The problem of outsourcing: what should be done?

[Urban Ranger]

Originally posted by Ned
They harvest whole fields with very little labor, using gigantic machines that move from farm to farm, from South to North, with the harvest.

And these farming practices are simply not sustainable (in the ecological sense).

[Ned]

Originally posted by Imran Siddiqui
I think a big part of this current cry against outsourcing is mostly racism.

Maybe. What I see are a lot of highly paid programmers and back office types complaining about losing jobs to Indians who on the whole are much better educated and perhaps more intelligent than they are. If that is racism, well, you are right.

[Spiffor]

Originally posted by Imran Siddiqui
I think a big part of this current cry against outsourcing is mostly racism.

I think a big part of this current cry against outsourcing is mostly anger by people who lost their job.

[Whoha]

Originally posted by Ned


Maybe. What I see are a lot of highly paid programmers and back office types complaining about losing jobs to Indians who on the whole are much better educated and perhaps more intelligent than they are. If that is racism, well, you are right.

actually, the IBM stuff that got leaked showed that they cost 1/4th to 1/8th what American Programmers do, not that they are better. The story I'm hearing with people working with them is that they have the same problems we do.

[Imran Siddiqui]

I think a big part of this current cry against outsourcing is mostly anger by people who lost their job.

But when their job moved to the South, you didn't see this outcry, only when it moved to India or China.

[Spiffor]

Originally posted by Imran Siddiqui
But when their job moved to the South, you didn't see this outcry, only when it moved to India or China.

Are you sure of this? Here, we had a serious outcry ten years ago about how industries left for developing countries. I remember plenty of people hated losing their jobs (many of them still haven't found a stable situation since, for lack of re-qualification), but I don't remember many racist undertones to that.

[Imran Siddiqui]

Yes... when jobs move within the country, you don't hear nearly the same outcry. I hear plenty of veiled racism against those Indians or Chinese who will work for pennies a day and aren't nearly as qualified as Americans! To them the Indians can't be even close to as productive, even though Indians come over to the US all the time and end up running large companies and moving up the heirarchy quickly.

[MrBaggins]

National job relocation doesn't hurt the economy the same way as international job relocation. Thats why outsourcing is considered the greater of two evils.

[Kidicious]

Originally posted by Imran Siddiqui
I wonder why people think a transition period will kill the economy, when past transition periods (moving of manufacturing jobs) did not? And internal outsourcing, ie, from region to region in a country isn't decried either. Look at textile workers who lived in New England seeing their jobs moved to the South in the 60s.

I think a big part of this current cry against outsourcing is mostly racism.

There cerainly were problems with moving to service dominated economy. Really though there was a shortage of workers that prevented the economy from making that transition. As women entered the workplace and manufacturing efficiency improved it became possible for the economy to make the transition to service orientation. That's why there were few problems.

Unfortunately, it's nothing more than blind faith to state that there is a shortage of workers and some new sector in the economy right now ready to develope.

[The Templar]

Originally posted by MrBaggins
National job relocation doesn't hurt the economy the same way as international job relocation.

Tell that to the losing region. The fact that the south was doing so well because of low wages and union busting should worry everyone. And how many communities were destroyed in Ohio and Michigan just so some capitalist could make a few extra bucks?

[Ned]

Originally posted by The Templar


Tell that to the losing region. The fact that the south was doing so well because of low wages and union busting should worry everyone. And how many communities were destroyed in Ohio and Michigan just so some capitalist could make a few extra bucks?

This is why we have the Democrat party constantly trying to impose Northern labor laws on the South. There is little wonder why the South votes Republican. They can smell a pig in a poke.

[MrBaggins]

Originally posted by The Templar


Tell that to the losing region. The fact that the south was doing so well because of low wages and union busting should worry everyone. And how many communities were destroyed in Ohio and Michigan just so some capitalist could make a few extra bucks?

I wasn't saying that regional job relocation wasn't bad... just that international job relocation was WORSE... in a national sense, regional job relocation doesn't make a massive difference, given the fact that the taxed wealth is usually about equivalent. International job relocation loses the original country tax revenues and additional recycling of wealth, having knock on effects on other jobs.

[Ted Striker]

Here is my take:

1) Normally in economic downturns these things happen as the economy does some shifting and reorganizing.

2) Outsourcing makes sense for certain functions, but is ridiculous and immoral for other functions.

Where it works:

For software vendors, having a 24/7 support line available with top quality engineers all time, outsourcing to India or Australia makes sense. These people are working "normal" hours in their respective countries, are highly skilled, speak English well, and best of all aren't "taking" jobs from Americans. Because trust me you aren't going to find that the quality and quantity of engineers that are available to work at 1 in the morning. So the time difference is a major thing when a company wants to expand its service.

Priya.

Where it doesn't work:

It's outright DESPICABLE for government agencies especially to be outsourcing. The government should ALWAYS be a place where citizens can find a stable job. Culturual differences also make government jobs highly sensitive to knowing the people you are serving.

3) Outsourcing isn't always superior. There have been alot of horror stories about poor service due to language and cultural barriers. Companies can also get bad press if workers find out they are outsourcing jobs that could have been done stateside.

4) Normally in an economic downturn, foreigners get scapegoated. In the late 80s and early 90s it was the Japanese. But if you've ever seen some of the HUGE, I mean HUGE, factories, and headquarters, the Japanese built in America, where they were creating highly paid, skilled jobs for Americans, the scapegoating wasn't fair. I've worked for a Japanese company and so I appreciate them bringing their business to the US. It's the best job I ever had, and sometimes I regret not staying but my current job is the bomb so everything works out.

5) The US is ALWAYS going to be the best place for foreigners to invest. Every generation, someone new will come along. In the 60s and 70s, Europe was strong. In the 80s, it was Japan. Now we have Korea and China coming along strong. But the US will always be there.

But I know that this downturn has been one of the toughest ever. We will be back. And trust me, the next boom is going to be way bigger than the last. And the good thing about it is that the bottom isn't going to drop out. Sure, there will be another downturn, but it won't be such a hard fall. We will be okay.

USA!

[Ted Striker]

No doubt some tech companies are "hot," but isn't outsourcing an issue? Are these companies doing much hiring here in the U.S.?

A couple of things come into play. First, product design and marketing really have to stay in the U.S. Those functions aren't getting outsourced. Then, if you look at smaller tech companies, some of which have been growing at 30% a year right through the recession, they tend to outsource less than the giants do. So again, techies should focus their job hunts on the leaner, nimbler players. But, you know, outsourcing may turn out to be a temporary phenomenon anyway, especially in (high-tech) customer service, where there is already a backlash brewing because of language differences and other problems. One thing outsourcing does is, it distances you from your customer, and that is never smart in the long run. There have also been problems with piracy by overseas contractors. And the current vast wage differential (between the U.S. and other countries such as India) is likely to be short-lived. When you add all this together, my view is that more companies are going to realize, "Hey, we don't have to ship operations overseas. We can get a lot more efficient at doing the work here in the U.S., and keep our customers happy, too."

http://www.fortune.com/fortune/annie...0.html?cnn=yes

[bipolarbear]

I think Communism is the ultimate solution to anything, including a bad itch.

[Drake Tungsten]

Priya.

[Ogie Oglethorpe]

Key to job retention is to make the environment more friendly for businesses both small and large.

That includes long hard looks at regulation, labor, taxation policy etc.

You want jobs you need to incent industry to stay not drive it away via onerous policies.

[Arrian]

[attempted threadjack]This isn't something the really applies to outsource IT tech support, but would something like this be possible:

If a company wishes to do business in the United States, and has operations outside the United States, those international operations must comply with EPA guidelines for the environment, as well as workplace safety guidlines, or suffer the same penalties/fines they would suffer in the US for such non-compliance. Repeated non-compliance = expulsion from the US marketplace.

Thus, a multinational corporation seeking to cut costs by setting up production in 3rd-world countries would be forced to pay attention to the environment (not that our standards are really all THAT stringent) and the safety of their employees. I left out wages, because I think it's dumb to try to force a particular wage level on a different economy.

-Arrian

[Ogie Oglethorpe]

Originally posted by Arrian
[attempted threadjack]This isn't something the really applies to outsource IT tech support, but would something like this be possible:

If a company wishes to do business in the United States, and has operations outside the United States, those international operations must comply with EPA guidelines for the environment, as well as workplace safety guidlines, or suffer the same penalties/fines they would suffer in the US for such non-compliance. Repeated non-compliance = expulsion from the US marketplace.

Thus, a multinational corporation seeking to cut costs by setting up production in 3rd-world countries would be forced to pay attention to the environment (not that our standards are really all THAT stringent) and the safety of their employees. I left out wages, because I think it's dumb to try to force a particular wage level on a different economy.

-Arrian

Many ways to get around this. Private labeling by third party companies, distributors, etc. Let alone the enforcement?

As for stingency of environmental standards, you really need to have dealt with the regs first before making broad brush judgements.

[Imran Siddiqui]

True, Ogie has a point. Enforcement would be incredibly hard.

[Arrian]

Many ways to get around this. Private labeling by third party companies, distributors, etc. Let alone the enforcement?

Yes, enforcement would be a major issue. The best way is probably to make the penalties harsh, and do unannounced inspections. That way you don't have to check up on each and every facility. You nail a few offenders, and the rest will take the hint.

As for stingency of environmental standards, you really need to have dealt with the regs first before making broad brush judgements

I do deal with them, albeit in an indirect fashion (I handle environmental claims for a major insurance company).

-Arrian

[Ogie Oglethorpe]

Originally posted by Arrian


Yes, enforcement would be a major issue. The best way is probably to make the penalties harsh, and do unannounced inspections. That way you don't have to check up on each and every facility. You nail a few offenders, and the rest will take the hint.

More government now to deal with outside companies. A function of the already too powerful EPA. ugg.

I do deal with them, albeit in an indirect fashion (I handle environmental claims for a major insurance company).

-Arrian

Then you must realize that the current regs have devolved down to nothing but legal mumbo jumbo requiring a staff of onsite reg interpreters who add what value to industry or for that matter true environmental performance (pollution reduction)?

For the most part simply added cost, doubly so to the small firms.

[Arrian]

More government now to deal with outside companies. A function of the already too powerful EPA. ugg.

Well, given that this should help the host countries of these facilities, I hope we could convince their governments to assist us in the regulation (though that raises issues of bribery of the local officials by the companies, I know).

As for the regs, well, I'm most familiar with the guildelines for cleanup of a historical pollution problem, as opposed to regs for current operations. What I know from the cleanups is that they take FOREVER, sometimes due to the government moving with all the speed of a glacier, but also because businesses will try almost anything to avoid having to pay for a cleanup. Look at what GE did with the Hudson River PCB thing. I've seen similar stuff, just on a small scale.

So while the government is certainly to blame for some of the problems, so is private industry.

-Arrian

[Ogie Oglethorpe]

Originally posted by Arrian


Well, given that this should help the host countries of these facilities, I hope we could convince their governments to assist us in the regulation (though that raises issues of bribery of the local officials by the companies, I know).

As for the regs, well, I'm most familiar with the guildelines for cleanup of a historical pollution problem, as opposed to regs for current operations. What I know from the cleanups is that they take FOREVER, sometimes due to the government moving with all the speed of a glacier, but also because businesses will try almost anything to avoid having to pay for a cleanup. Look at what GE did with the Hudson River PCB thing. I've seen similar stuff, just on a small scale.

So while the government is certainly to blame for some of the problems, so is private industry.

-Arrian

I'll not argue that.

But your example go to the heart of what I talk about. The whole regulation issue has come down to nothing but employment for lawyers. Couple that with fear of litigation and US companies have opted to move out rather than risk continued operations.

As you are aware the precedents are set that even if companies are operating in good faith and operating using good acceptable practices of today they can be held liable for operations today if and when regulations changed in the future (ex. Superfund cleanup) Why would anyone with half a brain operate manufacturing in the US knowing that.

[Arrian]

As you are aware the precedents are set that even if companies are operating in good faith and operating using good acceptable practices of today they can be held liable for operations today if and when regulations changed in the future (ex. Superfund cleanup)

Yes, this sucks in a major way.

First, the principle blows. You operate in a totally legal manner, obeying your permits, etc, and then you get slapped with a cleanup bill.

Somebody has to clean it up. Which means somebody has to pay to clean it up. The Superfund thing was born of a desire to "make the polluters pay!" It just doesn't often actually work that way. What actually happens is that a few big polluters actually get nailed (after decades-long legal and PR battles, like in the case of GE), but also a host of small businesses that didn't really do anything wrong get nailed too. And then there is the insurance angle.

Insurance policies written 40 years ago are being dug up and claims are being filed. They were written in an era that pre-dated Superfund law, and thus did not contemplate this stuff (just like Joe's widget shop didn't contemplate that sending his waste to a licensed landfill was going to bite him in the ass 20 yrs later). By the 70s, you had the beginnings of pollution exclusions. By the mid-80s, there were much better ones, and specialty lines of pollution insurance. But various state court cases have often re-written insurance policies for public policy reasons. Sometimes I see the logic to the decisions, and agree. Often, however, I wonder how in the hell they could have made such a decision. "Sudden and accidental" =! "unexpected and unintended," unless of course you're in New Jersey (and now some other states too).

Basic concept: Insurance company sold insurance the gas station. The gas station paid premium! The tanks leaked. Ergo, insurance company should pay for the cleanup. Nevermind the policy conditions/exclusions. Insurance companies are evil anyway!

So you have lawyers in the fight between companies (responsible for pollution) and the government, lawyers in the fight between the companies (over who is liable for what) and lawyers in the fight between the companies and their insurers (over whether or not it's a covered loss). And sometimes lawyers in the fight between insurance companies over who owes what.

And in the end, who pays? The public, of course. Insurance premiums rise, the cost of doing business rises... etc.

But how do we fix it? There's the rub.

-Arrian

[Ned]

I wonder how all this talk about repealing NAFTA is affecting Kerry's standing in Mexico and the Mexican-American community?