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What Should a Documentary Filmmaker Ask About Offshoring? 1091 1091

Philadelphia-area development economics and finance student Rachel Anderika and her associate, programmer/filmmaker Krishnan, are making a documentary about the effects of offshore outsourcing. Their "still under construction" Web site, Project Outsourced, gives you more information about their work. They're interviewing economists, bankers, anti-outsourcing advocacy groups, pro-outsourcing CEOs, columnists, and others. Where you come in is helping Rachel and Krishnan come up with good questions to ask. We'll forward 10 - 15 of the highest-moderated ones posted here (within the next 24 hours) to them. Expect summaries (and possibly audio or video clips) of the answers in late May, and news about the finished film this Fall.
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What Should a Documentary Filmmaker Ask About Offshoring?

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  • Summary (Score:4, Insightful)

    by Slashdot Hivemind (763065) on Monday April 12, 2004 @12:02PM (#8838107)
    Geek jobs come under threat. Suddenly geeks lose libertarian leanings* and belatedly side with the ex-manufacturing workers who bullied them through High School

    *For ENTIRELY unrelated reasons, obviously. No hypocrisy here at all
  • by BWJones (18351) * on Monday April 12, 2004 @12:02PM (#8838109) Homepage Journal
    A documentary is important and I would fully support one being created (Disclaimer: my first major in college was documentary film), but perhaps more importantly, that documentary would be made much stronger if it would include some hard numbers and studies including rigorous statistics on just how offshoring is helping (or hurting) the 1) corporation, 2) worker, 3) consumer. Perhaps not just the viewpoint in the US as an interesting perspective could be made from the person getting the job.

    So, here is the deal: Documentaries are often about perspective but ideally, they are about finding the truth and revealing that truth to your viewer. Political perspectives are going to be difficult to get, but contact someone like Robert Reich who could place you in touch with a variety of folks in and out of the political scene.

    bob@RobertReich.org
    Robert Reich
    P.O. Box 381483
    Cambridge, MA 02238
    (617) 547-2206
    Fax: (617) 498-0048

  • What sort of responsibility to create jobs should a company have to the nation that purchases/has a demand for the goods they're producing?
  • Re:Why India? (Score:2, Insightful)

    by Anonymous Coward on Monday April 12, 2004 @12:03PM (#8838115)
    "What is the end of the line for the capitalist? "

    When every person on the whole planet makes at least 60,000$/year ??
  • by b-baggins (610215) on Monday April 12, 2004 @12:05PM (#8838135) Journal
    Ask the arguments of the other side as questions.

    For example, ask the anti-outsourcing advocates what the cost in non-visible jobs is by engaging in protectionism of the highly visible tech jobs lost to outsourcing.

    Then ask the pro-outsourcing folks a question like how will the economy absorb the displaced workers resulting from outsourcing.

    This will make each side actually defend their position instead of using you as a sounding platform for their agenda.
  • by unassimilatible (225662) on Monday April 12, 2004 @12:05PM (#8838144) Journal
    At least in some castes, they are real sharpies. We might be exporting jobs there, but we import a lot of their brains from their best technical schools.

    Africa doesn't have the education levels, yet. But when they do, we'll be there.

  • Re:What field next (Score:2, Insightful)

    by Anonymous Coward on Monday April 12, 2004 @12:06PM (#8838156)

    Nursing pays well. Not get-a-new-porsche well, but $30-40 an hour for a male nurse in night shifts is a regular pay.

    With baby boomers nearing their middle age and taxpayers voluntarily covering Medicaid and other programs that are heavily abused, nursing is not a bad field to get into. There will always be people sick and dying, so market is there.

  • by PseudononymousCoward (592417) on Monday April 12, 2004 @12:07PM (#8838172)
    Seriously.

    I am so sick of people whining "outsourcing sent my job to India" then walking out the door to climb into their Toyota. I'm sorry that your job has been outsourced, I am. But don't you realize that your decisions sent others to the same fate--where was your sense of moral outrage then?
  • by Anonymous Coward on Monday April 12, 2004 @12:08PM (#8838188)
    The topic of outsourcing has been features in slashdot many times.
    Bottomline: Whenever outsourcing is mentioned (or MSFT), I always see comments bashing India and saying that outsourcing is bad.
    As an American, I think this puts us as a Xenophobic and protectionist bunch.

    I will be glad when people stop this mindless bashing and become more open-minded like a true capitalist!
  • by millahtime (710421) on Monday April 12, 2004 @12:09PM (#8838198) Homepage Journal
    My question would be... If the US is outsourcing many areas and this in tern is bringing the other countries up in the economic levels, then what can US workers and companies do to stay ahead of the curve and continue to be a worlk leader?

    At the rate we are going with outsourcing jobs and having decreasing technical educational levels (studies have shown drops in math in science all the way through college) by the time i am old we will not be tha major world power anymore. Other countries will have taken that from us.
  • by kanwisch (202654) on Monday April 12, 2004 @12:10PM (#8838203)
    As an informed, identity-paranoid IT person:

    How will my SSN and other personal information be secured from workers who have zero responsibility to secure it, from a legal perspective?
  • by blair1q (305137) on Monday April 12, 2004 @12:10PM (#8838204) Journal
    Offshoring jobs increases the management/labor revenue split.

    Isn't offshoring just a way to make the rich richer without regard for the American working class?

    Isn't it evidence that the wealthy have no regard for those who must do work to stay alive?

    Isn't it an utter repudiation of the widely held belief that concentration of capital is good for all of us?

    Isn't it a strong reminder that the only thing that keeps capitalism alive is tolerance of the working man for the profligacy of the non-working class?

    I'm no socialist, but I know a revolt when I see one coming. The rich in this country will be lucky if they aren't killed, cooked, and eaten before it's done.
  • Challenge (Score:1, Insightful)

    by Anonymous Coward on Monday April 12, 2004 @12:12PM (#8838231)
    One difficult aspect with this type of documentary is that will be very easy for them to find disgruntled/laid-off workers to interview -- i.e. people who have been "hurt" by outsourcing -- whereas it will be much harder to find people to interview who have benefitted from outsourcing.

    The reason for this is not that there are no people who benefit from outsourcing -- quite the contrary -- but the benefits are much more evenly distributed than the downsides.

    In essence: You can easily track down the 1 person who lost a $1000 project, but it's harder to track down the 1000 who saved $1 on their groceries at Wal-Mart.

    If the directors are un-biased, they'll work around this somehow. Otherwise, it'll be yet another worthless sermon for the choir.
  • who cares? (Score:1, Insightful)

    by P0lyh34) (602065) <polyhead@p[ ]head.net ['oly' in gap]> on Monday April 12, 2004 @12:14PM (#8838252) Homepage
    I mean really.. whats the point. Off shore outsourcing is putting IDIOTS out of work and thats about it. Were talking about help (hell) desk people here. Nobody really usefull. Nobody actually competant. Why should a company pay more for the same level icompetence? Personally i think says volumes about mistakes made by americans and its government that all the jobs are going outside the US. "Because its cheaper" isn't the only reason they move these services off shore. "Becuase its cheaper and better" is why they do it. The biggest complaint people seem to have is "english isn't even their native language." If that isn't a bigotted, racist statement to make i don't know what is.
  • Re:What field next (Score:5, Insightful)

    by red floyd (220712) on Monday April 12, 2004 @12:14PM (#8838254)
    And you thought you got screwed over as a developer?

    Nurses get all the shit, all the repsonsibility, and none of the respect. The hospitals try to keep the number of RNs to a minimum, giving nurses up to 15 patients at a time.

    My wife is an RN, and she's told me horror stories about this sort of shit.

    If the hospitals could outsource nursing care, they would. Actually, they do. It's called "registry nurses".
  • by StandardCell (589682) on Monday April 12, 2004 @12:17PM (#8838290)
    The promise of outshoring has always been cheaper goods, but housing in the Western world and particularly the large tech centers in the US have largely been supported by the higher salaries of white collar workers. Because white collar workers in virtually every profession are now subject to offshoring, what is the projected impact on the housing markets, as well as the financial health of mortgage granters such as Fannie Mae and Freddie Mac? My concern is that the housing market will crash, causing defaults and undermining the overall economy. I would also ask the same question regarding automobile manufacturers' sales, and if outsourcing will do the same for their markets, as well as auto loan granters.
  • by CrystalFalcon (233559) on Monday April 12, 2004 @12:17PM (#8838294) Homepage
    Ugh. White man comes to America, takes away all precious, precious land from Indians.

    Now, Indians take away precious, precious income from white man in return.

    What goes around comes around, as white man says.
  • Re:What field next (Score:3, Insightful)

    by Killswitch1968 (735908) on Monday April 12, 2004 @12:18PM (#8838308)
    Business and management. IT gets outsourced because, well, it's not that hard a skill compared to other professional degrees. If you want to make even $50K/y you had better convince your employer you are actually worth that much. And generally that means IT isn't enough. Have you considered an MBA?
  • by DrSkwid (118965) on Monday April 12, 2004 @12:18PM (#8838309) Homepage Journal
    We all live on the same planet so there can't be any such thing as outsourcing in a world with trade.

    The people of the rich countries hve been happy to eat cheap (though artificially expensive!) food for years.

    The short term costs to the newly jobless are high but in a world ecnomony eventually the disparity between one country and another should shrink, unless the disparity is kept open artificially.

    Seems not many are complaining that their cheap laptops are built from cheap labour, or cheap shoes. Take a look at the balance of trade for the countries of the world. The US and UK are net importers. China and Taiwan are net exporters. One should consider the long term consequences of this pattern.

    We have exploited the disparity for a long long time.

    When the pony comes home, pay up, pay up, pay up.

  • Why? (Score:5, Insightful)

    by DAldredge (2353) <SlashdotEmail@GMail.Com> on Monday April 12, 2004 @12:25PM (#8838404) Journal
    Ask them this, "Why aren't high level executive jobs outsourced?"
  • by Killswitch1968 (735908) on Monday April 12, 2004 @12:26PM (#8838416)
    If there's on class of people that is still heavily discriminated against, it's the rich. Let's look at your points:

    1. America invests more in European nations and Canada than third world nations. So they aren't discriminately trying to destroy the 'working class', but trying to see who is willing to do the best job at the lowest price.
    Finally aren't all those Indians 'working class' as well? What about their life? Or is geocentrism clouding that obvious reality?
    2. Don't the poor have this same ideal, they just suck it? This is simply idiotic bigotry against rich people. Some people are rich because they earned it, and some people aren't. Similarly, some poor people are poor because they deserve it, and some aren't. Get over it.
    3. Capitalism is good for all of us in the sense that every other economic system has been terrible. Capitalism is not perfect, it's simply better than the alternatives.
    4. WRONG. If you were to exile all 'rich' people in American to other countries we'd all be much worse off. People aren't poor because rich people are 'exploiting' them.
    Stop foisting blame upon others and take responsibility, and maybe a few economics classes while you're at it.
  • by ajs (35943) <<moc.sja> <ta> <sja>> on Monday April 12, 2004 @12:28PM (#8838440) Homepage Journal
    Note: I would not put much stock in the CNN list when it comes to VA. I'm not saying that they DON'T outsource, but VA bought machines that were assembled overseas to re-sell in the US, and that's not quite the same thing, IMHO, as laying someone off in order to send their work overseas.

    Now, if VA is *currently* sending work overseas, I'd be interested in hearing about it from the horse's mouth... horse?
  • by technos (73414) on Monday April 12, 2004 @12:30PM (#8838462) Homepage Journal
    Toyota and Honda have the highest percentage of US made parts in them last I checked. Plus they're assembled right here in the US. Big Three? Mexican and Canadian parts, lots of Canadian assembly.. There's a federally required paperwork on all new cars that shows where they came from. Go to one of those combo dealers, (You know, one of those Buick/Honda/Chevrolet/BMW megadealers) compare your average Honda Civic with a Chevrolet or Ford..

    (An oddity I noticed.. The Big Three only go so far as say "US/Canadian parts content" where the Honda I looked at listed them as seperate entries.)
  • by Grishnakh (216268) on Monday April 12, 2004 @12:32PM (#8838493)
    Not only that, American labor (non-union, at least) is actually cheaper than Japanese labor.

    The problem, the way I see it, is that there's a difference between first-world countries (Europe, Japan, US) trading with each other, and us trading with third-world countries.

    If we buy Japanese or European products, we can feel safe that we're buying from companies that compete on a level playing field with our own: the cost of living is roughly comparable, and environmental and labor laws are fairly similar. Companies in Japan or Europe aren't able to lower their prices by simply hiring sweatshop workers or dumping toxins in the nearest river; they have to do things properly and keep themselves efficient.

    But when stuff gets outsourced to third-world countries, these protections are absent, which allows companies there to keep their costs extremely low. How can an American manufacturer compete against one that can pay their workers pennies a day, and dump their waste wherever they please?
  • by laigle (614390) on Monday April 12, 2004 @12:33PM (#8838505)
    I'd say it seems outsourcing CAN work both ways. Japan is a good example of where outsourcing does work. Two nations with strong trade ties both derive benefits from outsourcing labor. Japan doesn't just get cheap products, they get more market access for their goods as well.

    But look at somewhere like El Salvador. If you ship a car plant there, we get cheaper prices on labor. But we don't get the subsequent increase in revenues because El Salvador doesn't represent a good market for American cars. So the net effect is to push down wages at home and ship our investment capital overseas. The benefit that gets touted is usually prices, but the truth is that most goods maintain price levels because they were within the public's buying envelope anyways. It's only the high end luxury goods that get their prices lowered.

    This is why bilateral, negotiated trade is the way to go. It doesn't make sense to have the same trade policy with every country.
  • by AresTheImpaler (570208) on Monday April 12, 2004 @12:33PM (#8838507)
    and I might add that, in the US at least, the education is going down. Being one if not most powerful nation, we should not allow this to happen. We have too much to lose by doing so.
  • Re:What field next (Score:5, Insightful)

    by jasno (124830) on Monday April 12, 2004 @12:34PM (#8838522) Journal
    You covered most of what I was going to say but let me elaborate a bit.

    Most economists/capitalists used to say that the market will sort this sort of thing out. Their highly simplified models of humans tell them that when labor markets shift and jobs go overseas, unemployed workers can simply retrain. However real people aren't always retrainable. Sometimes the 52 year old factory worker can't go out and learn something new. Also, most jobs with a similar skillset might become filled rather quickly. For instance, many people suggest unemployed IT workers should start a local IT support business. That may work for a while, but soon that market is saturated.

    I think in the end there is a real unavoidable cost for outsourcing and it would be great to hear an economist admit it instead of simply glossing over it with tales of the invisible hand. Then we can consider what measures society/government can take to bridge the gap between economic theory and reality.

    I'm not against outsourcing, however I think there needs to be a great deal of focus on retraining, extending unemployment compensation, incentives for early retirement... whatever a more detailed study than I'm willing to undertake would prove effective in helping the newly unemployed.
  • by the argonaut (676260) on Monday April 12, 2004 @12:35PM (#8838528) Homepage Journal
    . . .how offshoring is helping (or hurting) the 1) corporation, 2) worker, 3) consumer.

    How about instead we just ask how it's helping or hurting people. The well-being of the corporation is irrelevant, since a corporation is a means not an end, or at least that's the way it should be. The purpose of the corporation should be to improve the lives of people, and should corporations fail to achieve that, they should be reformed or abolished. If corporations are hurting but the overall lot of humanity is improving, then so be it. I can certainly live with that.
  • by MORTAR_COMBAT! (589963) on Monday April 12, 2004 @12:37PM (#8838574)
    Think about it, even reporters, lawyers and medical work is being outsourced to other countries.

    Which is why we should tariff the import of intellectual property. Businesses want their intellectual property protected just as if it were actual physical property (DMCA, copyright law, patent law, etc), but they import intellectual property in the form of code, legal advice, chemical formulas, genetics research, etc, into the country without paying any value-based tariff.

    Either it's property or it isn't. If it is, keep your copyright and patent laws, and pay up when you bring this property into the United States just as you would if you brought a truck load of goods. If it isn't, then say goodbye to its legal protection, and finally say hello to inexpensive AIDS medication, "legal" pirate operations for CD and DVD sales, etc.
  • by gatkinso (15975) on Monday April 12, 2004 @12:40PM (#8838600)
    ... and ask why it is a priority of the Ehrlich Administration to outsource as much Maryland state government work as possible overseas.

    Yup, it's true, and I have the letter from one Boyd K. Rutherford (Secretary of General Services) to prove it.

    He will regret ever sending that letter!
  • War? (Score:2, Insightful)

    by DAldredge (2353) <SlashdotEmail@GMail.Com> on Monday April 12, 2004 @12:45PM (#8838654) Journal
    Ask this? What are you contigency plans if war breaks out between India and Pak or India and China?
  • by gfxguy (98788) on Monday April 12, 2004 @12:46PM (#8838670)
    Perhaps wal-mart is the largest retailer is because a large portion of it's customers can not afford to shop at other stores?

    But Walmart is still giving people what they want - it is obvious that lower prices are more important than the perceived threat to their communities, or they wouldn't shop there. I answered the question: what responsibility does the company have to the consumers in the nation to which it supplies goods? And let me tell, a new "Super" Walmart opened recently in my community, and while I haven't perused the parking lot, I need to pass by it. It has significantly altered traffic patterns (to their detriment), and I see all manner of cars going into the parking lot: from old beater Ford Fiesta's to Lexus SUVs. People ARE CHEAP.

    It's usually a catch 22: companies can outsource overseas and give the consumers the lower prices that the consumers are demanding, or they can keep higher prices and perhaps advertise that the items are 100% locally made.

    Let's be honest, if they do the latter they will lose money and eventually go out of business because competitors are charging less. The consumers demand the cheapest prices. It's been shown time and again.

    Let's look at the airlines, for example: how many people pay for first class? How many airlines have cut food service? How many have reduced row spacing to cram in more people? We all complain about it, but then we get the absolute cheapest price we can. When most people get a ticket, what is their first question? Is it "how much legroom on your planes?" Please.

    People, in general, are just not being realistic. They want low prices, but they want to keep the higher paying jobs here. They want more room and better service on the plane, but they only buy the cheapest ticket they can find. They want Walmart prices, but then complain that Walmart is ruining their community. Too bad... pick one and suffer the consequences. We already have; the American consumer has spoken, and he wants the cheap price even if he's treated like crap to get it.

    This may not represent you, it's certainly doesn't represent me (there's a number of stores I will not shop at for these reasons and more), but it IS the majority of American consumers. They demanded Walmart, they got it, and they should stop whining about it.
  • by Saeed al-Sahaf (665390) on Monday April 12, 2004 @12:48PM (#8838694) Homepage
    Which is why we should tariff the import of intellectual property. Businesses want their intellectual property protected just as if it were actual physical property (DMCA, copyright law, patent law, etc), but they import intellectual property in the form of code, legal advice, chemical formulas, genetics research, etc, into the country without paying any value-based tariff.

    Bingo! It's a double standard. IP is now an imported product just like everything else we consume. We as a nation (and I understand that not all Slashdot readers are from the USA) need to look out for and support our "middle class". If this means making it cost more to "outsource" and thus keep more jobs here, it's something we need to do.

  • by DumbWhiteGuy777 (654327) on Monday April 12, 2004 @12:48PM (#8838702)
    What has the current US administration done to effect outsourcing, and what viable options could they do in the future to fix it?
  • by jedidiah (1196) on Monday April 12, 2004 @12:49PM (#8838718) Homepage
    All ivory tower economist fantasies.

    The real issue is gross domestic salary. Is the buying power of American consumers at large at least remaining steady or is it in rapid decline?

    What is the social impact of retraining highly experienced specialists that may have spent 10 or 20 years developing their skills? What is the economic impact when those people suddenly can't continue the level of consumption they had previously?

    What do we do when the tradesmen and laborers that those professionals allowed to be employed are also on the unemployment line?

  • by vsprintf (579676) on Monday April 12, 2004 @12:50PM (#8838729)

    The responsibility to give them the low prices they demand, or go out of business (because no will buy their higher priced products) and cost the nation even more jobs.

    Given that logic, every American worker should be replaced because someone in the world will work for less, and some company might save a nickel. B of A was highly profitable when it began outsourcing jobs; they were in no danger of going out of business.

    So, if it really bothered people, back in the 70's (anybody but me remember way back then?), when the U.S. automotive industry was on the verge of collapse from competition from foriegn competitors. How did they survive? Was there a groundswell of patriotism that caused people to buy higher cost, lower quality products? Keep dreaming.

    Yes, I remember. The government placed quotas on foreign imports. The government raised tariffs on foreign imports. The government bailed out Chrysler with $4 billion. The difference is that back then it was the American companies being hurt. Now it's just the American worker being hurt by American companies, and that's okay with the government.

  • The key question (Score:2, Insightful)

    by Daulnay (695892) on Monday April 12, 2004 @12:51PM (#8838742)

    Supporters of offshoring like to say that "everyone benefits" from the increase in economic efficienty. But the economic theory of trade doesn't say that, it says that overall the world benefits. There are important caveats:

    1. The benefit does not have to be shared between the two (or more) countries involved, depending on circumstances.

    So, who *is* benefiting from offshoring to India and China?

    2. Within a country, the 'plentiful' factors of production usually benefit, but the 'scarce' ones see their share of the pie shrink. If the pie grows enough, the 'scarce' factors see a gain, but it is certainly not a given. [Scarce and plentiful are relative terms. A country can have a high proportion of educated workers, like the U.S., and still have a shortage compared to say, India or China.]

    In the U.S., who is going to benefit (what factors are 'plentiful')? Who is going to -- relatively -- lose out? How badly are the 'losers' going to suffer? How large is this group going to be? Should we do anything to help them out?

    Is the current situation different from what happened with manufacturing jobs going to Mexico under NAFTA? How, aside from it being white-collar work rather than manual labor?

    Is the current situation -- free trade with India and China -- any different from the migration of jobs to 'low-cost' Ireland a few years ago? How?
  • by gfxguy (98788) on Monday April 12, 2004 @12:54PM (#8838783)
    I think the biggest reason wal-mart is so successful is that people are either uninformed as to their business practices, or they don't care about anything more than their own bottom line.

    That is exactly my point. The question was what responsibility does a company have to the consumers buying the product. In other words, a company employs workers from some nation, and they sell products in that nation and make a profit. Great. However, along comes another company that uses outsourcing (or perhaps is simply entirely located overseas), and offers a similar product for less money.

    The question is, which product will the consumer buy? The answer, in general, is that people buy the cheapest product that suffices. Is it always true? No, but it is almost universally true.

    I mention the auto industry because it was the same thing: here the U.S. companies employed, or kept employed, tens of thousands, if not hundreds of thousands, if not millions of people in the U.S. When cheaper cars came along, were they rewarded with loyalty, or did people start buying the imports? Granted, the imports ALSO had better quality, but be realistic and ask yourself, if the quality was the same, which ones would the American public buy?

    I answered the question: the company needs to satisfy the consumers in the country in which it sells it's products. If that means lowering prices by outsourcing, then the consumers have no right to complain as they are the ones demanding the lower price.
  • Re:What field next (Score:5, Insightful)

    by johnjay (230559) on Monday April 12, 2004 @12:56PM (#8838806)
    A friend of mine tried working for a registry. The hospitals in the area would call up for 15+ nurses just to make sure they had enough to cover the shifts of nurses who called in. When the hired employees showed up for their shifts, the registry nurses were told to leave. No guarantee of work or anything. Sounds even worse working for a registry than it is to work for one hospital.

    I don't know if my friend is still working for a registry. I know she started looking to get a regular job as soon as she realized how messed up the system was. I don't see how registrys can keep treating their nurses that way and hope to retain employees.

    The situation with nurses seems ripe for unionizing--high demand for workers and poor treatment of employees.
  • by Anonymous Coward on Monday April 12, 2004 @12:57PM (#8838817)
    Joe Smith started the day early having set his alarm clock (MADE IN JAPAN) for 6 a.m. While his coffeepot(MADE IN CHINA) was perking, he shaved with his electric razor (MADE IN HONG KONG). He put on a dress shirt (MADE IN SRI LANKA), designer jeans (MADE IN SINGAPORE) and tennis shoes (MADE IN KOREA). After cooking his breakfast in his new electric skillet (MADE IN INDIA) he sat down with his calculator (MADE
    IN MEXICO) to see how much he could spend today. After setting his watch (MADE IN TAIWAN) to the radio (MADE IN INDIA) he got in his car (MADE IN GERMANY) and continued his search for a good paying AMERICAN JOB.

    At the end of yet another discouraging and fruitless day, Joe decided to relax for a while. He put on his sandals (MADE IN BRAZIL) poured himself a glass of wine (MADE IN FRANCE) and turned on his TV (MADE IN INDONESIA), and then wondered why he can't find a good paying job in ..... AMERICA .....
  • by TopShelf (92521) on Monday April 12, 2004 @12:59PM (#8838831) Homepage Journal
    "Hmm, I didn't realize a owning Toyota was a social statement."

    While most registered voters don't actually take to the polls on Election Day, your purchasing activity on a daily basis is an incredibly powerful statement of your personal preferences. Corporations spend billions of dollars annually trying to better understand these preferences and more profitably satisfy them. What people fail to realize in this whole debate is that "fault" (I prefer to think of it as causality) lies not with the PHB or the low-paid outsourcer, but rather with the Almighty Consumer, which sends a clear message to the marketplace: Price Matters Above All Else.

    If "Buy American" campaigns actually resulted in people changing their spending habits, you'd see offshoring initiatives dry up. But they don't - given the choice, consumers have consistently gone for lower prices instead.
  • by CatGrep (707480) on Monday April 12, 2004 @01:04PM (#8838891)
    1. CEO's tend to make the argument that they need to outsource in order to compete with their competitors who are outsourcing. (sounds an awful lot like an argument between kids on the playground - "he's doing it too!" - where nobody wants to take responsibility). Given that CEO salaries run into the $millions (typically 20 to 40X the pay of their average employees) why don't CEOs consider cutting their own salaries in an effort to remain competitive?

    2. Many unemployed and about-to-be-unemployed US engineers would be happy to work for less money (within reason)in order to keep their jobs, however when this is suggested to companies the companies usually choose to go with outsourcing. If an engineer is willing to take a 30 - 40% pay cut to save his/her job, why isn't this offer taken seriously by most companies?

    3. (related to 2) It's quite clear that if we want to continue working in the engineering fields in America that we'll either have to become much more productive (2 - 3X) or we'll have to accept much lower wages (or a combination of the two). By some measurements we're already much more productive than our overseas counterparts by virtue of the fact that we have more experience with real projects, so it all comes down to money. What can American engineers do to lower their cost of living in order to try to compete with 3rd world salaries?

    4. Most offshoring advocates say that we need to just be patient as we await the 'Next big thing (TM)' that will be invented in America (they have a lot of faith). Any idea what the 'Next bit thing' will be and what do we do in the meantime?

    5. (related to 4) In the software arena, most of the offshoring advocates say that US developers need to 'move up the foodchain' into project management. Given that you never need anywhere near as many managers as you do managees, what how will most US developers 'move up the food chain'? (perhaps they'll become hunters)

    6. (related to 5) What if you'd much rather develop code than manage projects?

    7. For outsourcing advocates: Why not make the argument that we should outsource every possible US job to cheaper, lower labor-cost countries and then bring in 'guest-workers' to fill the positions that can't practically be outsourced? It seems that the outsourcing advocates would find this a favorable plan since there would be so much potential money savings. If money savings is the primary economic motivator then this seems like a logical plan, however, what do we do with the millions of US workers that would be put out of work in this scenario?

    Commentary: The outsourcing advocates take a very narrow view of economics. To them cost-cutting is the primary motivation for doing anything - "if it'll save a buck, then do it" is their motto. However, it isn't clear that the money savings from outsourcing white collar jobs are actually going to be able to counter-ballance the economic devestation brought on by widespread offshoring. So what if US corporations suddenly become wildly profitable (for a quarter or two) while millions of workers are put out of work. Eventually those millions of unemployed workers won't have the money to buy the products of the wildly profitable corporations and profits will go down. I'd rather see corporations break even while providing good jobs to millions, than see them be wildly profitable but providing no jobs to US workers. Oh, and if millions are unemployed, who is going to pay the taxes to support the schools that we supposedly need to train workers for the 'jobs of the future'?
  • by gfxguy (98788) on Monday April 12, 2004 @01:11PM (#8838955)
    Given that logic, every American worker should be replaced because someone in the world will work for less, and some company might save a nickel. B of A was highly profitable when it began outsourcing jobs; they were in no danger of going out of business.

    That's a ridicules extreme, something only someone losing an arugment would make. There is always a balance somewhere - sometimes we swing too far in one direction or another (B of A might be a good example of going too far), but marketplace keeps searching for that balance.

    Yes, I remember. The government placed quotas on foreign imports. The government raised tariffs on foreign imports. The government bailed out Chrysler with $4 billion. The difference is that back then it was the American companies being hurt. Now it's just the American worker being hurt by American companies, and that's okay with the government.

    You are proving my point. Consumers were demanding cheaper imports. Did it matter to the consumers that American jobs were being lost? It's the hypocrisy of the American consumer to demand the lowest prices and be paid the highest wages.

    And you are failing to see (or choosing to ignore) that the American worker IS the American consumer. For the most part they are one and the same. They hypicritically demand the lowest prices while demanding the highest wages and job protection, and the vast majority will go to Walmart and buy something made in China if the similar item made in the U.S. costs more.

    I'm not saying it's black and white - there are certainly a lot of greedy bastards at most companies. I'm not blind to that fact, but we are all consumers, and the question is: "What sort of responsibility to create jobs should a company have to the nation that purchases/has a demand for the goods they're producing?"

    The answer is NONE if in doing so they will go out of business and lose ALL the jobs company creates in that nation.

    The answer is that there is personal responsibility: your actions have consequences. If you buy from a company that is outsourcing, you are only going to encourage it. Enough people have encouraged it that it is now commonplace. And now all those people that encouraged it are whining and complaining about it.
  • by zerochance (716727) on Monday April 12, 2004 @01:12PM (#8838964)

    As someone within a company that is slowly shifting to offshore IT workers (to complement the offshore manufacturing workers who make almost all of the products sold in our stores) I can tell you this is 100% crap. Offshoring is not about moving jobs to more knowledgable workers, it is about moving jobs to cheaper workers. When you need a horde for a particular project or task, you always go with the lower cost solution. Remember, quantity of graduates says absolutely nothing about the quality of such graduates.

    Oddly enough, we've had to pull back in a few cases where the offshore workers knowledge and experience weren't up to the tasks (fairly simple DBA maintenance support). It seems that the sharp DBA we were shown and worked with at the start of the engagement, was replaced with a week of the start by a trainee of limited language skills. It kind of makes you think that maybe the whole offshoring thing is just some scam to rake in the bucks from gullible idiots.

  • Lower prices! (Score:5, Insightful)

    by benwaggoner (513209) <ben.waggonerNO@SPAMmicrosoft.com> on Monday April 12, 2004 @01:12PM (#8838971) Homepage
    Er, no, that's no the way it works.

    Yes, moving a car factory to El Salvador will cost some US jobs in the short term. But no, there will be a price drop (or a price/performance improvement) in cars available in the USA. There is the idea floating around that outsourcing means that companies just keep the profits, and that money just vanishes from the economies somehow. However, in a competitive market like cars, some company is always willing to trade lower profits for increased market share. This can take the form of selling the same car for less, or more car for the same price. But this puts pressure on everyone else to lower prices.

    For example, compare how much car you can get for 1/4th of the median family income today compared to a few decades ago. A 2004 Civic is a vastly better car than anything one could buy in 1972.

    And look at how much better US made cars got in the decade after the Japanese import boom started. While it might have been painful for the workers in Detroit, for the vastly greater number of US car drivers, imports and outsourcing have been a HUGE gain.

    The thing about free trade is that the pain is concentrated, but the benefits are diffuse. But the aggregate benefits always (and yes, I mean ALWAYS - I don't know of a single counterexample in the last few thousand years) outweigh the aggregate losses.

    The wage differential between the USA and India is a reflection of our greater wealth and productivity, not a threat to our wealth and productivity.
  • by Anonymous Coward on Monday April 12, 2004 @01:13PM (#8838972)
    How can anyone claim a nation of upper managers is viable with a straight face?

    Easy.

    It's a lie!

    When the system DOES collapse and reduce the average American to pre-WWI living standards.. do you think these advocates will STAY in the US out of a sense of civic duty? Not the ones who have the economic power to move, no fucking way.

    These yellow-bellied mercenary traitors will bail for another country. I'll bet China could "win" by promising they never have to pay taxes, ever.

    Sound unfair? Well, so are Bennedict Arnold CEO's who'se idea of patriotism is to stick a pin on their collar, and profit-take on the war..

  • Productivity (Score:5, Insightful)

    by benwaggoner (513209) <ben.waggonerNO@SPAMmicrosoft.com> on Monday April 12, 2004 @01:19PM (#8839038) Homepage
    Well, unskilled labor manufacturing is leaving in droves, and has been for decades. This is probably a good thing in the long term - you want pollution producing industries here?

    The way American companies compete against foreign companies is the same way we have for centuries - innovation and productivity. Even though Ford could build a car plant in Mongolia and pay 1% of UAW wages, they'd lose their shirt. Shipping costs to consumers and from suppliers, lack of a trained labor force, etcetera would cost them much more than they'd save.

    Now, making plastic toys? Yeah, that's in China now, for the reasons you cite. But how is that a bad thing? Have you SEEN the toys you can buy for $20 now? Unbelievable! What do you think it'd cost to build, say, a Hoberman Sphere with US labor? How many fewer would get sold at that price. Not a lot of US jobs saved, but Hoberman is a lot poorer. And he lives in the USA.

    As for environmental protections, we certainly need better global environmental controls. But trade isn't the problem or the solution there. Even if we had complete trade barriers, greenhouse gasses don't know borders.
  • Re:Why? (Score:5, Insightful)

    by Rupert (28001) on Monday April 12, 2004 @01:21PM (#8839057) Homepage Journal
    In many countries, CEOs work for a fraction of the cost of an American CEO. Despite this disparity in cost, foreign CEOs produce work of comparable quality, as measured by the performance of the companies they head. So:

    where are the H1-B CEOs?

    which US companies have relocated their CEOs to foreign countries, rather than just their head office?

    When we know the answers to these questions, we will... ...well, we'll sit down and cry into our beer. That's what we'll do.
  • by gfxguy (98788) on Monday April 12, 2004 @01:21PM (#8839066)
    I'm wondering then, where the problem begins.

    So if VA were to start off assembling computers themselves, decide they can't compete financially with companies that are buying assembled computers from Taiwan, so they close their assembly line and buy from Taiwan, then that's bad.

    However, if they never employed anyone to assemble computers in the U.S. at all, then that's OK?

    How about this: they keep assembling computers in the U.S., and go out of business because everyone is buying from vendors who "outsourced" to Taiwan?
  • by Anonymous Coward on Monday April 12, 2004 @01:29PM (#8839142)
    Very simply, do overseas workers cause more problems than they create?

    and, perhaps more importantly, do companies just beginning to outsource have any tools in place to measure effects of this type?
  • Re:Lower prices! (Score:4, Insightful)

    by laigle (614390) on Monday April 12, 2004 @01:29PM (#8839146)
    No, there won't be a price drop. Prices are established by the market, not arbitrarily set by the manufacturer. A Ford Focus will cost as much as people are willing to pay for it, given demand and supply. Moving the plant to El Salvador changes neither supply nor demand. You aren't opening a new consumer base, and you aren't getting yourself a way to fulfill previously unfilled demand. It only lowers the price of making the good, thus increasing the profit margin.
  • by Money for Nothin' (754763) on Monday April 12, 2004 @01:31PM (#8839171)
    Question 1: Retrain in what? Will the new jobs created by trading our jobs with India be created here?

    During the 1980s, blue-collar manufacturing workers whose jobs were offshored were told to retrain in some other area, particularly knowledge jobs. Some did, most others moved into other blue-collar jobs such as construction, automobile repair, and other such jobs which aren't so easily offshorable.

    Today, the message from economists and CEOs is the same: retrain in some other field. We know that jobs in programming, software-engineering, and most other fields of engineering (electrical, mechanical, chemical, etc.) are being offshored.

    So what exactly does one retrain in? Let's look at the options:

    * Biotech -- is there any reason that new biotech jobs can't be created overseas instead?
    * Nanotech -- is there any reason that new nanotech jobs can't be created overseas instead?
    * Medicine -- oooh, wait, radiology is already being offshored [cbsnews.com], and so are surgical jobs [worldnetdaily.com]

    Note that those are all technology-oriented jobs which do not require one's presence. What technology-oriented jobs require one's presence then?

    * Auto mechanic -- for the few geeks who can tolerate working outdoors, with their hands, getting dirty, etc.
    * IT technician -- the basically blue-collar guys who schlep computers around, run cables, and replace bad hardware
    * Nuclear engineer -- because It Is Stupid to not have people on-site to prevent a nuclear plant from going boom in the event of an emergency

    So, can the hundreds of thousands of software geeks who have had their jobs offshored retrain to be auto mechanics? Even if they wanted to, I doubt they could, and as cars become increasingly-reliable, demand for those jobs will decrease. IT technicians? We have a glut of them as it is. Nuclear engineers? This nation is too scared of nuclear power (thanks to Chernobyl and Three-Mile Island) for there to be much of a market for nuclear power.

    So, what do we do? Just what jobs are there beyond "knowledge" jobs? If you assume that international trade (and preferably free trade) is a good thing -- as I do, due to comparative advantage -- then you must admit that many of these jobs can go overseas now thanks to the Internet's ability to send data worldwide at dirt-cheap prices.

    Now, the standard economist's response to that is that "new jobs will be created as a result of trade." On the face of things, this is true.

    But return to the fact that the Internet makes all jobs which deal primarily with information (instead of people) offshorable. Given that fact, what reason is there that the new jobs -- which WILL be created, just as economists tell you -- won't be created overseas, but will be created here in America? Again, is there any reason the new jobs -- which we can reasonably expect to see in biotech and nanotech -- won't simply skip the step of being created in America and instead get created in India first?

    I wrote an email to one of my economics professors asking that question (and many others) recently. His response? "Gee, you know that's what interests me about economics so much - why do these things happen?" But he never really answered the question.

    If a college professor in Econ. doesn't know the answer, who does?

    Question 2: Education.

    Often the advice to unemployed IT geeks is to retrain. Retraining requires education. Education requires years of time and money.

    Simple question: Where does an unemployed IT geek *get* that money to retrain with, given the rapidly-rising costs of a college education?

    Moreover, how can America -- which largely does not subsidize post-secondary education -- compete with foreign nations which do subsidize post-secondary education?

    So long as this educational barrier-
  • Analyst on CNBC (Score:4, Insightful)

    by jcdick1 (254644) on Monday April 12, 2004 @01:31PM (#8839172)
    I can remember a few weeks ago - and this is purely anecdotal on my part - watching CNBC on the TV in the Cafeteria at work, and they were interviewing a couple of stock analysts about the "recovery" and offshoring labor, and one of the guys made a comment that made everyone in the room sort of gasp.

    He said, paraphrasing, "America, which for the last fifty years or so has been consuming vastly greater amounts of resources than they produce, has had an artificially high standard of living. Its going to be painful until the American lifestyle comes more in line with the rest of the world."

    Just thought I would relate that observation. It seemed appropriate when the topic of outsourcing and offshoring comes up. You can take it as either playing devil's advocate, or something to get you motivated to ensure that it doesn't happen.
  • Re:What field next (Score:4, Insightful)

    by Golias (176380) on Monday April 12, 2004 @01:33PM (#8839187)
    What field should the millions of displaced American IT workers get trained in?

    Pyramid Schemes. I will be happy to train you in the lucrative field of scamming people out of their money for $2000 + 10% of what you eventually collect from the trainees you go out and recruit for yourself (and 10% of your 10% take from them, and so on and so on...) If you are at a loss as to who to recruit, start with everybody you've ever known. Once they stop talking to you and begin to specifically dis-invite you from parties, turn to spam. Bothering people in coffee shops is good, too. It can't fail!!!11!1!

    Or you could teach English in Japan. It hardly pays anything, and the hours are insane, but rumor has it that American men are considered very sexy over there... even the geeky ones! It's a nerd paradise, where grown-ups play video games, everybody has cell phones, and there's no shame in loving bad J-pop music and anime! Woo-hoo!

    Or you could just stay in the IT industry and wait another month or two. Seriously now, the company I work at is already hiring a bunch of new people, and I hear from the people on my "job network" that the situation is similar all over the place right now.

  • Re:What field next (Score:2, Insightful)

    by MarkRebuck (590314) on Monday April 12, 2004 @01:37PM (#8839236) Homepage
    If you look at the personality types which are well suited to nursing, they are almost the exact opposite of those well suited to engineering. In myers-briggs terminology, nursing is usually for ESFJ (extroverted, sensing, feeling, and judgemental) types, and engineering is for INTP (introverted, intuitive, thinking, and perceiving) types... So asking an engineer to become a nurse is very much like asking them to change the very nature of who they are. It won't work.
  • by benwaggoner (513209) <ben.waggonerNO@SPAMmicrosoft.com> on Monday April 12, 2004 @01:37PM (#8839238) Homepage
    Well, in many senses, especially the Marxist, the working class is largely vanishing as a class in the USA. The grandchildren of post-WWII auto workers go to college now, and work in service industries. Really, if you did a poll, how many people in the US call themselves "Working Class?" And how many of those are really college graduates slumming for a couple of years? Social mobility really keeps traditional class boundaries from being one of the major divides in US politics today. In US history racial and cultural issues have been much more divisive and persistent.

    Unionized workers think of themselves as working people, but middle class. Poverty is a different issue. But the poor mainly hope to not be poor, and don't have a lot of personal allegiance to the class of the poverty-stricken.

    Also, I don't think it is a widely held view that the concentration of capital is good for all of us. This is why most honest economists like high inheritance taxes, to prevent multiple generation accumulation of wealth.

    In fact, capital is pretty widely distributed these days, with 401(k)'s, pension plans, and home equity.
  • Explain me clearly (Score:3, Insightful)

    by melted (227442) on Monday April 12, 2004 @01:37PM (#8839244) Homepage
    Just how outsourcing one of the highest-margin industries to another country and depleting hi-tech talent pool that takes decades (and shitloads of money) to rebuild helps the US economy.

    It'd be also cool to hear someone from Federal Reserve System explain how long does this country expect to live in prosperity by simply exporting national debt while not manufacturing the actual _stuff_ (be it IP, goods, natural resources, etc.). There's gotta be a breaking point to this trend.
  • by krb (15012) on Monday April 12, 2004 @01:41PM (#8839292) Homepage
    For every drug that comes to market there are about 10 that do not. The drug companies have to make back their money somehow.

    Funny you should phrase it that way... the current music and pharm industries aren't that different after all. For every album that turns a profit, there are dozens that lose big. The record companies make their money on a very small percentatge of their catalog, which get big enough (due to marketing dollars, in large part) to offset the losses they're dealt by the vast majority of their contracts.

    The scale is different, but the model is very, very similar.

    Incidentally, the reason they're similar is that 50+ years ago, those two bit idiots couldn't get a hold of good equipment and the cost of production was many orders of magnitude out of normal people's reach, similar to pharma now. The music industry has held tight to their model, past it's sensible end point, because computers and cheap electronics have made production costs negligible... well within the reach of average people.

    I'm not guaranteeing that in 50 years, we'll all have gene sequencers and personally matched pharma, but, technology has a way of obsolescing business models. At some point, laws need to change to reflect new environments.

    People do need to be incentivized to produce... that's a good reason for IP law. But there need to be limits to how much control they have, and for how long, in order for greater society to benefit. The commons always need to be addressed. If the laws benefit the few, to the detriment of the many, then they are unjust, and should be modified.
  • by Anonymous Coward on Monday April 12, 2004 @01:45PM (#8839339)
    >Several overseas employees might cost less and still get the project done.

    With some handholding, maybe. I have yet to see an H1B that can build a production ready environment out for their application, before I die and grow old. I can't help but wonder what is really happening in India, I bet there are a lot of late nights.

    I can build, patch and secure any environment in under 4 hours from bare metal, and I can code 7 languages (C, C++, java, perl, php, vb, we'll count shell and batch as one), and program 5 different databases (oracle, mssql, mysql, postgresql, and access) on NT, 2k, linux and SystemV too : )

    I guess you get what you pay for, and pay for what you get.

    l8,
    AC
  • Insourcing (Score:3, Insightful)

    by jgarzik (11218) on Monday April 12, 2004 @01:45PM (#8839341) Homepage
    In order to provide a balanced documentary, please examine the foreign companies that are "in-sourcing" labor -- shifting labor from overseas into the United States.

    I just heard on the radio (no source mentioned) that last quarter the number of in-sourced jobs was larger than the number of out-sourced jobs.

    Further, please examine the ramifications of protectionist policies, and ask economists about their long term ramifications. There is way too much "outsourcing is evil" or "outsourcing is great" without balance or attribution.
  • by mckwant (65143) on Monday April 12, 2004 @01:48PM (#8839364)
    1. Are companies getting more bang for the buck?
    2. Since NAFTA's initial rush, there are reports of manufacturing jobs coming BACK from Mexico. That "giant sucking sound" that Perot used to describe maquilladora companies running for the Mexican border never really materialized in the volume he thought it would. Also, several of those factories are coming back, as they get better productivity from USians.

      One function of outsourcing is that the labor is cheaper, which shows up quickly on the company balance sheet. If revenue is stable, and costs go down, profit goes up. What doesn't show up quickly is ineffeciency. e.g. Time lost due to cultural differences, time spent rewriting poor code, the cost of having to negotiate every change request, and so on. While these costs exist for locally sourced companies, I'd argue they're probably lower.

      It's not strictly the price of the labor that's at issue, it's performance per dollar spent. Given the economic mess, it's all about the price of the labor right now, but the efficiency argument will start creeping back in over time.

    3. Is your penny saved actually spent locally? Or, restated, how often is that same cash going to be spent by subsequent purchases?
    4. The multiplier is the key here. Does the money just go back into company coffers, or is it actually distributed?

      If it's held as cash by the company, then its effect is negligible, except for the value of the company's equity. It's not used to buy things in the local market, which contributes to the bottom line (and profits, and eventually more purchases) of the various merchants, and so on.

      If it's distributed as dividends, is that money used to buy goods in the local market, or reinvested? I would suggest that the supplyside economic model can be criticized here, as dividends paid to stockholders at large might tend to be reinvested (sometimes automatically, sometimes not), and the economic multiplier for that cash is very, very small.

      If it had actually been used to pay a local programmer, who was using it to live, then the majority of the money is probably circulating freely, having been spent with merchants.

      We can get into issues with the WalMartization of the planet here, but let's not.

    5. Are we helping other countries' economies?
    6. Again, this is arguable. Sure, we're helping them in the short term, but we've all heard stories of how the Indian outsources are getting undercut by the Czechs, or the Philipinos, or the Malaysians, or whomever.

      I'm not sure, but I think this is the core of the globalist "race to the bottom" argument. If you assume that the company only cares about workers/$, then it would be logical for the jobs to drift towards the cheapest labor. Problem is, the cheapest country for labor changes periodically, and suddenly you have several countries vying for the lowest price. Does this unstable economic injection actually help their economy in the long run? Tough call.

  • by Anonymous Coward on Monday April 12, 2004 @01:55PM (#8839447)
    ""Why isn't it illegal to import people from India on 12 month visa to fill positions that get 400-500 resumes from local people, when they are posted according to US law? You cannot tell me that there isn't qualified NT admins in ANY local area, and yet these positions have imported labor."

    Why should this be illegal? Of course it should not be. The chances of getting the best employee for the job are increased by expanding the pool you are looking at.
  • by ekuns (695444) * on Monday April 12, 2004 @01:56PM (#8839451) Journal

    What elitist crap. Ignoring such a pejorative term as third world, how then does a "third world" country improve its lot if the world's richest nations refuse to do business with the 3rd world country?

    Wow, calm down! You're only the second person I've encountered who thought the term "Third world" was pejorative. I rather doubt it's being used in any such sense here.

    Anyway, I don't believe anyone (a few extremists ignored) is talking about "First" or "Second" world nations simply refusing to do business with other nations. I believe that people are rather talking about the desire to have economies that are sustainable for all countries involved. If the US, for example, outsourced all of its skilled labor to other countries where the labor and pollution laws are more lax and salaries are lower, that would have a devestating affect on the US economy. While some business would profit in the short term, they would end up with no consumers.

    THAT concept is what bothers people. If you take it as an elitist or arrogant, you're missing the point of most people's arguments. Of course, there are some who are arrogant or elitist, but I'd bet that most people in this discussion are trying to be reasonable in a topic that causes heated disucssions.

  • Re:What field next (Score:3, Insightful)

    by Kohath (38547) on Monday April 12, 2004 @01:59PM (#8839499)
    What is the next new economy, retail?

    Here's a suggestion: Don't chase the "next new economy". Do something you like. Do something you care about. Do something you're good at.

    If you can't find anything like that, then you're stuck with what you get.

  • Re:Productivity (Score:1, Insightful)

    by Anonymous Coward on Monday April 12, 2004 @02:12PM (#8839635)
    "Now, making plastic toys? Yeah, that's in China now, for the reasons you cite."

    Also most DVD players are made there. I'm not sure how much in the way of skilled labour it takes to manufacture a DVD player, but there are certainly jobs that require a level of skill starting up in China. Also the Chinese government is very interested in improving the educational level of its population such that it can pick up on the next level of jobs as it is aware that the low skill jobs will get offshored elsewhere in time. Maybe they have 20 years, but it takes that long to get a good crop of educated people in the population, so they are thinking ahead.

    With regard to environmental controls, I think the best solution there is to force quotas based on the amount of goods a country consumes, not the amount of pollution it produces per se. If the USA imports goods made in China then in a sense it is offshoring its pollution. If pollution targets are based on the pollution required to produce the goods in the first place, then the USA will be required to put pressure on companies with factories in China (some are US companies, E.g. Fender) to have pollution there reduced. This works no matter where the factories are. Some people complain that somehow China got off scot
    free under Kyoto, when in fact what is happening is that the companies who produce the goods are getting to continue cutting costs by polluting, and the Chinese may ultimately have to pay the clean up costs. The Chinese government is presumably betting that the short term cash injection to get their economy moving, allowing for increased education, is worth the risk of the clean up costs in the future.
  • by theCat (36907) on Monday April 12, 2004 @02:18PM (#8839701) Journal
    That's true. And when the middle managers are outsourced to Singapore then it will be just the upper managers in the US. But what do they really know? All their middle managers are now in Singapore. So the Board will fire the US upper managers and hire replacements in Singapore. But the CEO won't have day-to-day interactions with most of the company at that point. So the CEO will be placed on the Board and all the managment will be from Singapore. Only the Board and most of the stockholders will be in the US.

    20 years later: All the major US IT companies are entirely managed from outsource companies, with only Board and stockholders in the US.

    Then all the rich IT workers in Singapore will buy up the companies in hostile takeovers as aging American stockholders liquidate at a bargain, kick out the Board, install their fellows in leadership...and we will have finally exported wholesale a trillion+ dollar industry in record time. The Roman Empire took several hundred years to pull that off.

    And this is...a good thing? Looks like giving away the farm. Well at least the Singaporians won't contribute to the Republican Party so then maybe we'll elect...oh wait, I suppose they will contribute illegally, or by proxy. Never mind. We really have given away the farm.

  • But there will (Score:4, Insightful)

    by Gorimek (61128) on Monday April 12, 2004 @02:18PM (#8839706) Homepage
    You are essentially saying that manufacturing costs have no impact on consumer prices. To be consistent you would have to claim that consumer prices would not rise if manufacturing costs increased. You could disprove that just looking at manufacturing costs and consumer prices for pretty much any good, and observe at the canny resemblance. But I'll try with a concrete math example.

    Let's say Volvo sells 100.000 cars a year for $30k that they spend $25k to manufacture. That brings in $500M. They could lower the price to 29k and sell 120.000 cars and make $480M, or they could raise the price to $31k, sell 80.000 cars and make $480M. Clearly they picked the selling price $30k to maximize their profit.

    Now let's say they figure out a way to make the cars for $23k. Selling 100.000 cars will now bring in $700M. But selling 120.000 cars for $29k will make $720M. So they lower the price. It's really quite simple if you look at it the right way.

    The common misunderstanding here is that people think Volvo won't pass on their savings since they're greedy bastards. In actual fact, they will pass on their savings because they are greedy bastards, and will make more profit doing so!

    No, there won't be a price drop. Prices are established by the market, not arbitrarily set by the manufacturer. A Ford Focus will cost as much as people are willing to pay for it, given demand and supply. Moving the plant to El Salvador changes neither supply nor demand. You aren't opening a new consumer base, and you aren't getting yourself a way to fulfill previously unfilled demand. It only lowers the price of making the good, thus increasing the profit margin.

    Put in those terms, prices for a single manufacturers goods are arbitrarily set by it. How much it will sell at that price is determined by the market. That is how lowering costs does increase supply at a certain price.
  • Re:Productivity (Score:2, Insightful)

    by autumnpeople (218378) on Monday April 12, 2004 @02:22PM (#8839734) Homepage
    Your argument has only one flaw, if we outsource all the unskilled labor (and don't forget, call centers count in that bracket), where do the unskilled in the US go? Sure we can say we'll train them up, but there is a certain percentage of the population that does not have the capacity to do highly skilled jobs.

    So what then? Do we create a welfare state where those who no longer can work are supported by those of us who do (at least until our jobs get shipped as well)? It's a nice idea to think you can do away with the unskilled working class, or somehow transform them in to a highly skilled work force. The fact of the matter is that while most of the /. crowd tends to be on the upper end of the bell curve of intelligence, it is a curve and there is a low end, which most people here seem to forget...
  • Re:What field next (Score:4, Insightful)

    by aastanna (689180) on Monday April 12, 2004 @02:26PM (#8839766)
    That's just like in the Grapes of Wrath where all the farmers went to California to pick fruit during the great depression and found that the promises they were getting in Oaklahoma were just to drive down the cost of labour for the fruit growers. Facinating that this still goes on ~75 years later, of course now I suppose people who do this get arrested for RICO violations...if they are caught.
  • With all the talk about how jobs go overseas, most Americans equate offshoring to job losses. No such documentary could be complete without mentioning that on balance, foreign companies created 6.4 million jobs in the US. Exports of US goods to foreign countries made by foreign owned businesses comprise 22% of all us exports. Foreign Direct Investment (FDI) has increased by $82 Bn USD in FY2003, creating 400,000 new jobs. The weak US Dollar combined with our lower taxes is encouraging economic growth so much that companies like Honda and Toyota now make cars for the US market in California and Tennessee - NOT Japan. The EU's OECD is threatening trade sanctions, claiming our lower costs of doing business are a "tax subsidy" (i.e., not overtaxing business is the same as paying their taxes for them...wonderful circular logic).

    Source: http://www.ofii.org/insourcing/
  • Re:Productivity (Score:4, Insightful)

    by benwaggoner (513209) <ben.waggonerNO@SPAMmicrosoft.com> on Monday April 12, 2004 @02:35PM (#8839865) Homepage
    Has no one at Slashdot read David Ricardo?

    Well, probably not.

    People who can't do highly skilled jobs will do unskilled jobs. Pump gas, work on a farm, sort recycling. Or train them. Life as an unskilled laborer in a 21st century first world nation isn't great, but it's a lot better than as an unskilled laborer in the 3rd world.

    Now, as a society, we need to be working hard at reducing the number of people we have who can't do skilled jobs. And that's working to some degree - how many US Citizens are doing migrant farm labor these days? Probably our biggest failure as a nation is not fully funding schools and enrichment programs in poor areas. Even if conservatives want to blame the poor for being poor, it certainly isn't their kids fault.

    But anyway, unskilled labor has been around forever, and most of the jobs they did a long time ago have gone away, and new jobs always show up. Most unskilled workers were farm labor a century ago.
  • Re:Real Reasons? (Score:2, Insightful)

    by gratefully dead (638634) on Monday April 12, 2004 @02:36PM (#8839876)
    This simplification of reality fails to take into account the human aspect of work. Productivity is a nonlinear function with respect to how many hours someone works. Work is more than just pumping out widgets. For example, the well rested and happy programmer is able to come up with a better solution to a problem than the one who is tired, agitated, and obsessed. I noticed that the times that I have breakthroughs are not when I'm furiously concentrating on my work, but instead when I am coming back to it with a clean slate (like in the shower in the morning).

    Likewise, the happy and cordial retailer earns more customer loyalty through his courteous attitude than the retailer who is stressed and exhausted. This same line of reason was used to justify limiting the hours of medical residents to 80 hours a week. Would you want someone who hasn't slept in two days working on you? --I don't think so.
  • Re:Productivity (Score:3, Insightful)

    by benwaggoner (513209) <ben.waggonerNO@SPAMmicrosoft.com> on Monday April 12, 2004 @02:38PM (#8839899) Homepage
    Productivity measured in value added per hour is going up as well. It isn't all about overtime (and hours worked are actually going down a bit in the long term).

    If you work in IT, you KNOW you get a lot more done than 10 years ago. Sure, you might not feel relatively more productive since everyone around you is also having the same gains. But think of your current big project. How would you have done it a decade ago?
  • Re:What field next (Score:2, Insightful)

    by wcrowe (94389) on Monday April 12, 2004 @02:50PM (#8840005)
    I see. So individuals who typically have poor "people" skills, should go from careers in which they rarely deal with others, into a field in which they regularly deal with sick, whiney, helpless people all day?

    Right.

  • My Question (Score:2, Insightful)

    by pturley (412183) on Monday April 12, 2004 @02:55PM (#8840043)
    Manufacturing jobs have been "outsourced" overseas for a very long time. One could say that outsourcing has simply been moving steadily along a continuum from less-skilled to more-skilled jobs (i.e., less-well-paid to more-well-paid). Perhaps this latest wave of concern is not the result of a fundamental change in outsourcing, but is instead just a symptom of its arrival at a particular skill/pay/pain threshold.

    If we're simply experiencing a natural extrapolation of the outsourcing trend, should we react to it any differently than we reacted to the loss of our manufacturing jobs (as painful as that was)? Is there truly a need for any more action/legislation here than we thought we needed when we were losing our steel industry?
  • ask them: (Score:1, Insightful)

    by zogger (617870) on Monday April 12, 2004 @02:58PM (#8840085) Homepage Journal
    1 -if offshoring is so great, why aren't we seeing corporate executives jobs being eliminated and outsourced? Are they trying to maintain the illusion that only the lower level peons jobs are worth of outsourcing to "save money and be cost competitive", but that their "management" jobs are not?

    2--Ask them why average CEO pay is now approaching 1000 times what their entry level employees pay is contrasted with 20 years ago or so when it was around 30 times? Couldn't they maintain the same 30 times level and still be *well* compensated? It seemed to work back then, the "boss class" made more than sufficient money to live comfortably, and the stockholders still made a return.

    3- Ask them don't they have any sense of universal social patriotism for their nation, or are they "citizens of the world" who don't really care about their national neighbors? And if so, ask them why they don't pubicly renounce their US citizen ship and take up citizenship in the nations they move their jobs to?

    4-ask them why before "outsourcing" became popular, that a single (1) average pay blue collar domestic job, not even a white collar, a blue collar, why that level of pay was sufficient to maintain a home, a car or cars, and a family with several children, that that job in most cases provided a nice insurance package and a pension, that the employee could be given a 2 week paid vacation, contrasted with now, merely 20 years later, it takes two (2) such jobs to maintain parity with that time frame, and in a lot of cases without any of the perqs that existed back then?

    5- ask them, and this is extremely critical, WHAT-exactly WHAT do you tell a young person just about to enter the workforce, who is seeing BOTH blue collar AND white collar jobs being outsourced, ask them EXACTLY WHAT that young person is supposed to study or train for. Ask them what sort of "job" they should be specialising in so that they might have a life, WHICH JOBS SPECIFICALLY are not going to be "outsourced"? These CEOs have to remember, when the IT and high tech boom started, it coincided with the dismantling of the blue collar manufacturing jobs, we were PROMISED that these jobs were the replacements, and now THOSE jobs are leaving--ask them-WHAT'S LEFT??? What are they going to LEAVE in the US for jobs in the next one to two decades?

    6- Ask them how it feels to not be looked up to as models of success that most previous generations of people granted successful business people, but to be reviled and distrusted by the vast majority of people now, to be not trusted to either be patriotic nor to tell the truth or act in the publics best interest, only their own.
  • by Clay201 (766249) on Monday April 12, 2004 @03:33PM (#8840417) Journal

    What's wrong with free markets?

    The same thing that's wrong with the Tooth Fairy; they're a nice enough fantasy, they just don't exist.

    No country simply allows market forces to rule; everyone controls these forces as much as they can through tariffs, subsidies, regulation, state ownership, and so on. In countries that have fewer restrictions on what may be bought and sold - i.e. South American and Asian countries forced to "liberalize" their economies - crushing poverty and authoritarian regimes are the norm. And for very simple reasons. If you allow anything to be bought and sold, foreign investors quickly buy up everything worth having; land, natural resources, etc. (Indeed, that's the whole point of "liberalizing" a country's economy; to "attract foreign investment"). That's why we have "outsourcing" (here I'm using the term "outsourcing" to denote *any* job that a US company sends to another country, not just IT or other skilled jobs), because businesses are allowed to move their factories to any one of several dozen countries. That's what we call "investing" in the country even though the companies don't pay much in the way of taxes and their profits go back to their home countries or to banks in the Bahamas.

    If people can't patent things (like AIDS medication) they will not invent it because they will never recoup their R&D costs

    They don't need to recoup their R&D costs because you and I will pay for those through our tax dollars. Science has always been a seven monkeys / seven typwriters / seven years sort of affair. You have to have lots of scientists in lots of labs working on a lot of stuff and only a small percentage of this work will actually produce something that's comercially viable. And furthermore, there's no way of identifying ahead of time which line of research that will be. From a business standpoint, it's a total disaster.

    That's why we have universities, grants, NASA, and, most importantly, massive amounts of Pentagon funded research and development. Without all this taxpayer supported R&D, the internet, CD players, jet airplanes, and a long list of other technologies might not exist. Or, anyway, if they did, we'd have to import them from other countries that had the sense to publically fund their R&D. Which would include all the other developed countries.

    But it's interesting to me that the "people only do things if there's a profit motive" argument should rear its head on Slashdot of all places, a universe where everyone, it seems, insists most emphatically that non profit-motivated user participation is essential for creating quality software. Open source software is one of the best arguments against profit motive I've seen. Indeed, you could make a pretty good argument that the very principles of science and technology (objectivity, the sharing of information, the constant pursuit of better explanations and methods, etc.) aren't compatible with free markets (every-capitalist-for-himself, proprietary technology and ideas, etc.) and use the Microsoft vs. open source story as a case in point.

    Clay

    I'm not clever enough to come up with a signature line. Sorry.

  • by FallLine (12211) <falllineNO@SPAMoperamail.com> on Monday April 12, 2004 @03:35PM (#8840441)
    I've heard MBA students spouting something about how all the "work" will be outsourced and people in the US will just "manage" everything. I fail to see how this is a viable model for a country. The foreigners will learn management too, and then those US managers that don't know anything about day to day operations in Singapore will be next to go. How can anyone claim a nation of upper managers is viable with a straight face?


    First, it's truly not "millions" of jobs that we are talking about here. It's a couple hundred thousand at most. Do not make the mistake that all, most, or even a large percentage of displaced IT workers has anything to do with outsourcing (there there are not nearly enough dollars in offshoring industry to explain this "loss"). Most (but not all) of the lost jobs are better explained by cyclical factors in the industry that have nothing to do with offshoring (e.g., DotCom bombs, slumping IT spending, etc)

    Second, I don't believe the argument is that they will be "managers" per se (at least not in the sense that you're thinking). The argument is that most of those displaced workers will ultimately find jobs that are less rote (less cookie cutter) and more creative oriented. The vast majority of outsourcing work (at least those where it's been proven to succeed) is rote work that has been done a zillion times before and can essentially staffed by a trained monkeys and can generally be put into very precise sets of requirements with few changes necessary.

    In other words, the belief is that US programmers will become, say, domain experts in their fields and bridge the large gap in technical understanding between the needs of the business and needs of the programmers for proper instruction. Instead of spending hours with the mundane aspects of coding, the time is spent at a higher level. [This is NOT something foreigners can do well, because it requires very specific knowledge of the industry, excellent communication skills, and close proximity to the end users/managers.] The analogy that I might draw would be the difference in going from, say, assembler to a high level development environent (e.g., C#, Delphi, etc) with graphical IDE. These tools allowed a developer to produce orders of magnitude more for the end user, but they didn't result in job less because they made lots of development activities economically viable that were before cost prohibitive.

    Third, there are a limited number of qualified individuals in the foreign workforces and these numbers in the larger markets will be over run with demand (pushing up wages and increasing the problems as they have to dip deeper into the barrel). Despite the fact that there are billions of people in places like China and India, only a tiny fraction of these are truly educated enough to perform the work they already have AND have good english skills. Fewer still have any sort related work experience. In other words, prices in foreign labor markets will rise and prices here will decline--which will help moderate the financial incentive to put work overseas.

    Fourth, where do you think all of this imagined off-shore produced IT goes? It goes back into US corporations, by and large, in the form of CHEAPER IT products and services (remember most of the country doesn't work in IT). This means more and better IT, which generally means higher productivity, which gives the US a competitive advantage on international markets. [Conversely, if we prevent our corps from offshoring, while most of the developed world does not, they WILL have a comparative advantage]
  • Re:Productivity (Score:3, Insightful)

    by benwaggoner (513209) <ben.waggonerNO@SPAMmicrosoft.com> on Monday April 12, 2004 @05:33PM (#8841706) Homepage
    There has never been long-term unemployment of skilled workers in this country since the Depression, even though past rounds of outsourcing involved more jobs than are going away today. A dynamic economy makes jobs for everyone who can do good work, even if it isn't in the field they imagined. I don't think outsourcing is the major factor in any decline in IT employment - the total number of foreign workers doing outsourced IT work isn't high enough. Bear in mind there are far more many trained ID professionals in the USA than in India, even though their population is much higher.

    I don't see anything about our current economy that suggests that something has fundamentally changed to cause this to be different.

    I know lots of engineers, and while not all of them are working their dream jobs, all of them are working in positions where they're applying their technical skills.
  • Re:Customers (Score:3, Insightful)

    by benwaggoner (513209) <ben.waggonerNO@SPAMmicrosoft.com> on Monday April 12, 2004 @05:42PM (#8841798) Homepage
    Well, obviously most professional jobs WON'T go overseas. And those that do will get replaced by other jobs in new sectors. Really, what's happening today isn't any more disruptive than say, the transition from a farming to industrial economy, or from industrial to services.

    The classic example is buggy-whip makers. Big industry before cars. Went away fast and hard. Sucked for most whip-making companies, but the workers found new jobs.

    What's happening right now is companies are taking advantage of a wage differential caused by some formerly closed economies that are opening up, which is suppressing wages relative to education/talent in those countries.

    But wages are going up in India faster than they're going down in the USA. Since people don't actually refuse to work for decades instead of taking jobs at a lower rate of pay, we'll see some downward pressure on IT salaries in some sectors. This is appropriate - salaries were getting way too high relative to education required in some sectors. There isn't any good reason why average programmers a few years out of school should make more than doctors a few years out of medical school, which had been happening.

    So, every year, Indian programmers will make more and US programmers less, in relative terms, until some kind of equilibrium is hit where productivity per dollar is the same. I expect that US programmers will still get paid more, due to greater productivity. And while wages in some sectors might go down, this will be more than balanced out by a lower cost of goods and services across the economy.

    So we won't be poorer in any meaningful sense. Sure, the USA won't be making 20x per capita as India and China do anymore, but that's fine. We'll still be richer than we are today, even if others are even richer than they used to be on a percentage basis.

    I suppose the USA will feel less relatively rich compared to the rest of the world, but that's a good thing, right?
  • by rw2 (17419) on Monday April 12, 2004 @06:18PM (#8842126) Homepage
    No, on the other hand, pure capitalism can only work where everyone is selfish and where everyone expects others to be selfish.

    If as a customer, I expect companies to try to screw me over, I take full responsibility if a company successfully screws me over, and I don't usually let it happen again.

    It's the same thing with my environment, if a company messes up my surrounding envrionment, I take full responsibility for chosing the location I live in and I take full responsibility for moving away and/or making them stop.


    Yes, that's the principle. It doesn't scale though. No one has time to investigate all the companies they do business with to the extent required for pure capitalism to work.

    Let's see, I've done very little today from a consumption standpoint, what would my list be:

    I had two slices of toast and some peanut butter for breakfast.
    I took an ibuprofen for my knee.
    I took some vitamins for my other parts.
    I had a very simple lunch (roasted chicken).
    I bought a drip waterer for my garden.
    I played ultimate at lunch.
    I had a handful of peanuts from the snack cube.
    I drank some bottled water.

    It seems unlikely that even I, someone who cares, would be able to investigate that many purchases, but it's actually worse than it first appears. Just take my breakfast.

    That two slices of toast breaks down to:
    A bread company.
    The suppliers to the bread company (we'll assume they are all producers and not middlemen for the sake of the simplicity of this example).
    the company which supplied the wheat
    the company which supplied the butter
    the company which supplied the eggs
    the company which supplied the yeast
    the company which supplied the water
    the company which supplied the machinery (ovens, mixers...)
    The peanut butter company.
    The supplier to the peanut butter company.
    The supermarket.

    The common lore is that market economies are supposed to be efficient. What is more effecient about every single person doing that kind of leg work than having a legal system which says you must pay a minimum of $n/hr, you must adhere to osha rules, you must not dump your junk in the public's rivers?

    Pure capitalism is every bit a nightmare that pure socialism is. I care and I don't think I could keep up with the research necessary to live in that world. What about the 95% that don't care? Consumer Reports, for example, is a fairly reliable organization, but how many people bother to check what they have to say before making a major purchase that effects them directly? Why should we believe that these same people who don't do the homework necessary to protect *themselves* would suddenly, in a pure capitalistic system, do the homework necessary to protect themselves, the workers they do business with and the environment?

    We shouldn't.

    We built things like osha, epa, fda and others because the business community showed themselves willing to maim, pollute, sell snake oil and a myriad of other reprehensable things if left to their own devices.

    We shouldn't go back to that. We tried it, it didn't work.
  • by quarkscat (697644) on Monday April 12, 2004 @11:44PM (#8844413)
    You have hit the nail on the head.
    The "Walmart" economy is not a self-sustaining
    economy, because of the shrinking middle class.
    This model only works for 60 - 70 percent of
    the inverted bell curve of declining purchasing
    power, after which it will collapse.
    Only so many people can work in the trades
    and professions that don't get out-sourced.
    The "cream" of these don't shop at Walmart,
    anyway.
    As more illegal aliens enter this country
    (which has increased by 40% since 9/11/01),
    even many of the professional trades jobs
    will be lost to those willing to work even
    more cheaply here.
    The three tiered social strata that was
    America will melt away into a two tiered
    strata that will more closely resemble
    Europe in the Middle Ages: the very small
    and powerful privledged class, and the
    peons.
    The disparity of income between the rich
    and the middle class in America has widened
    significantly since the 1970's. If you
    compare the CEO salary and perks in today's
    economy between the EU, Japan, and America,
    the American CEO's compensation is obscenely
    greater.
    Only when shareholders insist on out-sourcing
    the American corporate elite will the trend
    moderate.
    IP protection, job conservation, and the preservation of societal values must be
    enforced through legal governmental means,
    since the corporate fatcats refuse to consider
    these factors. NAFTA is flawed (as well as
    structural problems in the WTO), because the
    regional/national societal values are not
    part of the equation of trade equality.
    If working conditions, hours of labor, pay
    scale, ability to organize, health care,
    and environmental issues were factored into
    all trade negotiations, the "playing field"
    would be much more level.

    (Just my depreciated $00.02 worth ...)

Organic chemistry is the chemistry of carbon compounds. Biochemistry is the study of carbon compounds that crawl. -- Mike Adams

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