The problem of outsourcing: what should be done?

[MrBaggins]

are you hard of reading, Ned?

Taxes are an internal matter, thus aren't subject to WTO rules, and can encourage companies to have different practices... while not preventing their doing business with the government.

[Ned]

Originally posted by 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...

Renegotiate NAFTA and WTO? To eliminate the very reason for their existence? Who would go along with that where in effect trade was "free" only for the US.

No one.

As to taxes, these would be no different in effect than tarriffs. You would be taxing foreign trade. That is a tarriff.

[Ned]

Originally posted by MrBaggins
are you hard of reading, Ned?

Taxes are an internal matter, thus aren't subject to WTO rules, and can encourage companies to have different practices... while not preventing their doing business with the government.

Mr.Baggins, I will give you a chance to explain yourself. Tell me what you had in mind.

[MrBaggins]

Originally posted by Ned
Renegotiate NAFTA and WTO? To eliminate the very reason for their existence? Who would go along with that where in effect trade was "free" only for the US.

No one.

Except the world still wants to trade with the US...

If its become inherently unfair, and disadvantageous to the US, and the US retains a certain degree of power, then it should consider renegotiation.

As to taxes, these would be no different in effect than tarriffs. You would be taxing foreign trade. That is a tarriff.

A "tarriff" that couldn't be deemed illegal by the EU, or any other nation, however... and there is the critical difference.

[MrBaggins]

Originally posted by Ned
Mr.Baggins, I will give you a chance to explain yourself. Tell me what you had in mind.

Essentially taxing corportations that internationally outsource... with exceptions. Make outsourcing to India cost more... for example.

[Kropotkin]

Hold your horses! Didn't the WTO give the EU right to raise penalty tarriffs against the US because certain tax-cuts for companies like Microsoft and Boeing was seen as unfair subsidies a few weeks ago? Or did I missunderstand something?

[gjramsey]

Essentially taxing corportations that internationally outsource... with exceptions. Make outsourcing to India cost more... for example.

Mr. Baggins, what would you do for large corporations that have offices in many countries that just move the jobs to places like India? It is not necessarily out-sourcing now, it is more off-shoring, but the end result is still lost jobs in the US. Many major corporations are doing this now-a-days, including some of your mentioned software companies.

[gunkulator]

Originally posted by Imran Siddiqui


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.

Productivity is only half of the equation. Cost is the other half. As I once heard it described: "They're 1/8 the cost and we're not 8 times as good".

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.

To do what? In the end we are just plain too expensive for TPTB to even bother with us. It's one thing when a manufacturing job that takes a few days to learn gets shipped overseas. It's quite another thing when someone with a 4-year degree and massive college debt can't find a job in his field of training.

A capitalist is quick to blame the individual but really, what crystal ball can you look in nowadays and see the future job market? Will we still need engineers, accountants, graphic artists or financial analysists four years from now, or will all those firms have packed up and left by then? All the best education is the world means nothing when there's no work so education alone is not the answer. To compete with India and China, we need to race to the bottom, give up our standard of living and revert to living in a polluted environment and subsistant poverty. Hooray for pure capitalism!

An interesting site re this: http://www.yourjobisgoingtoindia.com/

[Whoha]

Originally posted by Vanguard
Step 1. Value added tax

Step 2. Single Payer Health Care, Eliminate Payroll taxes

Step 3. Enjoy the benefits of free trade

you mean double digit unemployment like the Europeans, sounds like fun.

[MrBaggins]

Originally posted by Kropotkin
Hold your horses! Didn't the WTO give the EU right to raise penalty tarriffs against the US because certain tax-cuts for companies like Microsoft and Boeing was seen as unfair subsidies a few weeks ago? Or did I missunderstand something?

"Service" trade is under discussion by, but not covered by the WTO... thus they can't rule on taxes in pure employment based instances.

[MrBaggins]

Originally posted by gjramsey


Mr. Baggins, what would you do for large corporations that have offices in many countries that just move the jobs to places like India? It is not necessarily out-sourcing now, it is more off-shoring, but the end result is still lost jobs in the US. Many major corporations are doing this now-a-days, including some of your mentioned software companies.

Make those jobs... in certain designated countries...more costly, through taxation.

[yavoon]

Originally posted by Imran Siddiqui

Quote:

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.

complete crap. outsourcing is a result of wage differential. not some enormous educational gap.

[gunkulator]

So where are the future jobs? According to
http://www.msnbc.msn.com/id/4499315/, the job markets experiencing growth are (job, projected growth, % growth, median income):

Registered nurses 623,000 27% $48,090
Postsecondary teachers 603,000 38% $49,040
Retail sales 596,000 15% $17,700
Customer service 460,000 24% $26,240
Food prep 454,000 24% $16,328
Cashiers 454,000 13% $15,413
Janitors 414,000 18% $18,250
General managers 376,000 18% $68,210
Wait staff 367,000 18% $14,144
Nursing aides 343,000 25% $19,947

Moral of the story: If you want a job in this new global economy, quit school - it's no longer worth it.

edit: screwed up the url tags

[gjramsey]

Make those jobs... in certain designated countries...more costly, through taxation.

And how much do you tax? If the same job can be done overseas for 1/10th of the price as the person in the US, the company would still be will to pay the extra tax, and the cheaper employee overseas.

I think there is not an easy answer to this issue. Companies are in busy to make a profit, and pay the dividends to the stock holders. Moving jobs to cheaper locations is only natural to cut costs. I am sure that many of us hold stock in companies, and we would moan and groan if the profits for the companies do not keep increasing like they have been. Or moan and groan when the stock drops because the forecasted numbers were not met.

[Whoha]

Originally posted by Imran Siddiqui

Quote:

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.

ono, they might slap even more penalty tariffs/non-tariff barriers/investigations then they already have placed on us which are resulting in a 600 BILLION dollar trade deficit. The reason outsourcing/offshoring is going on is that these countries are running mercantilist economies and they say build it here or don't sell it here(meanwhile they can ship it to the US no problem). Not this bogus "our kids aren't smart enough/we don't want to do some jobs" crap(I guess the millions of tech workers here in the US that were laid off and were apparently smart enough to do the job between 93 and 2000 got dumb all of the sudden or something). We can NOT sustain the trade deficit, something has to give, the economy(which it looks like is the case considering the debt/fall of the dollar to date), or the one way trade deals.

I like how you bring Europe into this, considering that they just levied tariffs on us for our own tax code. I especially like it that you use the few trade agreements we have that aren't total ****jobs to justify all the other ones which are.

We are going to have to go to say... China(130 BILLION dollar trade deficit this year) and threaten to close our doors unless they start buying from us. Unless you think that they will start buying from us out of the goodness of their hearts.

[Kropotkin]

Not if the the education would increase the productivity of the workforce. If the superiority in productivity is as lage (or larger) than the wage differential, there's hardly any reason to outsource. From the employers point of view it's not the wage of the individual worker that matters so much as how much profit he can gain from each monetary unit paid on wages.

[MrBaggins]

Originally posted by gjramsey


And how much do you tax? If the same job can be done overseas for 1/10th of the price as the person in the US, the company would still be will to pay the extra tax, and the cheaper employee overseas.

You just squeeze "'til the pip squeaks"

Extra US expenses will be very clear to US companies, and US shareholders. Especially if you explain what the taxes are for, and why they'll be going up again... given a certain situation.

[MrBaggins]

Originally posted by Kropotkin
Not if the the education would increase the productivity of the workforce. If the superiority in productivity is as lage (or larger) than the wage differential, there's hardly any reason to outsource. From the employers point of view it's not the wage of the individual worker that matters so much as how much profit he can gain from each monetary unit paid on wages.

The US could never compete with, say, Indian wages, because the basic cost of living is much... much lower there (as are general standards of living.)

To compete, our general standard of living would have to take a significant nose dive.

[Az]

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.

That's your opinion. I think that the problems in Israel and in the US are similar in the case of outsourcing.

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?

You still get cheaper goods, thus increasing your lifestyle.

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

What's the leeching? If you don't want, don't buy their products. All I am saying that they deserve to make a living in dignity.

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.

So "free trade" is just a slogan to open markets to US products and not vice versa. Gee, that's like classic imperialism.

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?

I don't tell that to a country like India, I tell it to a the companies working there. If you want to do trade with us, you gotta be fair to your workers there, and not screw up their enviroment. that's the way enviromental regulation works here, and that's the way it should there.

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.

Are you being deliberately stupid? I am not saying that everyone's sallary must be raised to 1st world levels, but the salary of the workers of the companies that trade with us (the west) must be raised to more fair levels. When those will have more money to spend, they'll naturally raise salaries throughout India, with higher demand for services for them.


Of course, you can go another way around. Raise taxes to pay for welfare, and entertainment for the unemployed, or watch social unrest brew.

[Ned]

Originally posted by MrBaggins


Essentially taxing corportations that internationally outsource... with exceptions. Make outsourcing to India cost more... for example.

I'm sorry, but without details, this is meaningless.

[Ned]

Azazel, what you propose is in essence a tarriff that is inversely proportional to the labor costs to make it in foreign lands.

How does a customs agent make a determination on widget he sees in front of him what the person making the widget was paid?

[MrBaggins]

Originally posted by Azazel
You still get cheaper goods, thus increasing your lifestyle.

Which the US population can afford less of because that high paying job got moved to India... plus the money left the US financial cycle... destroying other jobs.

Any cost saving in cheaper goods is not nearly enough to make up for these losses.

What's the leeching? If you don't want, don't buy their products. All I am saying that they deserve to make a living in dignity.

Not at the expense of a US job. The US certainly doesn't owe these people jobs. Thats their countries and governments business, just as US jobs are the US' and US government's business.

So "free trade" is just a slogan to open markets to US products and not vice versa. Gee, that's like classic imperialism.

And? thats bad... how?

If the US can do this... why shouldn't they? India can raise taxes on Indian corporate employment in the US, if they wished to, in response.

*SNIP*

Are you being deliberately stupid? I am not saying that everyone's sallary must be raised to 1st world levels, but the salary of the workers of the companies that trade with us (the west) must be raised to more fair levels. When those will have more money to spend, they'll naturally raise salaries throughout India, with higher demand for services for them.

Of course, you can go another way around. Raise taxes to pay for welfare, and entertainment for the unemployed, or watch social unrest brew.

If those tech salaries were raised to those levels, then there would be no incentive to outsourcing/offshoring, and the problem would just vanish.

Did you have an actual point with this?

[monkspider]

Globalization is bringing about a great deal of "leveling" to the world community. People who fight against it so fiercely seem to forget that it is bringing about increased standards of living in many third world countries. Globalization is tearing down the idea of arbitrary national borders and is destroying the age-old "us and them" mentality that has dominated the mindset of so many of us.

The neo-liberal free trade policies that we have witnessed are bringing us closer and closer to long sought-after dream of global brotherhood. It is really a very socialist phenomena when you look at it from that perspective. While first-world corporations have experienced a sharp increase in profits from these policies, eventually they will fall to the coming revolution, due to a dramatic decline in their largest markets thanks to decreased employment and automation and a general increase in consciousness.

While globalization is not very good for the pocketbook of your average first-world citizen, given the outrageous affluence that we have lived in for the past fifty years, is that really something to be mourned? Globalization helps the people in the world who need it the most, and that is what is important.
Long live free-trade! Long live Socialism! Long live the revolution!

[MrBaggins]

Originally posted by Ned


I'm sorry, but without details, this is meaningless.

I don't have the specific numbers to hand, but I'd tax corporations on a flat per-person basis, non-retroactively... and raise it until it had the desired effect.

I'd have different rates for different countries, and none for countries with roughly equivalent wage standards.

[Ned]

Kid, I am still looking for details on this new "tax."

Azazel would like to impose tarriffs on widgets according to the labor cost to produce them. This would hard to do. But, it would also make cheats extremely wealthy.

[Ned]

Originally posted by MrBaggins


I don't have the specific numbers to hand, but I'd tax corporations on a flat per-person basis, non-retroactively... and raise it until it had the desired effect.

I'd have different rates for different countries, and none for countries with roughly equivalent wage standards.

What do you mean by "per person" tax?

Hypo:

Car mfg. makes car in India. Car mfg. sells car to Chinese distributor. Chinese distributor imports it to America and sells it to US distributor. Distributor sells it to dealer, who sells it to customer.

Who is taxed and for what employees?

[The Templar]

Originally posted by Adam Smith

So we can have a Smoot-Hawley situation which contributed to the Great Depression?

All pulling out of the treaties will do is give us wiggle room. I'm not talking about immediately stopping all trade. But it would be nice to be able to ban MBTE (a carcenogen that collects in the water table) without getting sued under NAFTA ch.11.

Environmental and labor standards vary with income, and we're imposing ouors on them. Shouldn't you be screaming "economic imperialism" at about this point?

clean air != economic imperialism
human rights (vis-a-vis labor) != economic imperialism

Why do conservatives only care about economic imperialism when things important to normal people are at stake? But if the IMF wants to liberalize a captial market against the will of a sovereign people that's OK?

Unions are labor monopolies. Monopolies reduce overall national income.

So workers should not be able to bargain collectively in order to achieve pairity of bargaining power with management? This is the threshold question before any economic questions are relevant.

Unions are not labor monopolies since (a) there is usually more than one union per occupational area (even if not in the same shop), and (b) not all workers join unions.

By this reasoning tying should be legal, so there is no such thing as the Microsoft antitrust case.

That assumes that labor and venture capital are the same. They are not, so different analyses may apply.

Well, one out of six ain't bad.

Not likely.

None of it's likely - at least until the middle class disappears. But then something more extreme will likely happen.

[MrBaggins]

Originally posted by Ned
What do you mean by "per person" tax?

A tax payable by a US company who pays a foreign company, which provides a service to US consumers on behalf of, or for related business products of that US company, for each employee, direct or subcontracted, of the foreign company.

The actual amount would vary by country.

These services could be, for instance, technical support or telemarketing.

[Ned]

What we are seeing here is extremism in the first order by the pro Kerry camp. This kind of thinking is enormously dangerous for the world. Anyone who truly supports ending international trade has simply got to be wilfully malicious and hateful of business.

Kerry is a menance to everyone.

[dainbramage20]

Originally posted by chegitz guevara


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