In the debate about the merits of outsourcing, I have taken a great interest and listened to people on this forum, talk radio etc. To be upfront, my belief is that outsourcing should be limited to jobs that don’t pay a living wage for Americans. For example, textile working etc.
The argument I see goes something like: We are exporting textile jobs and steel mill workers, and instead making the robots that make their factory equipment, thus higher quality/higher paying jobs for America. But I rarely see people compare the NUMBER of these jobs. There is always going to be less job slots for “robotics engineer” than “blue collar steel mill worker”. In the race to maximize efficiency, the pro-outsourcing camp always points to NET benefit and efficiency as what’s best for America, the logical conclusion is that if there were 5 people in America with salaries higher than whatever the GDP would be for that year and the rest of us were homeless tunneldwelling morlocks, that it would be for the best.
It is so obvious to me that it is getting harder and harder for anyone but the wealthy to do well in this country. A college degree or trade certificate is pretty much the bare minimum to have a decent lifestyle in this country.
Personally, I feel that I am almost 26 and decently intelligent, but I am not able to find a decent job because I am from a rather poor and/or disfunctional family. I haven’t been able to go to school because my mother is a lawyer who has never given me a dollar for higher education, but because her income was high, even though I lived on my own and paid rent, I was considered her dependent for federal loans and aid money until I believe something like last year. I actually WORK at a state college, but as a custodian. In my eyes, there are probably a lot of people like me: Intelligent people who want a decent living and to be challenged by their jobs, who are stuck doing menial labor because they don’t have monied or supportive families, who cannot fit into the system. America is the one losing out just as much as we are, I would be better able to contribute as an electrician or electrical engineer (my goal) than mopping floors. My grandfather had no education, but he supported a full family with a car and a home in a steel mill for 30 years…these kinds of options are just not open, even getting a unionized job at the loading docks or the railroads require knowing the right people.
I’m eventually going to get an education and do well, but that I’m going to be starting so late in life is already going to affect my lifetime earnings in a big way. This is a huge waste.
Sorry for the rant, I’ve just been thinking these things for a while and feel better already.
One thing to consider is that the engineering job might make $70k a year, vs the $2k a year in the textile factory. So while there are fewer jobs as engineers, that one worker can now support her husband, four children, and in-laws, who otherwise would have had to work in the factory with her. She can also save enough to help with higher education should he be willing.
Even without offshoring low end jobs are always destined to be replaced when ever possible.
My point was that the textile factory job, good riddance, I was arguing for saving the good manufacturing jobs like my grandfather had that raised a family in a dignified manner. Apologies if I didn’t make that clear.
Those *good * manufacturing jobs you refer to that your grandfather worked at were an exception to the rule.
Following WWII the US was the only industrialized country not bombed to ruins or left flat broke. As such American manufacturing has a near world monopoly allowing for better salaries in an otherwise uncompetitive environment.
A few decades later and both Germany and Japan are once again manufacturing powerhouses and able to compete. This competition drove/forced US companies to cut costs and improve techniques. That meant moving low end labour to cheaper countries, and automating everything else, at the same time that Germany and Japan were doing the same.
The downside that we’ll see for the next decade or so is that there are millions of unemployed Chinese et al. entering the workforce willing to work for less than American minimum wage. But in the mean time, millions of Chinese are becoming middle class and buying American stuff that they can’t make over there.
I won’t lie, I had to look up what a steno pool was. Are you saying that society has no more need for steel products? And the good jobs that go with them that promote a strong middle class? (Steel is just the easiest example I can come up with).
Funny you should mention Germany, which has a buget SURPLUS with China because they refuse to let China walk all over them, and an amazingly strong manufacturing sector. Our manufacturing is also strong at the high end, but we have a hugely underreported unemployment problem because there are not enough quality blue collar jobs.
There’s a lot of people in my part of the country who remember their textile mill jobs with great affection, now that they’re making three or four dollars per hour less and have no meaningful health care.
Steel is actually a really good example. The US continues to have steel tariffs in place to “protect” domestic steel workers.
But the result is three fold:
steel is more expensive and that hurts everyone including steel workers
in encourages substitutions towards other materials which hurts steel workers
in encourages rival trade policies that again hurt everyone including steel workers
The economic theory is to let production go to where it can be done cheapest. Then allow Americans to produce the end products which they are better at doing. And what you’ll see in the middle is a market for specialized steel products that Americans are better at making and require hire skilled workers that America is better and producing.
Outsourcing isn’t based simply on wages. Even when labor costs are a factor, wages aren’t the only component either. You have hit on one of the problems, we are shipping our technology overseas to turn a quick buck. It doesn’t take long before they don’t need us anymore.
Right now the greatest demand is for associates level degrees and certifications. You could investigate the business schools. Government loans are available, it doesn’t take an extremely long time, and it can get you a better level of income. You can continue your education from there if you want to be an EE.
If you want to be an electrician, or in any of the other trades, you should contact local trade unions and ask about the prospects in your area, or other locations. The tradesmen I know are quite happy with their employment situation currently. You would probably have to go through an apprenticeship at relatively low pay though. Combining expericence and education in a trade to reach a Master level can be very lucrative.
I think what you are missing is that jobs that get exported are simply jobs that CAN be economically exported. No one just decides to export this job, but protect that one. It’s not a matter of picking and choosing, but a matter of what works…or doesn’t work.
Making a ‘living wage’ or not making one has nothing to do with the calculation, and deciding what jobs to let go and what jobs to force companies to keep here in the US is, well, madness. It’s not a rational basis to make such a decision on, unless you think it would be a sane policy for the government to force companies to continue to provide jobs or continue business units based on the numbers of jobs they have had in the past. For instance, should the government force companies to keep switch board operators on staff? We used to have a lot of switch board operators, after all, and it was automation and expert systems that did them in. So, why shouldn’t we force companies to keep those jobs? Automation has cost more jobs, from a static perspective, than outsourcing ever will…and, in the end, it’s the exact same thing.
There are less farm jobs today than there were at the turn of the century. Agriculture and agriculture related jobs used to make up 90+% of all jobs in the US. Today it’s like 1%.
Here is the thing…how are you going to force people to buy products made less efficiently to protect those jobs? Leave aside whether it’s a good idea to try and stagnate and keep people doing jobs that could be more efficiently replaced using more and more highly automated systems, and leave aside the fact that labor is a resource that, if it’s just laying about someone at some time will find a way to exploit…how will you force people to buy products from companies who use high levels of labor and don’t work constantly to reduce costs? The Made in the America schtick has been tried before. If you do a poll plenty of people SAY they will buy products based on whether or not they are made in the US…but the actual sales figures speak for themselves. So…how will you force people to pay more money for the same products? Will you take the Le Jac approach and simply crank up the tariffs? Then what? Tell US flagged companies that they have to hire the same numbers of real Americans to do the jobs? What will that do to prices?
It’s not obvious to me that this is the case. What’s obvious to me is that we are in a pretty bad recession and that times are tough right now. It’s pretty obvious to me that we aren’t the only country in this state of affairs either. It’s also pretty obvious to me that most of the countries that are ‘taking’ our good ole American jobs are pretty much crappy places to live, and the the workers ‘taking’ those jobs are being paid pretty shitty salaries to work in pretty bad conditions (the other side of the low wage coin is that they ALSO have low environmental and safety standards to go along with the shitty pay. It’s not just a job, it’s $.50/hour plus all the toxic waste you can eat!).
What is obvious to me is that American labor has priced itself out of the competition for low skill repetitive tasks. When you include benefits and regulations of our industries it simply costs too much for companies to keep a large semi-skilled staff to make things that can be made easier and cheaper either through higher and higher levels of automation or through offshoring the manufacturing to some place where labor costs are orders of magnitude cheaper. The same goes with outsourcing services that can be done either through high automation and expert systems or by cheap labor who can do a similar job for a lot less money.
Go out and start a new business of your own or found a company of your own. Find a killer app or a service or product that people want and are willing to pay you for. Or, be flexible…don’t get fixated on a single type of job. I think that’s going to be the key to labor in a country like the US in the future…the ability to be flexible and to be able to parlay your skills into a series of jobs. The days where you can work at some company turning the same screw or tightening the same bolt for 30 years are gone…and they are NEVER coming back. Not to American or to Europe or any other Western country. Things change to fast these days, and you have to be prepared to shift with them…or be prepared to be unemployed or underemployed for a good chunk of your working lifetime. If all you know how to do is turn a certain screw or tighten a certain nut, or weld a certain weld or push a certain button then you are fucked in the long run, because that sort of job will either be automated (if it hasn’t already been) or sent to some 3rd world hell hole where people are willing to do that same work for a thousandth of what it would cost to have you do it.
You’re not contradicting my premise which is that no one ever talks about the NUMBER of jobs vs thr efficiency. My argument is that we are headed towards paying a very high price in this country for eroding the middle class so much and not having ENOUGH quality jobs/opportunity. The fact is, efficiency is not what we should use to measure the health of the U.S. If an extra few billionvmaerialized into the laps of the wealthy, our country would be more efficient, yet Bush era tax cuts prove that giveaways to the wealthy DONT spur middleclass job creation. Efficiency can be a useful tool but it is often a codeword for trickledown economics.
no one gives a damn about those issues that you seem concerned about. No one gives a damn if you get a “living wage” job. Further, no one gives a damn if you get any job at all that would let you at least learn useful job skills. In fact, no one gives a damn about you and people like you full stop.
Everybody that matter don’t mind. They all have their own agendas which don’t include either of the above items that would have been an issue of note in a working social contract type of society. Everybody that do mind, don’t matter.
Repeat the above principles out loud until you fully appreciate them. Then stop expecting any social contract type of goodness out of the world around you and try to figure out how to live in it as best as you can.
Rogerbox makes a good point. You can’t compete in textile jobs in the West.
But hi-tech products such as automobiles and computers, you can, because it has got to do with technology.
Here is a funny thing though, unique to the US. Exporting jobs at the cost of American workers is all too common. And it can destroy communities. Almost the entire auto industry was uprooted from Detroit and sent to Mexico, plunging Detroit from having a very strong middle class to a veritable slum.
Same with lap tops and computers. In the IT industry, the US still has software development, but much of the R&D even in this industry is being outsourced to India.
I know this for a fact as I am working for a US software company and the company I work for, which I will not identify, has built a multimillion dollar R&D center in India while at the same time they have laid off a number of people in the US.
Meanwhile, the very rich become richer as they systematically destroy the middle class.
In Europe, this does not happen. European workers are protected and they remain competitive. Yes, they have shed uncompetitive industries like textiles, but they will not export jobs unnecessarily.
In fact in most European companies, there will be a union leader in the board of directors representing the workers.
I have never understood why the US allows such extreme poverty and even starvation. It’s the richest country in the world and the US has starving people. Unbelievable!
If anyone can explain that to me, I would be grateful.
Part of the problem with what you’re asking that is that the bulk of the “numbers” are a bit fungible.
There are a lot of products made in the US that are now made in China, which meant the local factory shut down and a new one opened in China.
And there are also a lot of new factories opening in China that would have opened in the US.
But if the US had gone the protectionist route, it would have lost most if not all of its exports. The products made inefficiently in the US would cost more than those produced efficiently elsewhere. Net result would be worse because the US company AND the US factory would close.
The US has experience a continual shift away from low end jobs towards those requiring education. What you are describing has been exacerbated by the recession.
Back to what I wrote in post 5, those jobs shouldn’t have been middle class. It was an anomaly. They only reason so much money was made in Detroit was that there wasn’t anyone else in the world competing. It wasn’t until Mexico (and Canada) entered the mix did US workers have to compete. And after decades of high salaries they were overpaid compared to Mexican and Canadian workers that we willing to get paid less. In Canada workers could earn less because our progressive income tax structure pays for health care. In Mexico they could earn less because their cost of living was so low. What you saw was the American worker having to compete with the rest of the world after decades of a near monopoly. Wages in Detroit should never have gotten that high that fast. And instead of competing but lowering their wages, they lots their jobs. Those shouldn’t have been middle class jobs in the first place.
We are quite a bit richer than Germany, and in reality we don’t lag that far behind in manufacturing per capita.
Besides, Germany essentially cheats just like China does. By being the best economy in the Eurozone, it’s currency is artificially low. This is because the value of the Euro is being dragged down by Greece, Italy, et. al. If there were still a Deustchemark, it would be worth more than a Euro, and consequently Germany’s manufacturing sector would be less attractive.
We can preserve jobs through tariffs, currency devaluation, and other subsidies, but this is no different than putting those millions of factory workers on welfare.
What metric should we use? What would be a good metric to show how healthy the US (presumably economy) is?
Which is the same argument used by protectionists and Luddite types throughout history. Why is it different now? Why is it important to protect the middle class and force companies to employ people if it makes no business sense to do so? How would it work if you DID force companies to hire a bunch of people they don’t need to do jobs that could be done better overseas or by automation? How would those people doing those useless jobs feel in the long run about that? Would that make them proud of the jobs they were doing, would it make them determined to do a good job knowing that their jobs and income were protected? How has that worked out historically?
What do you suppose billionaires do with their wealth? Do they stuff it in mattresses or blow it all on hookers and jet air planes? What does produce jobs and wealth? You say it’s not Bush era tax cuts (and I don’t necessarily disagree with that), but then what would produce both? What do you think needs to be done to make companies hire Americans instead of offshoring and outsourcing, or what would spur companies to expand or even spur people to build new companies or products? What’s the mechanism to do all that stuff? How do you propose to ‘solve’ this ‘problem’?
IIRC, Roosevelt was going to implement national healthcare, but it never happened because he died.
So you are saying American economy is based on the brief monopoly they enjoyed after the war. I have to call bullshit on that. It’s true they did have a few years where the US economy had an advantage, but the US was not the only ones. Canada did not have a destroyed industry, neither did Sweden or Switzerland, but they all maintained their economies after the competition came back.
The US could have done the same, but the greed of the CEO’s ensures that this won’t happen. None of the European CEO’s make as much as American CEO’s and the European CEO’s pay a lot more tax and still remain rich. You don’t need that many millions to ensure a good life. American CEO’s are not satisfied with millions, apparently they need billions.
That is funny. The Euro is currently at an all time high compared the US dollar.
The Chinese are pegging their currency, but the Euro is not. What’s happening in Greece and Italy et. al. may weaken the Euro, but that alone is what determines the value. It is not pegged like the Chinese Yuan as you suggest. It is free floating and as I’ve already mentioned it is at an all time high compared to US$.
So is the Japanese Yen, the Australian, New Zealand & Singapore dollar as well as Indian Rupees by the way.
