# Explain to me by downsizing or outsourcing are immoral **URL:** \ **Category:** Great Debates\ **Created:** [April 12, 2004, 3:21am UTC](https://boards.straightdope.com/t/explain-to-me-by-downsizing-or-outsourcing-are-immoral/239556 "2004-04-12T03:21:35Z")\ **Posts on this page:** 20\ **Page:** 4
**Author:** ![iamme99](https://avatars.discourse-cdn.com/v4/letter/i/57b2e6/32.png) [@iamme99](https://boards.straightdope.com/u/iamme99)\ **Post date:** [April 15, 2004, 2:34am UTC](https://boards.straightdope.com/t/explain-to-me-by-downsizing-or-outsourcing-are-immoral/239556/61 "2004-04-15T02:34:52Z")
> [@JThunder](#): > > “We”? > > And just who is this “we” of whom you speak? Company owners? Managers? The lowly worker who is in no position to employ anyone, and who is not accountable to the company shareholders? > > Indeed, if it is indeed a virtue to act selfishly, then company managers are doing the right thing by outsourcing labor. After all, they are merely acting in what they consider to be their own best interests! Your statement needs to be qualified by noting that such selfishness is beneficial in the SHORT-TERM only. Companies, management that run them and the shareholders that actually own companies are part of our society. The end never justifies the means. Focusing on doing anything to increase profits at the expense of the society you live in will come back to bite these people in the rear. If large numbers of people are without full and equivalent employment when their jobs have been displaced (either through offshoring or productivity improvements), then the Federal, state and local governments get less tax income. Therefore, services that citizens want and expect will not be able to be funded unless some alternative means of increasing taxes is undertaken. That would seem to imply that the company managers, shareholders and companies themselves will have to make up the difference. Furthermore, these displaced people will not be consuming at the same level they would have if they had full employment. Therefore, companies will have less sales in the USA and governments will collect less sales taxes. California is experiencing this now and the effect is that many schools, for example, are laying off teachers, closing libraries, eliminating athletic programs and most , if not all after school activities. Infrastructure is deteriorating and not being fixed when necessary. So you see, there is a price to pay. > [@JThunder](#): > > See, I think that’s the contradiction in your stance. It amounts to American workers demanding sheer benevolence from their employers, while simultaneously denying that same benevolence toward foreigners – many of whom need the employment far more desperately! It’s easy to say “_We_ should be selfish,” when one expects to receive benevolence, rather than give it. I really don’t understand why this point keeps getting brought up. While I feel sorry for the plight of the poor in the rest of the world, my first priority is my well-being. I and many others expect that our own companies and politicians will make the citizens of their own country the first priority. ---
**Author:** ![CaveMike](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cavemike/32/16379_2.png) [@CaveMike](https://boards.straightdope.com/u/CaveMike)\ **Post date:** [April 15, 2004, 2:59am UTC](https://boards.straightdope.com/t/explain-to-me-by-downsizing-or-outsourcing-are-immoral/239556/62 "2004-04-15T02:59:44Z")
> [@Star Was](#): > > If a company is going to stay competitive they need to layoff or fire employees that are not productive enough. … If a company does not make good financial decisions they are not looking out for their investors. In my experience RIFs are executed not because employees are unproductive, but because the company has lost profitablity. This may be due to any number of reasons; a common reason in my industry was over-hiring. The easiest way to move toward profitability is to cut expenses and the single biggest expense is payroll. At the time the RIFs are executed, the company has already made a string of bad financial decisions and has already failed its investors and employees. To suggest that RIFs are a noble decision is ridiculous. > [@Star Was](#): > > Also, why should a company be expected to have more loyalty to its employees than the employees have to the company? If an employee finds another job that better meets their needs they will be done in 2 weeks in most cases. Why should a company have loyalty to those that don’t show loyalty. I find this statement to be absurd. Many employees of the previous generation showed complete loyalty to their employers, but found themselves RIFed as they approached retirement. It was employers that broke the _implied_ employment contract. Job-hopping is a recent trend and I suspect that it came as a defensive manuever. Most people are naturally very resistant to changing something so fundamental as their job. An employee has such an emotional tie to their job that it usually takes a lot before they will consider leaving. In my mind, there is an implied contract between employee and employer. The employee says, “I am going to work my hardest and make this company profitable”. The employer says, “I am going to guide the company wisely so that I can keep this company profitable”. Failure on either side is immoral. ---
**Author:** ![iamme99](https://avatars.discourse-cdn.com/v4/letter/i/57b2e6/32.png) [@iamme99](https://boards.straightdope.com/u/iamme99)\ **Post date:** [April 15, 2004, 3:35am UTC](https://boards.straightdope.com/t/explain-to-me-by-downsizing-or-outsourcing-are-immoral/239556/63 "2004-04-15T03:35:44Z")
> [@CaveMike](#): > > In my experience RIFs are executed not because employees are unproductive, but because the company has lost profitablity. This may be due to any number of reasons; a common reason in my industry was over-hiring. The easiest way to move toward profitability is to cut expenses and the single biggest expense is payroll. At the time the RIFs are executed, the company has already made a string of bad financial decisions and has already failed its investors and employees. To suggest that RIFs are a noble decision is ridiculous. I agree and to put what you are saying in more black & white terms - just as “violence is the last resort of the incompetent”, having to RIF employees is almost always due to a failure of MANAGEMENT. I find it interesting that Wall Street almost always reacts positively to a company when it announces layoffs, because they focus on the short-term benefit of lowered costs, while completely disregarding WHY the company was forced to do the layoff. Any company that is forced to do a RIF is really a failure and should be penalized by its investors. ---
**Author:** ![Kimstu](https://avatars.discourse-cdn.com/v4/letter/k/ecd19e/32.png) [@Kimstu](https://boards.straightdope.com/u/Kimstu)\ **Post date:** [April 15, 2004, 4:01am UTC](https://boards.straightdope.com/t/explain-to-me-by-downsizing-or-outsourcing-are-immoral/239556/64 "2004-04-15T04:01:34Z")
**SW:** \*Yes, people have a right to consider their own interests, but it it morally required that managers consider the interest of their workers above the interests of the business and investors? \* Well, leaving aside the question of whether the workers’ interests **are** really opposed to the management’s and investors’ interests in the long run (cf. **iamme** ’s cited article about Costco, for example), I think there’s a case to be made for a company’s having at least **some** moral obligation to their workers. In the last analysis, the company’s charter is granted by a US state, and it benefits from the considerable advantages that the US federal government provides, both domestically and in terms of international trade. I don’t think it’s unreasonable to say that therefore the company does have some obligation to provide decent jobs for US workers. Naturally, you can’t always put the workers’ short-term interests first; that would be bad business. The problem is that there’s no real incentive, considered strictly in terms of the company bottom line, for taking into account workers’ interests at all. ---
**Author:** ![Star\_Was](https://avatars.discourse-cdn.com/v4/letter/s/9d8465/32.png) [@Star\_Was](https://boards.straightdope.com/u/Star_Was)\ **Post date:** [April 15, 2004, 4:02am UTC](https://boards.straightdope.com/t/explain-to-me-by-downsizing-or-outsourcing-are-immoral/239556/65 "2004-04-15T04:02:39Z")
> [@](#): > > The employer says, “I am going to guide the company wisely so that I can keep this company profitable”. Failure on either side is immoral. What if the best way to keep the company profitable is to downsize or outsource? ---
**Author:** ![pervert](https://avatars.discourse-cdn.com/v4/letter/p/bbe5ce/32.png) [@pervert](https://boards.straightdope.com/u/pervert)\ **Post date:** [April 15, 2004, 4:07am UTC](https://boards.straightdope.com/t/explain-to-me-by-downsizing-or-outsourcing-are-immoral/239556/66 "2004-04-15T04:07:36Z")
> [@Kimstu](#): > > I don’t think it’s unreasonable to say that therefore the company does have some obligation to provide decent jobs for US workers. You start out with a reasonable statement of fact. Notably limited in scope and vague enough to cover just about any level of obligation by an employer to the worker. > [@](#): > > The problem is that there’s no real incentive, considered strictly in terms of the company bottom line, for taking into account workers’ interests at all. Then, however, you place so many absolutes in your conclusion as to tatter all reason. What can you possibly mean by “no real incentive, … , for taking into account workers interests”? Placed alongside your first paragraph, this seems unusually unreasonable. Even in the case of a company outsourcing most of its work (an admittedly rare beast indeed) aren’t the foriegn workers employees in a very similar sense as the local ones were? What can you possible have meant that a company has no incentive to take its workers interests into account? I simply cannot grasp such a concept. ---
**Author:** ![Kimstu](https://avatars.discourse-cdn.com/v4/letter/k/ecd19e/32.png) [@Kimstu](https://boards.straightdope.com/u/Kimstu)\ **Post date:** [April 15, 2004, 4:09am UTC](https://boards.straightdope.com/t/explain-to-me-by-downsizing-or-outsourcing-are-immoral/239556/67 "2004-04-15T04:09:11Z")
**HOT:** _There is no written guarantee that says the US will always maintain it’s leading position in the world, and it’s people will enjoy a high standard of living. We can blow it if we keep giving away our knowledge and jobs. Most Americans have a very hard time swallowing the concept that our standard of living could go down._ True. Personally, I’m actually in **favor** of our average material standard of living going down somewhat, but I know that it would have to be achieved very thoughtfully and carefully in order to be perceived as a boost for our overall quality of life rather than as an impoverishment. If it’s just forced on us by downward pressure on wages and continued economic hard times, it will make a lot of people unhappy. _One you empower the other countries with knowledge and infrastructure, they are our equal and can surpass us._ Which is a good thing in the long run, IMHO; ideally, in the long term, we could be getting outsourced jobs from India. The problem is not whether overall global prosperity and worldwide competition would be good things, the problem is whether our current policies are really taking us there, and whether we’re paying too high a price for it in the short term. _If we’re lucky, one good terrorist attack overseas will cripple an outsourced US company’s network and corporations might start waking up to the risks._ :eek: Christmas!!! Um, joke, yeah? I’ll pass on my share of that kind of “luck”, thanks. 🙂 ---
**Author:** ![JThunder](https://avatars.discourse-cdn.com/v4/letter/j/e95f7d/32.png) [@JThunder](https://boards.straightdope.com/u/JThunder)\ **Post date:** [April 15, 2004, 4:09am UTC](https://boards.straightdope.com/t/explain-to-me-by-downsizing-or-outsourcing-are-immoral/239556/68 "2004-04-15T04:09:52Z")
> [@iamme99](#): > > Your statement needs to be qualified by noting that such selfishness is beneficial in the SHORT-TERM only. You’re making overly broad generalizations. Sometimes, it may be beneficial in the long run as well – ESPECIALLY if short-term losses can spell the complete collapse of the company, or if they can cripple the company to the point at which it can no longer recover. You have posited SOME reasons why outsourcing can ultimately damage a company, but let’s not pretend that these reasons paint a complete economic picture. Different companies will have different situations, and only a fool would insist on a “one size fits all” solution. > [@](#): > > I really don’t understand why this point keeps getting brought up. While I feel sorry for the plight of the poor in the rest of the world, my first priority is my well-being. I and many others expect that our own companies and politicians will make the citizens of their own country the first priority. And if your logic holds true, then the company owners and manager should keep their own well-beings as their priorities. This could very well mean sacrificing U.S. workers in order to keep their companies afloat. You argument is the cry of someone who says, “I need to look out for my own interests!” while simultaneously demanding that company owners and managers deny their own interests so that they can bend over backwards for you. That’s the economic worldview of someone who cannot see beyond his needs alone. ---
**Author:** ![JThunder](https://avatars.discourse-cdn.com/v4/letter/j/e95f7d/32.png) [@JThunder](https://boards.straightdope.com/u/JThunder)\ **Post date:** [April 15, 2004, 4:11am UTC](https://boards.straightdope.com/t/explain-to-me-by-downsizing-or-outsourcing-are-immoral/239556/69 "2004-04-15T04:11:57Z")
In other words, **iamme99** , if you feel justified in being selfish (i.e. making your own self-interests paramount), then you’ve got no business complaining when other people put you at a disadvantage by seeking to promote their own needs. You can’t have it both ways. ---
**Author:** ![pervert](https://avatars.discourse-cdn.com/v4/letter/p/bbe5ce/32.png) [@pervert](https://boards.straightdope.com/u/pervert)\ **Post date:** [April 15, 2004, 4:17am UTC](https://boards.straightdope.com/t/explain-to-me-by-downsizing-or-outsourcing-are-immoral/239556/70 "2004-04-15T04:17:40Z")
This is a nitpick and a hijack. Please feel free to ignore it completely. > [@JThunder](#): > > You argument is the cry of someone who says, “I need to look out for my own interests!” If I may nitpick a little, I think it boils down more precisely as “I need **you** to look out for my interests!”. Where “you” is an employer, the government, or society in general. That is, it is not so much selfish in the sense that the concern is for oneself, it is more selfless in that the concern is what can be aquired from others. ---
**Author:** ![iamme99](https://avatars.discourse-cdn.com/v4/letter/i/57b2e6/32.png) [@iamme99](https://boards.straightdope.com/u/iamme99)\ **Post date:** [April 15, 2004, 4:33am UTC](https://boards.straightdope.com/t/explain-to-me-by-downsizing-or-outsourcing-are-immoral/239556/71 "2004-04-15T04:33:52Z")
> [@JThunder](#): > > You’re making overly broad generalizations. Sometimes, it may be beneficial in the long run as well – ESPECIALLY if short-term losses can spell the complete collapse of the company, or if they can cripple the company to the point at which it can no longer recover. > > You have posited SOME reasons why outsourcing can ultimately damage a company, but let’s not pretend that these reasons paint a complete economic picture. Different companies will have different situations, and only a fool would insist on a “one size fits all” solution. BUT the problem of having to do mass layoffs or send labor overseas is a problem of MANAGEMENT. The employees just do what management tells them to do. Why should they have to suffer the most for poor management decisions? In most of the stories I have seen on the subject of layoffs or offshoring, I have not seen any indication or mention that management has cut their generally excessive salaries or bonuses. We already know that management compensation is excessive (I posted a link to a current Businessweek article on this subject) and we also know that the SEC is looking into this subject. Also, it appears that all the “savings” the companies are gaining from this trend are not being used to “save” a company but instead are being directed primarily to propping up the stock price and ensuring that management compensation is maintained at a high level, instead of, say, lowering the cost of their products which might generate more sales on volume. ---
**Author:** ![iamme99](https://avatars.discourse-cdn.com/v4/letter/i/57b2e6/32.png) [@iamme99](https://boards.straightdope.com/u/iamme99)\ **Post date:** [April 15, 2004, 4:47am UTC](https://boards.straightdope.com/t/explain-to-me-by-downsizing-or-outsourcing-are-immoral/239556/72 "2004-04-15T04:47:03Z")
> [@JThunder](#): > > In other words, **iamme99** , if you feel justified in being selfish (i.e. making your own self-interests paramount), then you’ve got no business complaining when other people put you at a disadvantage by seeking to promote their own needs. You can’t have it both ways. You really should stop trying to put everything in absolute terms. It’s not very real world, which is made of shades of gray. You are taking a statement I made about an individuals needs in one country vs. the needs of other individuals in another country and attempting to extend that into some bigger picture morality that applies to a whole country and all its institutions. IMO, a countries companies have a moral obligation to employ as many citizens as possible in a stable work environment. This is good for the individual, it is good for the company, it is good for the country and it is good for society. I say again, on an individual basis, if it comes down to me vs. them, then sayonara to them. I would expect them to feel the same way about me \. That isn’t being selfish, just pragmatic. May the best person win. I don’t see how I can make this any clearer. But whether you agree or not doesn’t much matter to me. ---
**Author:** ![Star\_Was](https://avatars.discourse-cdn.com/v4/letter/s/9d8465/32.png) [@Star\_Was](https://boards.straightdope.com/u/Star_Was)\ **Post date:** [April 15, 2004, 4:48am UTC](https://boards.straightdope.com/t/explain-to-me-by-downsizing-or-outsourcing-are-immoral/239556/73 "2004-04-15T04:48:41Z")
> [@](#): > > .BUT the problem of having to do mass layoffs or send labor overseas is a problem of MANAGEMENT. The employees just do what management tells them to do. Why should they have to suffer the most for poor management decisions? Cite? Companies have competition. If you and I both have companies making product X and I can make it for $5 per unit by using foreign labor and it costs you $12 per unit using US labor, you not going to be competative. You are going to to go out of business by not using foreign labor. You are much less likely to go out of business if you do . How have you failed by using foreign labor? ---
**Author:** ![Star\_Was](https://avatars.discourse-cdn.com/v4/letter/s/9d8465/32.png) [@Star\_Was](https://boards.straightdope.com/u/Star_Was)\ **Post date:** [April 15, 2004, 4:57am UTC](https://boards.straightdope.com/t/explain-to-me-by-downsizing-or-outsourcing-are-immoral/239556/74 "2004-04-15T04:57:18Z")
Another situation. You make product X. It takes 100 workers 1 day to make 1 unit of product X at cost of $1000. A new device is intented that allows you produce product X with 50 employees at a cost of $400 and increase quality. Your competition is switching to production using the new device. What will you do? Continue current production methods? Or layoff 50% of your work force and stay competative? If you layoff the workers have you failed? ---
**Author:** ![Star\_Was](https://avatars.discourse-cdn.com/v4/letter/s/9d8465/32.png) [@Star\_Was](https://boards.straightdope.com/u/Star_Was)\ **Post date:** [April 15, 2004, 4:59am UTC](https://boards.straightdope.com/t/explain-to-me-by-downsizing-or-outsourcing-are-immoral/239556/75 "2004-04-15T04:59:21Z")
intented = invented ---
**Author:** ![iamme99](https://avatars.discourse-cdn.com/v4/letter/i/57b2e6/32.png) [@iamme99](https://boards.straightdope.com/u/iamme99)\ **Post date:** [April 15, 2004, 6:47am UTC](https://boards.straightdope.com/t/explain-to-me-by-downsizing-or-outsourcing-are-immoral/239556/76 "2004-04-15T06:47:20Z")
> [@Star Was](#): > > Cite? Companies have competition. If you and I both have companies making product X and I can make it for $5 per unit by using foreign labor and it costs you $12 per unit using US labor, you not going to be competative. You are going to to go out of business by not using foreign labor. You are much less likely to go out of business if you do . How have you failed by using foreign labor? Cite what? That many companies have poor management? You can find that info yourself by reading business magazines. What you are attempting to do is reduce a multi-variable problem to one variable. This may help justify the conclusion you want to draw, but it has no validity in the real world. However, you do sound like you would make a good candidate for management in many USA companies though \. _Let’s see - we know from management discussions and the employee survey that we don’t communicate well among departments, don’t communicate well between management and employee, don’t utilize technology effectively, we were late delivering our latest product, our Q&A metrics are low and we have a high return rate on our products, our customer service stats are low, we have high employee turnover, management pay is high, we are losing customers and our competitors are kicking our asses. What to do, what to do? Hmmm, I’ve got it! Let’s outsource!_ The above embellished example is just a small list of the many problems that most every company I have worked for has had in spades. It’s a rare company that is managed well. Unfortunately, outsourcing/offshoring is the path of least resistance for companies that don’t want to or aren’t able to first address their own internal structural problems. In other words, outsourcing/offshoring is a sign of a company on its way to failure. ---
**Author:** ![mr\_moonlight](https://avatars.discourse-cdn.com/v4/letter/m/9f8e36/32.png) [@mr\_moonlight](https://boards.straightdope.com/u/mr_moonlight)\ **Post date:** [April 15, 2004, 11:51am UTC](https://boards.straightdope.com/t/explain-to-me-by-downsizing-or-outsourcing-are-immoral/239556/77 "2004-04-15T11:51:35Z")
> [@](#): > > Originally posted by **iamme99** : > It’s a rare company that is managed well. Unfortunately, outsourcing/offshoring is the path of least resistance for companies that don’t want to or aren’t able to first address their own internal structural problems. In other words, outsourcing/offshoring is a sign of a company on its way to failure. I tend to agree, but if this is true, then the problem will soon be solved on its own as outsourcing companies will either go out of business or see the error of their ways. If the assumption is not true, and outsourcing really can make a company more profitable in the long run, then not doing it will lead them out of business. If outsourcing works and you try to prohibit it anyway, companies will be more likely to move to a country that does allow outsourcing, taking even more American jobs with them. Or, if they stay and are forced to operate with high labor costs, then they won’t be competitive without tariffs protecting them, which leads to all sorts of other problems. So there’s not much we can really do about it regardless. It either works or it doesn’t, and companies need to figure it out. ---
**Author:** ![Asteroide](https://avatars.discourse-cdn.com/v4/letter/a/87869e/32.png) [@Asteroide](https://boards.straightdope.com/u/Asteroide)\ **Post date:** [April 15, 2004, 12:29pm UTC](https://boards.straightdope.com/t/explain-to-me-by-downsizing-or-outsourcing-are-immoral/239556/78 "2004-04-15T12:29:35Z")
Would I be right in assuming that free-market proponents also support removing obstacles to immigration - ie encouraging labor to flow as freely as capital ? Seems to me like a better solution than impeding capital flow. I believe the ‘market corrections’ would happen much faster if international worker mobility were to increase. Alternatively, do we only allow free reign to market forces when they are to the advantage of capital ? ---
**Author:** ![JThunder](https://avatars.discourse-cdn.com/v4/letter/j/e95f7d/32.png) [@JThunder](https://boards.straightdope.com/u/JThunder)\ **Post date:** [April 15, 2004, 12:33pm UTC](https://boards.straightdope.com/t/explain-to-me-by-downsizing-or-outsourcing-are-immoral/239556/79 "2004-04-15T12:33:54Z")
> [@iamme99](#): > > You really should stop trying to put everything in absolute terms. It’s not very real world, which is made of shades of gray. Excuse me? You’re the one who keep saying that outsourcing is bad. I’m the one who says that it’s sometimes bad, and sometimes necessary. You’re also the one who keeps saying that outsourcing is only beneficial in the short-term, and is damaging in the long-term. I’m the one who pointed out that this isn’t necessarily so – indeed, that focusing on short-term needs is sometimes necessary to ensure long-term survival. If anything, I’m the one who has been emphasizing that there are shades of gray, and you’re the one who’s taking a myopic, absolutist view (in defiance of all economic logic, I might add). ---
**Author:** ![JThunder](https://avatars.discourse-cdn.com/v4/letter/j/e95f7d/32.png) [@JThunder](https://boards.straightdope.com/u/JThunder)\ **Post date:** [April 15, 2004, 12:37pm UTC](https://boards.straightdope.com/t/explain-to-me-by-downsizing-or-outsourcing-are-immoral/239556/80 "2004-04-15T12:37:16Z")
> [@iamme99](#): > > Cite what? That many companies have poor management? You can find that info yourself by reading business magazines. Nobody’s contesting that. His point was that “good management” alone won’t solve a company’s problems if you’re at a competitive disadvantage. Indeed, I daresay that the bull-headed refusal to use more competitive production techniques (e.g. outsourcing) is a sign of _poor_ management, rather than business savvy. Now, there are good reasons not to use it (the way it can affect supply chains and morale, for example), but this must sometimes be balanced off in favor of economic savings and productivity. [Previous page](https://boards.straightdope.com/t/explain-to-me-by-downsizing-or-outsourcing-are-immoral/239556.md?page=3) [Next page](https://boards.straightdope.com/t/explain-to-me-by-downsizing-or-outsourcing-are-immoral/239556.md?page=5)