The problem of outsourcing: what should be done?

[MrBaggins]

Originally posted by monkspider

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?

Yep. The US isn't going to take the loss of service industry jobs laying down.

Globalization helps the people in the world who need it the most, and that is what is important.

Speak for yourself.

I'd put my family, city, nation before those in other countries.

Charity begins at home.

[yavoon]

Originally posted by 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!

most of the success stories in thedeveloping world of the past 50 years practice things like mercantilism and protectionism. obviously both uber free trade ideals....

[Ned]

Originally posted by MrBaggins


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.

Why only US companies? Why give a huge advantage to foreign companies who do not have to pay the tax?

[MrBaggins]

Originally posted by Ned


Why only US companies? Why give a huge advantage to foreign companies who do not have to pay the tax?

What competition? In software? telecomms? networking? finance? insurance?

New foreign companies simply couldn't enter these markets either because they require native US corporations, which would be subject to the taxation (telecomms, finance, insurance,) or they would be crushed on attempting to enter the market (networking, software.)

[Kidicious]

Originally posted by 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.

Time to start practicing your bootstepping Ned.

[Kidicious]

Originally posted by Ned
Kid, I am still looking for details on this new "tax."

Wrong thread I assume.

[Kidicious]

Originally posted by 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

When janitors are in this list there's real trouble. I don't think there are enough toilets for everyone to clean, and I don't think there will be enough in the future.

[Imran Siddiqui]

Productivity is only half of the equation. Cost is the other half.

In actuality, productivity is MUCH more than half of the equation. Many jobs today are being outsourced because Indian IT workers are just as productive, IF NOT MORE! You can see it in the US. Indian workers immigrate to the US and outperform Americans. India is building a powerhouse of young engineers and tech-heads. It only makes sense that tech companies are outsourcing there.

Americans are just not realizing that there are some people out there that are just as productive as us. Sure, in the labor intensive industries, such as making shoes, etc, outsourcing is done mostly because of cost. But this anti-India BS is without much merit. We don't have the edge in productivity in those fields.

threaten to close our doors unless they start buying from us.

Yeah, like that'll work . Sounds like what happened before the Great Depression. They make cheap stuff that Americans like to buy and we blame them? Free trade has brought nothing but prosperity to the US. I mean just look at where we have come from 1900 compared to other countries who have not embraced free trade.

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.

Indeed... of course I end up in a different position than you do . This is the goal of neo-liberalism. It is an ideology based on internationalism and going beyond national borders.

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.)

Like I've said productivity matters. Microsoft's HQ is still in the US, isn't it? Jobs will move to India where they are productive. For example, customer service productivity ain't that different if the people are in the US or in India.

[Q Classic]

i don't really see it as a "problem"...

[gunkulator]

Originally posted by Imran Siddiqui
In actuality, productivity is MUCH more than half of the equation.

Rubbish. It's hard to measure productivity in fields like engineering, while cost is a no-brainer. Management will always go with a sure thing like saving money given the choice. In any case, I'll rephrase what I said earlier: As long as they are no worse than 8 times as slow, the bottom line will still come out positive.

Many jobs today are being outsourced because Indian IT workers are just as productive, IF NOT MORE!

You've got to be joking. Even talk to an Indian IT worker over the phone? Half the conversation is trying to get past the language barrier. I work with several Indians and they are always being asked to repeat themselves. It's a productivity nightmare.

You can see it in the US. Indian workers immigrate to the US and outperform Americans. India is building a powerhouse of young engineers and tech-heads. It only makes sense that tech companies are outsourcing there.

In my experience, Indians are no more or less productive than Americans - in America. That being said, there are serious inefficiencies with overseas outsourcing: language, timezones, haggling over technical specifications over the phone instead of face to face. Why put up with the hassle at all? Answer:$$$$$

Americans are just not realizing that there are some people out there that are just as productive as us.

Fine, however, what are 280 million Americans and their elected gov't supposed to do about it? Sit back and watch 1 billion Indians and 1 billion Chinese flood the global market with dirt cheap labor, enriching a few elites but otherwise causing mass unemployment? Look at my above posting of job growth areas in the US. We're talking serious wage depression here. You scream that protectionism will kill our economy. I say it's headed there anyway.

"Capitalists are so hungry for profits that they will sell us the rope to hang them with" - attributed to Lenin

[Imran Siddiqui]

It's hard to measure productivity in fields like engineering, while cost is a no-brainer.

Actually it really isn't. Productivity is a little bit more difficult than cost, but not much so.

You've got to be joking. Even talk to an Indian IT worker over the phone? Half the conversation is trying to get past the language barrier. I work with several Indians and they are always being asked to repeat themselves. It's a productivity nightmare.

Actually yes. They handled my problem with amazing speed. I was glad I wasn't talking to an American about it, who wouldn't have given a **** about my problem.

Indians are no more or less productive than Americans - in America.

I disagree totally. I see an incredible amount of Indians in the US who have high level jobs in engineering beacuse they work hard and are good at it. Hell, my father is an example of that.

haggling over technical specifications over the phone instead of face to face.

Yes, I'm sure Dell would send a person to MY DOOR when I had a question. Nope, not likely.

Sit back and watch 1 billion Indians and 1 billion Chinese flood the global market with dirt cheap labor, enriching a few elites but otherwise causing mass unemployment?

Which mass unemployment are you talking about? The 5.6% (or whatever it is)? Ain't a big deal.

Look at my above posting of job growth areas in the US.

From your own link:

Other occupations expected to see rapid growth include medical assistants, network analysts, computer software engineers and fitness trainers. The fastest wage growth is expected in the software, management consulting and elderly care industries.

Just because service jobs are experiencing amazing growth rates doesn't mean everything else isn't growing. What about the growth rates for other jobs?

Sorry this "Chicken Little" ain't gonna cut it... again.

[Ned]

Originally posted by MrBaggins


What competition? In software? telecomms? networking? finance? insurance?

New foreign companies simply couldn't enter these markets either because they require native US corporations, which would be subject to the taxation (telecomms, finance, insurance,) or they would be crushed on attempting to enter the market (networking, software.)

So now your are going to make distinctions based upon kind of industry?

[gunkulator]

Originally posted by Imran Siddiqui

Actually it really isn't. Productivity is a little bit more difficult than cost, but not much so.

In my experience it is significantly harder. What metrics do you use to measure it? How do you factor in design complexity and maintainability for example.

Actually yes. They handled my problem with amazing speed. I was glad I wasn't talking to an American about it, who wouldn't have given a **** about my problem.

My experience is 180 degrees the opposite. While I've had OK tech support from foreigners when they are clearly just reading off a trouble-shooting sheet, trying to discuss real technical issues with an Indian over the phone is frustrating.

I disagree totally.

Fine, however I just don't see it with those I work with.

Yes, I'm sure Dell would send a person to MY DOOR when I had a question. Nope, not likely.

I'm talking about outsourcing of engineering here, not some guy telling me to update my drivers and reboot my computer over the phone. There's a vast difference. Any reasonably complex engineering job requires significant give and take with spec writers, management, customers and end users. When the engineers are in India and everyone else is here, outsourcing is simply inefficient. But it's so cheap that management is happy to overlook the lower productivity.

Which mass unemployment are you talking about? The 5.6% (or whatever it is)? Ain't a big deal.

When a tech worker has to take a low paying dead-end job in retail, the overall economy suffers. Unemployment statistics don't tell the story of wage depression and underemployment.

Just because service jobs are experiencing amazing growth rates doesn't mean everything else isn't growing. What about the growth rates for other jobs?

I don't consider a high rate of job growth for janitors and food industry workers to be a sign of economic health. The growth of the health care industry is a demographic anomaly of Baby Boomers retiring. The wages for these workers are eventually paid by Medicare, which just means higher and higher gov't deficits. Again, not a sign of economic health.

In the long run, economic theory tells us that we will all level out again - whatever "level" that may be - however in the short run we have a new phenomenon in the world: 2 billion workers suddenly added to our labor pool in an economy that has never supported even 1/4 of this number. This isn't the 80s when 100 million Japanese suddenly arrived on the scene. This is 20 times that number. Is our economy strong enough to absorb all these workers without massive wage depression?

[Ned]

Originally posted by Kidicious




Time to start practicing your bootstepping Ned.

So Kid, Kerry is not going to introduce protectionism? I most of the people here think that he will.

[Ned]

On the Lou Dobbs program last night, one of the outsourcers said that Indian software was a better quality than US software. Indian software had a quality of four or five based upon a standard method of determining software quality, but US software was 1-2 on the same scale.

Lou was flabbergasted and had nothing to say.

[gunkulator]

Sorry, Ned. CMM quality levels are usually bogus.

[Lawrence of Arabia]

dont worry. you dont agree with bush, you agree with bush's advisors. bush doesnt have a clue of what hes talking about.

[sprucemoose3311]

Outsourcing is here until the transnational corporate system fails.

the student store at my college (in the so called liberal bay area) was found to be selling hats made by children in bangladesh who were being paid 7cents a day working 14hrs./7 days and unpaid overtime, sleeping next to the sewing machine they worked and, and only being fed rice, etc...

the price of hats droppped 5 dollars, no one cared anymore

[Shi Huangdi]

I also have friends who have done work in the tech sector; they tell me there are usually severe problems in outsourcing code writing to India, they tend to produce poor quality code and it costs quite a bit to fix up their poor work. I believe Rah has posted about similiar experiences in his office.

[Kidicious]

Originally posted by Ned


So Kid, Kerry is not going to introduce protectionism? I most of the people here think that he will.

I don't know. It depends how fast conditions change during the next term. By the middle or end of his term he may raise trade barriers if there is pressure on him. Of course, Bush will do the same thing if he is elected.

[Shi Huangdi]

"Which mass unemployment are you talking about? The 5.6% (or whatever it is)? Ain't a big deal."

Bear in mind that figure doesn't include the mass of discouraged workers, who if included reveal a much more troubling picture.

"In actuality, productivity is MUCH more than half of the equation. Many jobs today are being outsourced because Indian IT workers are just as productive, IF NOT MORE! You can see it in the US. Indian workers immigrate to the US and outperform Americans. India is building a powerhouse of young engineers and tech-heads. It only makes sense that tech companies are outsourcing there"

Well for one Imran, you have a coordiantion failure here. New people aren't going to be attracted to engineering and tech jobs if the sector is being eaten up by foreign competition and the market is declining. But moreover, Asia has a different culture then we do, one that obsesss over studying, where studying goes on for 12 hours a day and are rediculously overworked, where suicide rates go up because of the extreme amount of stress involved. Boshko or MtG can tell you about that education system there. Americans are overworked already and I don't want us to get to the level of paucity of leisure that Asia has.

[Ned]

I listened to the debates and it seemed to me that all the Democrats, save Lieberman, were promising some form of "fair trade," which means protectionism. I remember that Gephardt was criticizing the others for joining the protectionist bandwagon late because he had always opposed NAFTA.

Well still, Kerry has changed his position before. He may well have taken a "fair trade" position during the debates and now may have taken a "free trade" position in the general election. His supporters don't seem to notice these things. "Anybody but Bush!" and all that.

[Az]

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?

That's not what I am proposing. labour costs will NOT have to be as high as they are in the US, but the factories there will have to meet certain criteria. It's in no way linear.

[Ned]

Azazel, I am just trying to figure out your enforcement mechansim.

For example, would it make any difference who owns the business that makes the widget that is being sold to the United States or Israel? If the company is owned by a local entity and not by Israel or by United States, would they too be subject to some kind of tax or tarriff?

[Ned]

Shi, how are you going to stop the Asians from competing?

[Lawrence of Arabia]

fair trade is such a load of crap. fair for whom? i guess that means that now we're all gonna have to pay more for basic products, just for the sake of highly organized, unproductive, american workers.

[Ned]

Lawrence, you nailed it. There is a basic difference between the parties. One is pro business, believing the health of businesses inherently produces higher wages and more employment. The other is pro labor, believing that business grow money on trees to pay workers more for less.

The majority here on Apolyton seem to back labor and John Kerry.

[MrBaggins]

Originally posted by Ned
So now your are going to make distinctions based upon kind of industry?

Yes, because these are the typical outsourced industries. Why would we be discussing others?

[Ned]

Mr. Baggins,This whole argument then is completely disingenuous as jobs of all kinds had been moving out of the United States and the industrialized world to second and third-world countries for decades due to cost considerations. Why do only certain American's deserve protection? Why would you protect back-office clerks and not steelworkers. Why would you protect programmers and not printed circuit board assembly workers? Why would you protect computer support personnel and not computer assemblers?

[Ned]

It also makes my blood boil that the pro-Kerry types seem to assert that businesses are evil because they do everything possible to reduce costs in order to compete. This is trash and everybody knows it.