Outsourcing is Good for America (?)

Dom

This week, the General Accounting Office (GAO) released a study on the outsourcing Latest News about Outsourcing of jobs overseas, prompting at least two Seattle-based unions to call for government action.

But while protectionism might be a typical reaction, America's future depends on embracing trade.

Efficiency and Outsourcing

The reasons to support greater trade are based on solid economic principles such as comparative advantage. As outlined by David Ricardo in the early 19th century, comparative advantage says that even if the United States had an absolute advantage in making all goods and services, it's still mutually beneficial to trade with another country.

Such trade allows the U.S. to specialize in the area where it enjoys the most efficiency, thereby creating more productivity and wealth. Simply put, one should focus on what one does best. America is extremely good at innovating and starting new businesses -- and outsourcing boosts this efficiency.

For instance, before it became easy for companies to outsource software coding jobs to India or elsewhere, a start-up in Silicon Valley would have to hire local labor at higher rates, driving up the cost of starting the business. But if it's cheaper to hire labor, more businesses are likely to be created, spurring greater economic growth, investment and ultimately local job creation when companies re-invest their profits.
Fear and Hysteria

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BMG_Cya=-

Quote from the rest of the article...
This is way too broad a statement.

First of all it isn't, or it shouldn't be, the U.S.A.'s job to
pull other countries out of their miseries caused by low cultural
intelligence, corrupt governments, or simply that country's
choice to put other things ahead of economic development.

Secondly, this "timeline" of getting other markets up to speed and
actually interested in products that the US produces and/or
outsourcing stimulates is a perpetual unknown. Who is to say
that for instance Libya or especially India, when given jobs
that could have and should have been filled by AMERICAN workers
will respond with the production and interest to eventually
improve our overseas and worldwide sales? There is too much
culture differences involved. Too many political issues in
general involved as well.

I'll cut this to the quick...

This issue is one in which I strongly disagree with Bush and
any other political leader who favors outsourcing. IT IS PLAIN
WRONG and destructive to the US worker and citizen.

There is an old saying that goes...

"Immigrants or outsourced jobs are only positions that the American
worker wouldn't fill anyway..."

That is incorrect.

We are just not going to fill that job and be paid "two centavos",
or some pitiful ass wage.

It should not be our responsibility to help every godd*** friggin
corrupt or third world country.

I am tired of the US not taking care of it's own issues and
problems economically.

I probably shouldn't post this as it's none of anyone's business,
but I personally have been unemployed and looking for work for
going on 7 months now. If it weren't for a small trust fund, and
the fact that my house is paid for, I might be living in my
car, or worse. PISSED OFF I AM!!! Because where I live
there are nothing but minimum wage to paltry ass paying jobs
available.

I'm not working for less than $17 an hour.

Why?

Because that is what I used to average, usually a bit more,
before the company I was working for decided to close shop,
and move their business elsewhere. That's also about what
I have been paid the last 10 years at any job.

I do have an interview tomorrow with an investment firm.
Hope I get it, as I need a little POSITIVE cash flow.

AND BUSH needs to quit coddling his rich buddies/owners of
large corporations and put a stop to this ASAP!!!!!!!!!!!!!!!!

Al_Vampyre

You took it upon yourselves to 'help' Iraq!

Seriously though, I disagree with outsourcing for a different reason, the people that generally do the work that is outsourced (mostly call centre) are at the lower end of a developed country's income bracket. How can that be good for a country? All it does is make the poor poorer and the rich richer.

Dom

I've had a lot of second thoughts on what courses to take when I go to college because of outsourcing.

mkk

Though I'm not american myself I dare to say that Corporate America does not equal America, no matter what Haliburton & Friends say. Neither is this outsourcing actually related to trade. Trade is in between countries or corporations, not internal resource management. Wrying words like this is very common in the corporate and budding politicians vocabulary, at a level one would otherwise expect to see in press releases and advertisements.

While I do think that the US and the rest of the western world have an obligation to at least stop undermining many of the third world economies, much of this outsourcing does not come as the beneficial "aid" they claim. Instead it's normally so that the mega corporations take advantage of local conditions to keep having people working at the same low wages they would otherwise get and to working conditions (personal safety, hours, employment rules) that would be shunned in the western world. At best the corporations pay some taxes in the poor countries, at times when they do not shift their numbers around internally to make it look like the real profit was made elsewhere.

Now there are positive effects in the US from this outsourcing, but positive to the corporations only. An less secure workforce is something truly wonderful according to Greenspan. Corporate America agrees.

BMG_Cya=-

Whether you believe it or not, we had other more important reasons
for "helping" Iraq as you say, and they are not financial. The war
so far has cost the USA BILLIONS of dollars.

Now countries like France...Germany all want in, AFTER, the USA
has done all the work and spent all the money.

Who should be more "ashamed" if you want to take that stance
about money, oil...whatever?

It isn't the US that should be...'eh?

But, this point has been argued to the point of insanity so I'll
leave it as that.

***************************************
Actually, the type of work I usually do is a PNC Machinist.
PNC is similar to CNC but involves sheet metals, aluminum,
titanium, etc. and these are spun at high speeds and formed
on a pre-fabbed tool.

The people taking the jobs for less money in this line of work,
are in the majority, latinos from Mexico. They'll learn or know
the set-up and operations of the machining, and do it for
$3-$4 less per hour. This isn't really "outsourcing" in a strict
sense, but you get the idea...

My other usual lines of work are in account
handling/CSR/Gen. Office. Alot of these jobs have been
outsourced to places like India...etc.

*************************************
I have two years at a local 4 year college. No degree, just a
variety of courses and experiences. "Jack of all trades"...I
guess.

Whatever you take, make sure it includes some type of foreign
language study.

I'm tired of this subject atm....getting me pissed and depressed.

Out...for now.

raid517

There has to be some irony in this. You help create a global market. You promote the ideals of the free market and the benefits of capatalism for all, then when countries begin to develop - when they finally grasp the concept of what to be competative really means, you complain when suddenly you find you are not able to compete in a level playing field with them?

Why should developing countries halt their development, just because you feel that somehow they deserve to be any poorer than you?

Instead of complaining, instead of simply hanging on to the old realities why can't you instead adapt, find new ways to compete, find new markets, become even more competative than you currently are? You are unlikely to stop these countries from offering a cheaper price - and if you are not prepared to do the job at whatever price you delude yourself into believing you are currently worth - even if you legistlate at home to prevent this 'evil' you call outsourcing' - someone else will reaise the value of these markets - perhaps someone else in another country. This will inivitably mean cheaper imports, which will compete against their more expensive American counterparts. So in the end all you end up doing is risk pricing yourself out of the market.

Who knows, perhaps outsourcing itself might be the next big American industry - there is certainly a lot of money to be made from developing new market - and perhaps there might be a new golden era around the corner where the American ecconomy is seen to be booming due to new markets both created and exploited abroad.

Certainly as new markets develop, so also will expectations in these new markets - and as these grow so also will wage expectations. In the end, maybe all things will be made equal. But what we have here is a changing world - and it is a world that will change whether you want it to or not. Developing markets are developing due to their willingness and ability to deliver innovative goods at competative prices - and because they are willing to work their asses off to do it. Good luck to them is what I say. There are possibly a lot of Americans in this world who may benefit greatly from loosing a few notches off their 40 inch plus belt sizes anyway. So what if the guy in the developing ecconomy wins out - because he was willing to work a 14 hour day on nothing more but a few bowls of rice and a few spicy beans in order to make enough to feed his family and have a little spare left over? Maybe one day you too will come to know how this feels. Why should your life, or your expectations of life be any greater than his?

With or without American involvement, global ecconomic development will remain a reality. You either realise that and deal with it, or prepare for the day when these other ecconomies far outweigh your own in terms of their power and relevance.

It may seem harsh - but covering your eyes and ears and simply pretending it isn't real is unlikely to stop it from happening.

GJ

BMG_Cya=-

LMAO!!! Yet again this guy lets his blind hatred of the US
and probably all capitalist societies, totally warp his view
of the reason for encouraging other countries to develop
productive societies, and in effect actually contribute
something useful and/or helpful to the rest of the world.

The USA encourages and supplies the ideas and economic model,
it is then up to that country to "adapt" and use their minds
and creativity, not just steal our ideas and technologies and jobs.

Basically, you are in a way insulting other countries because you
think they can't think for themselves.

Why don't you go and cogitate...or just....go?

You are just babbling again...repeating the same erroneous point,
but in 10 different ways and phrases.

Let me clue you in genius...being a sesquapedalianist does not
make you intelligent.

Now...you are boring me...and this topic is now pointless.

Nacht

This is basically common knowledge in economics. If another nation is more effecient at producing goods, then that causes competition in the market and makes it better for both the producers and the consumers. if we only use domestic made products, and we have no competition from outside sources that are higher quality/more efficient, then we end up loosing in the long run.

raid517

Laugh all you want. But I would say I was more of a capatalist than you in this. Laugh hard if you feel like it, because you may also just one day laugh yourself out of a job. You imagine that the world 'depends' on American products and ingenuity to survive. But I'm sorry to say that I have virtually zero American based goods in my home ATM. Not because I bare some innate hatred of the American people as you appear to imagine - but because like many places in this world it is virtually impossible to find anything that is genuinely American to buy.

Why? Well no doubt this is simply because American goods are already too expensive to import. We are flooded by a plethora of cheap high quality imported goods in this country. What would inspire us to suddenly switch and buy any of the much higher priced American imports when we already are confronted by a world where prices - and prosperity for most of us have never been so good?

You seem to forget that America is not the only capatalist society on this Earth, so even if you built a wall around everything you have and everything you own, there will be others equally willing to exploit the opportunities that developing markets present.

I see it as nothing short of utter arrogance to accuse a guy who slaves his guts out in a factory for a few dollars a day and then goes to school for 5 hours each night, in the hope that he may one day better his life just as many people like you and your forbares aspired to in the past, of 'theft'. How and in what way is this 'theft?' How and in what way is he any less deserving of the same aspirations and same benefits as you?

He has seen what it means to compete and is willing to do what it takes to do so. In my eyes that makes him someone to be admired. The fact that you appear unwilling to do what is needed to compete on any kind of level playing field is something you must personally justify, not me - because if you continue in this attitude there may simply be no more markets which you are able to compete in.

No doubt then too, you will still look for someone else to blame.

GJ

Nacht

what kind of computer are you typing on raid?

raid517

It is self built, 100% Linux system with virtually all the parts imported from east asia. Even the CPU AMD is a 'victim' of this so called outsourcing that you despise so much. But here again there is competition as my laptop is a Via E1 3001 C3 based system. Somewhat underpowered perhaps, but very well suited to my mobile computing needs.

I don't really see the relevance of your chain of reasoning.

I can happily conceed that America has contributed quite a lot to technology in the past. (Not half as much as many Americans imagine - but a lot nonetheless). But the past is not now. The past does not last forever. We are in the middle of a changing world and in order to keep up and compete with it we must learn what it means to maintain this level of change too.

The question then becomes not what potentially outsourced - or indeed completely externally produced CPU I may choose to use, but what you and we in the West in general are prepared to do to remain competative?

America became rich on the ethos that hard work flexibility and long hours brought rewards. So now other's in other regions of the world are applying this lesson to their own ecconomies - and appear to be benefitting a great deal from it. So maybe it's a case of all of our expectations having been raised too high? Maybe there is a certain degree of flabbyness and arrogance in what we ultimately believe ourselves to be worth?

Maybe what we thought we were worth isn't nearly as much as we imagined it to be?

Perhaps first we must relearn the lessons that we have for so long now been keen to sell to others.

Because they have learned them - and like the good sales men that many of them now are, many of them have come back to you and are busily knocking at your door.

How hiding your head in the sand is in any sense likely to change this is not something I find easy to understand.

GJ

Nacht

where did you get that I disagreed with you? hmm?

anyways, the thing i think most people get hung up about with outsourcing is that there are no labor laws in some countries that work is exported to.

you ever seen Michael Moore's video about how one man destroyed flint? yea, that movie made me mad.

raid517

Well that's not quite what people get mad about. Until Moore and other doccumentary makers brought it to our attention, no one really cared that much that their nike or reebok trainers (and other goods) were being produced by young kids, chained to their work benches for 15 hours a day. But the concept of development I think goes deeper than this. Our own UK ecconomy contains what we might describe as some shocking anomalies in the past, yet in it's time it too rose to become one of the largest in the world (and at 4rth largest it still is in many ways). However there was then as there has been in many of these countries now genuine political pressure for reform - and with that reform have come new, more efficient and significantly fairer working practices for many people.

It is these reforms that have brought about the opportunity for even greater levels of investment in local ecconomies - which in turn has spurned even greater levels of growth - and it is this growth, this spurt towards genuine all out development that the older more established eccomomies now feel threatend by. I've seen men watch a movie of 3 to seven year old kids break and carry 30 pounds of sulphurous rock between them and keep doing it all day and night long, or pick over a rat infested garbage pit for a few scraps of plastic to sell for a couple of dollars a day and not bat an eyelid at it. It's only when some of these guys decide that they don't have to do this anymore, that many of us in the West suddenly feel threatened - that somehow they are a risk to us and any prosperity they are now able to generate for themselves should somehow be forcibly reveresed or restricted.

But as ecconomies develop so also will inevitably standards - so while perhaps not ideal for now, we have to look to ourselves first and not judge too harshly - and think a little harder about what it took for us to get to where we are today.

No one is advocating turning back the clock, but I think it is important to realise that it's ticking all the same. In the end we either adapt or we die - and that I think is very much a part of what outsourcing really is.

It's the guy who won't do it, V the guy who will. The guy who works 9 to 5 and drives an oversized gas guzzling car and spends his leisure time in front of a big 40 inch plasma TV, v's the guy who rides a push bike, works tirelessly each day in some dead end call centre - and studies at night for an engineering degree so that his kids and his country needn't be dependant on anyone for their future. It's about the will to win too - and who has most of it.

Who do you think in the end stands a better chance of success?

GJ

OldBuzzard

Raid...I must say that I am very suprised to find that I agree with you on this issue. Generally my views are almost totally opposite to yours.

If 'outsourcing' is so bad, maybe we in the States should send back all the jobs that Honda, Toyota, Isuzu, (and other foreign companies) 'outsourced' to us. Lets send back all those high paying jobs, and bring back all the minimum wage jobs. After all 'outsourcing' is evil, and we need to make things right.

BMG...I think that you need a bit of a 'wakeup call'. While you may think your 'skills' are worth 17.00/Hr, in you own post you tell us that the marketplace has determined that they are in the 13-14.00/Hr range. You can either accept this fact and work for 13-14.00/Hr (which is certainly more that you are earning now), or develope other skills that ARE worth that 'magical' figure that you seen fixated on.

ToshiroOC

Why don't you go and think over the fact that you've been warned privately, and now you're being warned publically? I don't want to see personal crap like this in the forums, and I won't be seeing it again, one way or another. We debate issues here, not insult people, and ad hominem arguments like this are not acceptable.

BMG_Cya=-

The estimate of "$13-$14.00" was just that an estimate...a theoretical example.

And I think I'll choose what I make an hour or a year...ya think?

BTW...got a job today...start Oct. 11 Training for 30 days starts
at $14.00...then they bump you to $16.00. Easy job...handling
customers 401K plans...whether they want to invest in trust
funds...stocks...

Had to sign a Securities Exchange waver saying I had never been
investigated...etc. for fraud...which was a trip.

Place has 2700 employees...doesn't look like an office building
more like a cross between a shopping mall, a cathedral, and
some kind of Aztec pyramid ruin. Huge place...running brooks,
ponds...even horses and wildlife.

Kinda reminds me of those stories you hear about the early
Silicon Valley start up companies...extravagent offices
that are eco friendly...

So...on to better things.

C EEEEEEEEEEEEEEEEEEEEEEEEEEEE-yA.

raid517

Well good luck on the new Job. But nonetheless the point and the message behind this thread still stands I think.

The only real problem with 'outsourcing' is that some people seem to imagine that the world somehow 'owes' them a decent lifestyle.

But there is a distinct possibility that this may not be the case at all

Unlike some however I do have a heart - so my views on social security and health care may not be quite as radical. A form of universal health care should be a basic human right for any truly developed society - but that is a different subject for a different day.

In any case as I said, it remains true that it is really quite hard to buy anything that can be described as being American in origin outside the borders of the USA (particularly through Western and Eastern Europe and Asia) and that alone is surely telling of some form of fundamental weakness in the current make up of the American ecconomy. How long I wonder can such a condition continue?

I think it is certainly a mistake to imagine that it could somehow last forever.

GJ

Nacht

exactly..we have huge BMW plants all around where i live...it would be a huge blow to our local economy to see them leave.