NationStates Jolt Archive

http://www.ncpa.org/pub/ba/ba480/

Though the pace of U.S. job creation has quickened recently, some “Benedict Arnold” companies are still being criticized for outsourcing work from the United States to other countries. U.S. manufacturers have outsourced operations to countries such as China to lower wage costs and escape from high taxes, burdensome government regulations and intransigent unions at home. For similar reasons, service jobs in information technology (IT) are outsourced to India. Less well known, though, is that increased economic globalization has caused jobs to move to the United States as well as away from it. And because of the higher, increasing productivity of American workers, the jobs that move here pay more than the ones that leave.

Very interesting analysis, although I'm worried that we Americans are being exploited by those capitalist pigs Germany and France :sniper: :sniper: . Seriously it looks like outsourcing is actually good for most Americans, both employee and employer.

I'm sure that within three posts this will turn into some sort of rant about God knows what :p but I'm hoping for some intelligent (yeah, yeah I know) response.

P.S. Sorry if this has been posted before. :fluffle:

Countries outsource work to us primarily because we have the highest technology and most capital.

However our prolifigate borrowing ensures that within a decade or so capital will flow out of our country, not into it, and we are losing our high tech edge because government research spending (read NASA) has been reduced to virtually nothing.

My fear is that soon jobs will only flow out. We cannot compete with China on cheapness, and if we lose our ability to do what others simply can not...

I completely agree on the borrowing issue, but I wonder if we definitely need government funding on scientific research (as opposed to private/corporate funding) to keep our edge.

http://www.fee.org/vnews.php?nid=4017

Meh, it's not all about money. Try telling IT people that outsourcing their jobs is ok because other kinds of jobs are being insourced that pay better... they won't be very happy.

And I agree about the technology funding thing. Americans aren't naturally smarter or anything else to give us an edge, and we're getting a government that is progressivly more concerned about corporate welfare than technological or innovative work. Talk about shooting yourself in the foot.

OK, that was three.


RANT RANT RANT

Bush blah blah blah!

France sux!

wank-wank-wank!

Meh, it's not all about money. Try telling IT people that outsourcing their jobs is ok because other kinds of jobs are being insourced that pay better... they won't be very happy.

And I agree about the technology funding thing. Americans aren't naturally smarter or anything else to give us an edge, and we're getting a government that is progressivly more concerned about corporate welfare than technological or innovative work. Talk about shooting yourself in the foot.

If you know what those insourced jobs are do let me know. I know a few IT people that have been out of work for awhile. A couple even had to train their replacements who were flown in.

There is an image problem that outweighs the welfare vs R&D thing. Computer Science enrollment is on the decline. Some of the local schools have reported a 15 and 20% drop.

Countries outsource work
Countries do not outsource jobs. Companies do. They push people into unemployment and then whine nobodies buying what they are selling.

"Stronger U.S. Job Demand. Mann believes globalization of Information Technology (IT) services “will yield even stronger job demand in the United States for workers with IT proficiency and skills.” Indeed, she notes that overall employment in job classifications most affected by IT service outsourcing is rising, not falling."

Ok I am not following the logic on this one. Mind you we are not a giant corporation. You export the majority of the IT functions, why would you create the same function in the states when you can simply increase the personel off shore?

Also, venture capitolists will not talk to you unless you have offshoring in your plan.

Not seeing it.

"Competitive Gains for Small Businesses. Researchers have also found that small firms and new startups gain more from outsourcing than large corporations. The latter have managerial structures that hinder their ability to take full advantage of outsourcing’s benefits. Smaller and younger companies can easily organize themselves to utilize outsourcing, thereby gaining sales and competing better in today’s global marketplace."

Ok makes sense. If you don't know how to run an IT department, don't have the capitol. etc. etc.

How does this create jobs for the IT world?

"Rising Standards of Living. Indians now doing jobs outsourced from America are seeing a rapid rise in their wages and standard of living. In the process, they are becoming more like Americans, which is translating into demand for American goods and lifestyles. Thus, according to the McKinsey Global Institute, for every $1 outsourced, the economic gain to the United States as a whole is $1.12 to $1.14; whereas the country to which a job is outsourced gains just 33 cents. "

That's great for Indians. It does not mean anything to the guy out of work.
Also, that's a large presumption that they will automattically purchase American goods. Other countries will do business there as well.

Countries do not outsource jobs. Companies do. They push people into unemployment and then whine nobodies buying what they are selling.

Bingo!

I do love the econmy improvement argument when the workers are out of work or making much less then they were before.

Meh, it's not all about money. Try telling IT people that outsourcing their jobs is ok because other kinds of jobs are being insourced that pay better... they won't be very happy.

I'm sure that they won't be happy, but what if we suddenly reversed the trend, and there's a net LOSS of jobs?

I happen to oppose workers suffering in sweatshops, myself.

a) Arguments for Job Outsourcing:

Companies send low skilled, low payed jobs abroad, to lower costs. Smaller costs mean higher margins = more profits. With more profits, a company can invest more, thus generating more employment, which is translated into more consumption. Everyone wins on the long run.

b) Argument against Job Outsourcing

Companies send low skilled, low payed jobs abroad to lower costs. They lower costs, but demand of their consumer basis declines. Companies are able to lower costs, but since demand lowers, they still must either maintain or even cut margins = less profits. Less profits, companies invest less, do not generate employment, everything goes to hell.


Now.. Economically, the first argument is sound. It is. Seriously, i study economy :P

But in the practical, the adjustment costs (which economical science finds very hard to calculate, or modelate) of sending jobs abroad, seem to outpace the earnings of outsourcing jobs. It is still not clear, especially because the trend of outsourcing is only 10 years old, and this kind of data must be analysed throught time :/

a) Arguments for Job Outsourcing:

Companies send low skilled, low payed jobs abroad, to lower costs. Smaller costs mean higher margins = more profits. With more profits, a company can invest more, thus generating more employment, which is translated into more consumption. Everyone wins on the long run.

b) Argument against Job Outsourcing

Companies send low skilled, low payed jobs abroad to lower costs. They lower costs, but demand of their consumer basis declines. Companies are able to lower costs, but since demand lowers, they still must either maintain or even cut margins = less profits. Less profits, companies invest less, do not generate employment, everything goes to hell.


Now.. Economically, the first argument is sound. It is. Seriously, i study economy :P

But in the practical, the adjustment costs (which economical science finds very hard to calculate, or modelate) of sending jobs abroad, seem to outpace the earnings of outsourcing jobs. It is still not clear, especially because the trend of outsourcing is only 10 years old, and this kind of data must be analysed throught time :/
The problem however is that it's not just lowskilled, lowpayed jobs that are beeing outsourced. Unless you consider IT kobs like system development, software engineering, webdesign and jobs like that to be lowskill. In the Netherlands alone some 125,000 IT jobs will be outsourced to India and other low salary, in comparison, countries in the next 4 to 6 years.

The problem however is that it's not just lowskilled, lowpayed jobs that are beeing outsourced. Unless you consider IT kobs like system development, software engineering, webdesign and jobs like that to be lowskill. In the Netherlands alone some 125,000 IT jobs will be outsourced to India and other low salary, in comparison, countries in the next 4 to 6 years.

And thus India becomes to Services, what China is to manufacturing..

Well, still in (cold) economical analysis, that is all Labour factor. The points of analysis are the same, for arguments for and against outsourcing.

(Sincerely, this is a problem that is extremely complicated to say.. its one of those dreadful things that we must wait and see. Never in the past, as this happened before, so it is hard to predict what the economical consequences will be)

With more profits, a company can invest moreBut what about the corporations whose CEOs etc pocket that profit, which no one can deny happens?

But what about the corporations whose CEOs etc pocket that profit, which no one can deny happens?
Oh come on. They still make a profit. Not like the CEO's pocket all of the revenues.

But what about the corporations whose CEOs etc pocket that profit, which no one can deny happens?


Such corporations tend to get run over by more progressive, investment prone enterprises. Then, the owners of the company that did not invested fire the CEO. But managers are all maggots, I say fire them all :p

Oh come on. They still make a profit. Not like the CEO's pocket all of the revenues.

Well of course they don't take all.

I saw a newpaper article awhile back that after the new round of job exporting started, the average CEO compensation in the US is now 302 times more then the average worker.

Oh come on. They still make a profit. Not like the CEO's pocket all of the revenues.
Technical clarification: if the CEO trousers the money as wages, that comes before the profit calculation. If there is a remaining profit, the shareholders get to trouser it. Said shareholders may or may not then invest said profit, or hoard it or fritter it, which is presumably the point that Unfree was driving at. (Note: if the CEO trousers all the profit, classic economic theory states that the shareholders sack the CEO or the company goes bust.)

(Note to self: get a more interesting job.)