The problem of outsourcing: what should be done?

[Spiffor]

Originally posted by Ned
The bottom line, this "outsourcing" issue is pure demogoguery, mostly designed to get Republicans out of power. Anyone with half a brain can smell a rat here.

Depends. For the people genuinely oppsed to free trade, it isn't.

[Chemical Ollie]

There is nothing wrong with outsourcing, except that it moves from country to country like locust, leaving shut-down plants in it's path. One example is the clothing industry. 40-50 years ago, we had some prospering clothing factories in West Sweden, but then someone found out it was cheaper to produce the same clothing in Italy. But that didn't last long, and now clothing is made in places like Pakistan and Vietnam. And when those countries becomes more prosperous and demand higher living standard, where will the industry move? Sudan and Somalia? In any case, some people who were extremely poor will get a better life, and we will get cheap goods.

[MrBaggins]

Originally posted by Shi Huangdi
And there is of course the problem that if we did encourage more expensive US labor to be used when third world labor could be used, and other first world countries use third world labor, we risk that they get an advantage over us. So what do you guys think, if anything, should be done about this?

This certainly isn't an issue, since, at least in terms of the software industry, there is no competition, and the US software industry has significant enough market share that they could crush upstarts... not to mention the fact that the major software companies in each of the other first world countries are subsidiaries of US software companies.

Competitiveness is no issue at all in software, this is all a chase for profits, in that case.

As for the argument about it being beneficial in the first place, I'd just mention that there is more to the issue than profit and loss... namely the fact that the dollar still exists after its been paid to the worker.

If you pay a US worker, then its taxed, and spent, in a cycle. This creates more US jobs.

If its paid to a foreign worker... then its effectively lost from the system.

In a system with no competition... the software market and the tech support market (for US businesses,) what sense does it make to outsource, pragmatically? You're typically not only putting one person out of a job... you're putting two or three out, for a reasonably well paid guy.

[Kropotkin]

Originally posted by Chemical Ollie
40-50 years ago, we had some prospering clothing factories in West Sweden.

Well yeah, the factories where situated in western Sweden, but the entire workforce was finnish...

[Sava]

Really??? Cut off trade with the second and third world? My God, we should be helping these folks -- foreign investment and business is exactly what these countries need to grow.

yeah, Latin America and Mexico have prospered under the Neo-Liberalist policies

1. Close corporate tax loopholes. Tax companies (or put tariffs on) that reside in tax havens.

2. Reform corporate tax system so that companies that outsource pay more taxes than companies that employ Americans.

3. Offer incentives to create jobs in America... tax credits, etc.

The current leadership doesn't seem to eager to tackle this problem... in fact, they think it's good. So a new president is a legitimate suggestion for reducing outsourcing. But I'll leave it at that.

[dainbramage20]

If this is capitalism. I dont want it. And I dont think 90% of Americans want it. We may have made a huge mistake. Show me to the underground hideout, where the remaining 15 american Socialists gather so I can join.

Im sick of this crap. Kerry is pretty much in favor of outsourcing too, Despite his pre-election rants. And I agree, Bush has got to go unless he stops this now. He has the pulpit to stop it. SO STOP IT

I work for an outsourcing company. We basically manufacture PCB for other companies. But theres rumor a new facility in Malayasia is earmarked in 2005 to begin 'supplementing' what we make

[Kidicious]

Originally posted by Lawrence of Arabia
1. outsourcing isnt a problem
2. therefore, you cant fix it if its not a problem.

*LoA closes his eyes, covers his ears and sings, "LA LA LA LA LA!"

Ummm... It is a problem. Why do you think people are talking about it so much. Maybe it will become a problem for you one day, and you will wonder what the hell happened to your job. Then you will come back here and feel sorry for yourself.

Anyway, we are pretty much screwed. We can't go down this path anymore. It leads to disaster, obviously. Unfortunately, we can't turn around and go back to where we came from either.

[Chemical Ollie]

Bush HAS BEEN trying to stop it, with the steel tariffs. This made me change my previously positive opinion of him, and after that he has only been going downhill in my view. Protectionism is an anti-capitalistic thing, a commie thing!

The steel tariffs has now lead to counter-measures by EU.

[MrBaggins]

Steel tarriffs aren't what most middle class americans are worried about... it'd be the tech service industry job export...

I'd disagree that nothing can be done about it. I think its entirely feasible to discriminate against the cheap cost-of-living-low-living-standard countries, while having normal (actually improved, since there'd be more trade) relations with our regular trading partners.

[Az]

Originally posted by dainbramage20
If this is capitalism. I dont want it. And I dont think 90% of Americans want it. We may have made a huge mistake. Show me to the underground hideout, where the remaining 15 american Socialists gather so I can join.

Im sick of this crap. Kerry is pretty much in favor of outsourcing too, Despite his pre-election rants. And I agree, Bush has got to go unless he stops this now. He has the pulpit to stop it. SO STOP IT

I work for an outsourcing company. We basically manufacture PCB for other companies. But theres rumor a new facility in Malayasia is earmarked in 2005 to begin 'supplementing' what we make

We need more people who think like this.



Outsourcing is NOT a problem. The problem is the crappy conditions that people have to work in in the new companies, and other "deregulation" causes.

I think that what should be done is equalize the enviromental regulation, and require decent (not equal, decent) payment. That way, the workers in the new countries will profit more from the move, and we'll be more safe from the industries moving there fore their own sole profit.

Overall, I think that oursourcing is a positive phenomenon, but 1st world workers are bound to become unhappy at some point, so we ( ) will still have a shot, because the real problem is the wrong distribution of wealth.

[MrBaggins]

Where do you live, Az?

[Whoha]

Originally posted by Shi Huangdi
Recent as you guys all probably know outsourcing has been more and more prominent. The newest figures show the trade deficit at an all time high of $43 billion. We've seen a recovery for a long time now, but still we are not seeing more jobs recovered. In fact, were it not for people giving up looking for work and public sector hirings, the unemployment rate would have risen significantly. There are now more then 400 companies that have labor done overseas, and it seems more and more fields such as accounting and even law jobs are being exported overseas.

The orthodox economic wisdom would be to simply wait for more job to arrive, that it is good if services that can be done more efficiently abroad are done abroad, and that the excess labor can open up new more productive fields. Still it seems worrying, so quickly after manufacturing jobs fled the country and destroyed many well-paying blue collar jobs, more and more service, white-collar, and technical jobs are being sent abroad. Some economists have posited that with the factors of production being more mobile then ever, that production will simply move more and more to where an absolute advantage can be found; which in more and more cases seems to be the third world.

Still, beyond doing nothing, there hasn't been nearly as many proposed solutions to the problem as mentions of it. And there is of course the problem that if we did encourage more expensive US labor to be used when third world labor could be used, and other first world countries use third world labor, we risk that they get an advantage over us. So what do you guys think, if anything, should be done about this?

the US needs to do some things that are going to be labelled protectionist in order to right the hideous trade imbalance in general. As far as outsourcing goes, I think the congress is going to pass a law saying that the federal government won't do business with companies that outsource, but I prefer the more direct solution to the problem myself.

[Az]

Where do you live, Az?

Haifa, Israel.

[MrBaggins]

So you don't live in the country... and are a socialist, to boot.

Your opinion matters in what way, to the discussion on whether the US should change its own policy to become more protectionist?

[Vanguard]

Step 1. Value added tax

Step 2. Single Payer Health Care, Eliminate Payroll taxes

Step 3. Enjoy the benefits of free trade

[chequita guevara]

We should nuke the Indians.

[MrBaggins]

Originally posted by Vanguard
Step 3. Enjoy the benefits of free trade

In New Delhi?

[chequita guevara]

Originally posted by dainbramage20
where the remaining 15 american Socialists gather so I can join.

http://sp-usa.org/

Join today!

[Ned]

If I want software developed, I can do it myself, hire others to do it, or simply buy it from third parties. How can you prevent anyone from hiring companies located outside the United States to do software development or for that matter from simply buying the software from parties outside the United States? There is no way to do this except this shut down trade with the rest of the world.

If I want a widget as a component for my end-user product, I can make it myself, hire others to make it, or buy it from third parties. The question is a same question as in the case of software. How would you prevent me from having the widget made for me outside the United States or from simply buying it from somebody who made it outside the United States? There is no way to do it except to shut down trade with the rest of the world.

Anyone who suggest otherwise has simply got to explain to us how one stops it.

[Az]

Originally posted by MrBaggins
So you don't live in the country... and are a socialist, to boot.

Your opinion matters in what way, to the discussion on whether the US should change its own policy to become more protectionist?

a) Outsourcing is an issue in Israel, as well. I can observe the trends going on here, and make my observations about the phenomenon.

b) The fact that I am socialist DOESN'T MAKE ANY OF MY ARGUMENTS WEAKER. That's a known fallacy. Adress the issues at hand, and reply to my arguments. The same is correct about the fact that I don't live in the USA. My arguments aren't made weaker. I will not be the one influencing the politics, since I am not a voter in US politics. But this doesn't mean that my opinion, and/or arguments don't matter. I still can persuade people in the correctness of my opinion, thus influencing the election.


c) This is an open forum. I am free to make my recommendations as to the policies the USA needs to take. I am interested in the problem because I care about the wellbeing of those people, both in the west, and in the developing countries. If you don't like it, well, frankly you can stuff it.

[Ned]

Originally posted by Chemical Ollie
Bush HAS BEEN trying to stop it, with the steel tariffs. This made me change my previously positive opinion of him, and after that he has only been going downhill in my view. Protectionism is an anti-capitalistic thing, a commie thing!

The steel tariffs has now lead to counter-measures by EU.

You have a point Ollie that Bush did try to keep jobs here in America. But you will NEVER hear anything positive about Bush from any of the American outsourcing fear mongers here. This tells you something about the politics of this from the American point view.

[Kropotkin]

I'm posting a P.S. for Az.:

This does of cource not apply to gojim's addressing the conflict in palestine. That's a well know, self evident, exception.
[/troll]

[Imran Siddiqui]

the US needs to do some things that are going to be labelled protectionist in order to right the hideous trade imbalance in general.

Which are then going to subject to retalitory tariffs from the EU, and perhaps resulting in a trade war, which is good for NO ONE!

Outsourcing is a big deal because some rich white coller stiffs got their jobs sent away. The muffled roar will soon pass away slowly into the night. Skilled worker industries still go to the countries with higher productivity, and that would be where we come in. Hell, though, some Indians are really productive in engineering. Instead of raising tariff borders (which in the end hurt us), we should be trying to get our youth more educuted in math and science.

The reason outsourcing is going on is because, frankly, our kids aren't getting educated well enough. Something happens between elementary school and the end of high school, where our students are horrible in the maths and sciences. THAT is the problem.

[MrBaggins]

Originally posted by Azazel

a) Outsourcing is an issue in Israel, as well. I can observe the trends going on here, and make my observations about the phenomenon.

You care about, however, your situation in Izrael. What you'd like to achieve isn't the same thing as what works for the US public.

Why should we (as in the US) care if workers in new countries get jobs (that were ours,) or if we don't distribute wealth to other countries?

It seems to me abundantly clear that you're of the opinion that the world deserves to leech off the US.

The world will be much better off with a stronger US, trading with its natural trading partners, rather than leaking service industry jobs to third world nations.

[Ned]

Originally posted by Sava
yeah, Latin America and Mexico have prospered under the Neo-Liberalist policies

1. Close corporate tax loopholes. Tax companies (or put tariffs on) that reside in tax havens.

2. Reform corporate tax system so that companies that outsource pay more taxes than companies that employ Americans.

3. Offer incentives to create jobs in America... tax credits, etc.

The current leadership doesn't seem to eager to tackle this problem... in fact, they think it's good. So a new president is a legitimate suggestion for reducing outsourcing. But I'll leave it at that.

Sava, there many conceptual difficulties with your ideas, but the reason no one is doing anything is that there is little that can be done except to raise tarriffs. But Bush did try that with steel. The WTO, at the behest of Kerry's allies in Europe, had them declared illegal.

Next solution?

[MrBaggins]

You can impose new taxes on corporations... since the US has a right to do so, it being an internal matter.

Oh... and you can always reconsider renegotiating NAFTA and WTO membership...

[chequita guevara]

I like Templar's ideas.

[Imran Siddiqui]

You would .

[Ned]

Originally posted by Azazel


We need more people who think like this.



Outsourcing is NOT a problem. The problem is the crappy conditions that people have to work in in the new companies, and other "deregulation" causes.

I think that what should be done is equalize the enviromental regulation, and require decent (not equal, decent) payment. That way, the workers in the new countries will profit more from the move, and we'll be more safe from the industries moving there fore their own sole profit.

How do you do that? How do you tell a country like India that it has to pay workers 100 times more than they do now and on top of that invest billions upon billions in environmental equipment that it does not have and cannot expect to have in 100 years?

If the socialists had this kind of magic wand power they seem to have, why don't we simply raise everyone's salary in Israel and the United States to one million per year, which is the equivalent of what you are asking India to do. On top of that, declare as once did King Authur, a new camelot where it rains only on the King's authroization and there is no polution by edict.

[Ned]

Originally posted by Whoha


the US needs to do some things that are going to be labelled protectionist in order to right the hideous trade imbalance in general. As far as outsourcing goes, I think the congress is going to pass a law saying that the federal government won't do business with companies that outsource, but I prefer the more direct solution to the problem myself.

The Federal Government will have a major problem doing business, then.