree education is far more important than outsourcing, this may miss the point. While education generall is a sure fire way to make a decent living (I'm not talking about rap stars or ball players here), some people can't afford (or don't have access to) quality education.

If jobs in the US become solely comprised of Uber Brain power jobs, wherby the only decent pay is in those areas - what happens to everyone else. Do we ship the people who can't compete in the educational arena overseas? Do we make them all take minimum wage jobs?

I believe in survival of the fittest and all, but if we outsource everything because of cheap labor, we will increase the gap & the contrast between the wealthiest and poorest. When those areas become too saturated, you have an unsustainable situation.

I certainly don't have the answer to any of this, I wish somebody did.

Forgot my other point (1)

Prince Vegeta SSJ4 (718736) | more than 10 years ago | (#9027952)

it was a rough night last night.

Anyway The university education system is healthy, is nonsense. Sure you have many good schools out there, but you have many more universities that are nothing more than 'High School 2'. Many people graduate from these thinking there so educated, only to find out that their degree aint worth much.

He doesn't understand the problem (0)

Anonymous Coward | more than 10 years ago | (#9027909)

Barrett pegs K-12 math and science education as the biggest threat to U.S. employment, but when pressed about U.S. kids who do well in both, attend excellent universities, but have no guarantees of good jobs when they graduate, Barrett remarks 'I don't have a solution to that one.

And this quote is a prime example. If he truelly understood the problem faced by many in the tech industry, he would also understand why this is such a big problem. If business leaders tell us we don't have jobs because we don't have the training/education, and then we get the training/education they ask for, they should put their money where their mouth is. Unfortunately this is not the case. They would rather sit back and make more money, buy bigger houses and drive more expensive cars.

Competing with non-U.S. programmers is OK... (4, Insightful)

ulatekh (775985) | more than 10 years ago | (#9027920)

...the problem I have is that, thanks to widespread abuses in the H-1B visa program, foreign programmers are brought into the U.S. and paid very little compared to U.S. programmers.

Businesses say they do this because U.S. programmers don't have the skills they need, but with the widespread unemployment of computer programmers, this can't possibly be true.

H-1B made sense during the tech boom, but now that we're in a tech bust, there's no legitimate excuse for it.

If we stopped the H-1B visa program, all those programmers went home, and then software jobs got outsourced to their countries, that'd be OK with me -- at least it'd be honest. Right now, U.S. programmers have the worst of both worlds.

And as for doing something besides programming for a living...you mean to tell me that I spent my teenage years actually studying, getting good grades, and keeping my nose clean, I went to college to get my B.S. in computer science, I worked my tail off for 12 years...and now I'm unemployed and poor? Damn, I could have been doing drugs and partying all that time, and I'd have exactly the same to show for it! I deeply resent that losers, slackers, and lowlifes are better off than I am. Doesn't anyone understand that???

And how the heck am I supposed to afford another college degree, when I'm facing losing everything I own?

Re:Competing with non-U.S. programmers is OK... (1, Troll)

Rosco P. Coltrane (209368) | more than 10 years ago | (#9028011)

And as for doing something besides programming for a living...you mean to tell me that I spent my teenage years actually studying, getting good grades, and keeping my nose clean, I went to college to get my B.S. in computer science, I worked my tail off for 12 years...and now I'm unemployed and poor? Damn

Well cry me a river...

I'll tell you what: if you don't find what you want in your country, move to another country that'll welcome it. I did it: I moved to the US during the bubble and I got paid lots of money while people in my home country couldn't find any job because of companies in my country outsourcing to the US (you didn't complain about that did you?). You know what? when I was in the US, I was hired because I could code and talk the language of that company's foreign customers, who themselves didn't want to pay extra to get the work done locally. Amazing eh? but that didn't bother you.

Well, sorry for you my friend, but it's your turn. Go somewhere where your competences will be welcome, instead of looking at your shoes and mourning the good ole days. If you don't want to move away from your country (I wouldn't if I were you, it's tough to be American outside of the US these days), then at least stop complaining about the flip-side of a situation your country profited from for a very long time, bite your tongue and good luck at the unemployment office, like the rest of us...

but if it's you... (0)

Anonymous Coward | more than 10 years ago | (#9027926)

There's little uproar of any serious consequence over sweatshops and slave labor. People happily buy imported goods (cars, clothes, electronics, etc) with no qualms. But jobs in your sector are moving overseas and it's suddenly a big traitorous conspiracy that must be stopped.

When was the last time Barrett worked for a living (0)

blair1q (305137) | more than 10 years ago | (#9027930)

This guy doesn't work. He apportions work. He has computed that his cashflow will increase if he apportions the work outside of the nation that gave him the stability and security to live a life of education and thoughtfulness, instead of dodging bullets and fighting for scraps with dogs in the street (or scraps of dogs in the street, depending on where you are). And the work he sends out of this nation is work that exists because of the investment by this nation; or does he forget that he was the Chair of SEMATECH and that his plants are the beneficiaries of vast reductions in local taxes?

Craig Barrett is, absolutely, a traitor to America, and loyal only to the Feudalists who are taking over America.

If he honestly can't see that, it's because he's been blinded by greed and propaganda.

Education? (1)

Kusand (597784) | more than 10 years ago | (#9027958)

Well, let's see. The teachers don't know the stuff they're teaching? Could that be because 99.9% of the people that DO know their stuff are off at high-paying jobs rather than educating? Most teachers are there because either 1) they're really passionate for it or 2) they couldn't find anything better. Passion alone is a shoddy substitute for knowledge. But no one wants to be the one to pay teachers more. Citizens? Don't want more taxes. Corporations? Don't want to cut into the bottom line and help. And soon we'll be screwed.

US Constitution (2, Troll)

morgandelra (448341) | more than 10 years ago | (#9027962)

Since when does the US Constitution state that all people who go through public education are guaranteed to get a good, high paying job, straight out of school? I must have missed that part....

Other teams have to play slower? (1)

Trevin (570491) | more than 10 years ago | (#9027966)

'We do not send our basketball teams to compete against the rest of the world, saying the other teams have to play slower because our folks aren't fit enough to run as fast.'

Give me a break! Has he ever heard of the "dream team" we sent to the U.S. Olympics in 1996? Our basketball players were so good, the rest of the world couldn't touch us. It was no contest. But the other significant difference between our players and other countries' players is that ours had a much higher salary. At least in basketball, we know our players are worth it.

I'll bet many of our IT people are better at their jobs than a lot of the workers in 3rd-world countries. But do our CEO's recognize that by hiring them for a higher salary? No, they just look at the $$$ and hire the people who are cheapest.

Re:Other teams have to play slower? (0)

Anonymous Coward | more than 10 years ago | (#9028036)

Our basketball players were so good, the rest of the world couldn't touch us. It was no contest. But the other significant difference between our players and other countries' players is that ours had a much higher salary
Salary (or rather a professional environment, where you can afford to make sport a career) is obviously important, but what's probably more significant is that we have a much larger pool of people to draw on. If 1 person in 5 million is exceptionally good at a given sport, we're far more likely to be able to field a dozen of them than a country with a population of 20 million (heck, some of the countries that joined the EU yesterday only have a couple of million people in total).

Aww, Did da poor widdle CEO get his feelings hurt? (1)

Greyfox (87712) | more than 10 years ago | (#9027969)

Here's the world's smallest violin. Try not to sprain your ass getting out of your BMW.

Interestingly enough I recently saw some outsourcing company say something along the lines of "future contracts will contain language allowing contracts to be renegotiated if laws are put in place restricting off-shore outsourcing." A lot of people are making a lot of noise about it right now, and it's an election year. I think there's a high level of concern, one might even say alarm about the political attention off-shore outsourcing is getting. Damn I wish I could remember where I read that...

and the Indian educational system is good? (5, Informative)

deadmongrel (621467) | more than 10 years ago | (#9027975)

Honestly I don't how the US educational system is but blaming it for moving jobs oversees is ridiculous. Are they saying the Indian(which i can speak for) educational system is better? India has a poor educational system. And they are finding fault with US education system? Before the flames start let me tell you something I am Indian and have survived the Indian Educational system. We have really few "good teachers" and a lot of good-for-nothing ones. The text books are outdated and so are the teaching tools. The education system is more about memorizing stuff than understanding it. Most of the exams results are like gambling. Nothing but luck.

$ which shutdown (0)

Anonymous Coward | more than 10 years ago | (#9027980)

alias shutdown='sudo /sbin/shutdown -h now'

Bye folks, this whining about outsourcing is fucking boring.

$ shutdown

From what I've seen (0)

Anonymous Coward | more than 10 years ago | (#9027983)

For some that I know 'good job', refers to the jobs that come to where they are located and are in the few areas that they find intellectually stimulating and involve no customer interaction and pay well. For others, they will relocate, work with customers, perform mind-numbing work, and accept junior pay if it can lead to better pay/consulting bucks. Both groups see the job market totally differently. Sometimes you have to do the changing, not the economy.

Government help (0)

Anonymous Coward | more than 10 years ago | (#9027985)

How is it the government's place to tell a someone how to run their business?

Should the goverment force people to buy the most expensive product in the grocery store?

Will the government start banning industrial automation because it takes away jobs from people???

Guess what ..if nobody wants to hire you ..it's cause you suck .. don't go running to the govt. begging them to FORCE someone to hire you.

Why should businesses be forced to hire people ..anybody .. in the first place? And why can't they get the best deal ... why do businesses have so many obligations thrust upon them?

I'm sorry .. blaming somebody else cause you cant find a job is silly .. other poeople don't have any obligations to hire you.

If a business wants to cheaply manufacture offshore so be it.

The so called "slave labor" excuse for blocking free trade is dumb for IT. The slave labor in India argument is nothing more than a faux self made justification for one to keep their own job.

Workers in IT in India do not get abused aside from maybe some very very rare cases that. They certainly get better benefits and medical compared to being unemployed and starving.

Also, there is no such thing as a fixed amount of money in the world .. there can be enough for everybody .. if the fixed wealth argument were true .. there would be less wealth and less percentage of employed people in the world. Cause guess what 500 years ago there were only 500 million people in the world ..and many many people were living like shit and jobless ... now there are billions of EMPLOYED people living happy fulling lives. Dont you think free trade has helped .. if trade takes away jobsd .. then why not make every city an isolated system .. taht would be the best thing wouldnt it? I mean now you have jobs for everyone in the city .. why trade with the whole country? You wouldnt want my job going to some guy in a small town in Iowa would you?

Anyway .. in the end capital is stored in US banks, and this capital is used to give out loans etc. If people cant pay it back .. too bad for the rich. More than likely people will use the capital to create more enterprises. Learn some economics. Also, americans will have access to cheaper products. Unemployment will never be high in a free market economy because even the fat rich people believe it or not will still want services and to grow their wealth.

Competitive (1)

JakiChan (141719) | more than 10 years ago | (#9028001)

His basketball comment really pisses me off. It's like he's saying that the US engineers could compete with those in China if they wanted to. And yes, they could take those wages I suppose...

But why does no one blame the car mechanic who charges $75/hr, the construction worker with the six figure salary, or the $500,000/yr doctor? Engineers in the US can't work for China-like salaries unless everyone else here does as well.

spends billions of dollars on new 64 architecture (2, Insightful)

Anonymous Coward | more than 10 years ago | (#9028002)

... and can't get it to work. So he blames the American educational system.

The most obvious change involves the loss of IT jobs. Many have gone abroad, and they aren't coming back. Offshore outsourcing as a percentage of IT budgets went from 12% in 2000 to 28% in 2003, according to Forrester Research. The U.S. Bureau of Labor Statistics estimates that there are now 212,000 unemployed computer and mathematics professionals. No doubt the number would be even higher but for the IT workers who have given up and moved on to different careers.

Fewer students are opting for computer science degrees as more corporate recruiters skip college campuses.

So? This guy blames Americans first. Some small competitor, AMD, upstages this guy with a better 64-bit architecture and he's whining about American college kids.

Sounds like a "management vision" problem to me. The problem is in Craig Barrett's mirror, if he'd just look. Maybe Intel shareholders should outsource him.

... continue with the executive suite ... (2, Insightful)

seven of five (578993) | more than 10 years ago | (#9028006)

When the boards of directors discover that Indian MBA's are as good as any this guy's ass is grass. They'll sell the fancy building, rent a PO box in a prestigious town, bump profits to an all-time high. Outsource everything except ownership of the brand. Investors happy.

Western Civilization Is the Walking Dead (4, Interesting)

Baldrson (78598) | more than 10 years ago | (#9028014)

Outsourcing is, indeed, a "Bogeyman" but not because, as the article claims, the problems are fabrications of disgruntled spoiled brats and pandering politicians and press.

The problems are real -- and are far far worse than anyone is willing to admit. "Outsourcing" is merely a symptom. Like the first purple patch appearing on the skin of an airline attendant who frequents gay bath-houses in the early 1980s, the worst is yet to come.

Western civilization is destined to become a museum piece. The fundamental problem is with the way Western Civilization has decided to monetize clan structures, raising the floor on the cost of living, while it takes the deracinated clans and moves them into a pseudo-clan identity via national defense and police protection of monetized assets. Western civilization is now addicted to this con-game and can't allow people to reconstitute their clan structures lest they realize how horrendous the crime has been committed against them, and through them in their dracinated state, others around the world. So the only hope Western civilization has is to go all the way to a single tax on net assets or something similar. Of course, the con of the present situation is that wealthy people claim that they're creating the wealth when in fact they're sucking the lives out of young families from which they draw their soldiers and policemen to protect their assets. Charming charming folks... so charming many if not most have charmed themselves into a state where they actually believe their own material. If so, there is no hope for Western civilization. However, if they merely would stop sapping the life from the planet and live among others -- keeping the wealth they've ill-gotten but paying the costs of its maintanence -- they might be able to stave off hell-on-earth for themselves and their posterity (not to mention the rest of us life forms around them since our "bodies are in vain" according to their beliefs -- we don't count).

A few K5 diary entries that discuss the general situation follow:

A [kuro5hin.org]
dozen [kuro5hin.org]
K5 [kuro5hin.org]
diary [kuro5hin.org]
entries [kuro5hin.org]
that [kuro5hin.org]
discuss [kuro5hin.org]
the [kuro5hin.org]
general [kuro5hin.org]
situation [kuro5hin.org]
are [kuro5hin.org]
linked [kuro5hin.org]

Nor should he (4, Insightful)

prisoner-of-enigma (535770) | more than 10 years ago | (#9028016)

but have no guarantees of good jobs when they graduate, Barrett remarks 'I don't have a solution to that one.'"

"Guarantees" of a good job? Give me a break! Nobody is guaranteed anything in life, nor should they be.

Look, I got laid off by the dot com crash three years ago and it took me nearly a year to find new work. Did I whine and moan about how I should've been "guaranteed" a good job? No! I made the choice to leave a larger, slower company to join a smaller, faster one with an eye towards more money and rapid advancement. When it came to a halt, I had no one to blame but myself. Nobody put a gun to my head and said "hey, leave this stable job for a riskier one!"

For that matter, these college grads who are complaining about poor job prospects should think for a moment (something college, of course, consistently discourages in graduates). Um, who put a gun to their heads and forced them to become Computer Science majors? Answer: NOBODY. It might have seemed a good choice four years ago when things were still kinda booming, but thems the breaks. Sometimes you do everything right and you still fail. That is not a lack of a guarantee, that is life. I know that's a radically uncomfortable concept for a twentysomething college grad, but they'd better get used to it.

As for outsourcing, I'm all for it if it makes financial sense for the company. We as consumers benefit from outsourcing in the form of lower prices. If price savings aren't carried over to consumers, we can still benefit from increased corporate profit margins by becoming stockholders in that company. Regardless, companies have no law preventing them from outsourcing, and any such law would very likely be unconstitutional in the first place.

Quit whining about outsourcing and start looking for ways you can benefit from it. It will require effort, intelligence, judgement skills, and hard work, so it's likely college grads will be totally out of their element. But it's better to get started early on understanding how life works instead of living in the fantasy world of college for an extended period of time. If you fail a course in life, rarely is there a makeup test.
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