# Has outsourcing saved us money? **URL:** \ **Category:** Factual Questions\ **Created:** [September 26, 2010, 4:02pm UTC](https://boards.straightdope.com/t/has-outsourcing-saved-us-money/555106 "2010-09-26T16:02:14Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [September 26, 2010, 6:47pm UTC](https://boards.straightdope.com/t/has-outsourcing-saved-us-money/555106/21 "2010-09-26T18:47:49Z")
> [@beowulff](#): > > China may not seem as cheap of a price in the long run. “Red China”? Nuclear war? I think you need to look at your calendar - it’s not the 60’s anymore. [/QUOTE] There is still a “red China” aka Mainland China, they are Communist. Nuclear War is not impossible today. ---
**Author:** ![suranyi](https://avatars.discourse-cdn.com/v4/letter/s/e36b37/32.png) [@suranyi](https://boards.straightdope.com/u/suranyi)\ **Post date:** [September 26, 2010, 6:53pm UTC](https://boards.straightdope.com/t/has-outsourcing-saved-us-money/555106/22 "2010-09-26T18:53:42Z")
> [@DanBlather](#): > > I’m surprised you don’t think the question is obvious. Try and buy almost anything from screws to printing books and a Chinese manufacturer will quot you a lower price. So prices for consumer goods are lower, but then we lose blue collar jobs and replace them with Walmart greeters. Not everything. Not even everything you mentioned. I happen to have the latest Stieg Larsson hardback bestseller near me, “The Girl Who Kicked the Hornet’s Nest”, and it says it was manufactured in the U.S. Aside from that there are some areas where the U.S. still manufacturers a lot of stuff. At the doctor’s office, for example, almost all the medical equipment says “made in the U.S.” ---
**Author:** ![Peremensoe](https://avatars.discourse-cdn.com/v4/letter/p/ce7236/32.png) [@Peremensoe](https://boards.straightdope.com/u/Peremensoe)\ **Post date:** [September 26, 2010, 6:54pm UTC](https://boards.straightdope.com/t/has-outsourcing-saved-us-money/555106/23 "2010-09-26T18:54:42Z")
> [@John\_Mace](#): > > > [@DanBlather](#): > > > > So prices for consumer goods are lower, but then we lose blue collar jobs and replace them with Walmart greeters. > > That last part is not factually correct. Are you saying that buying goods from overseas in preference to manufacturing them here does not result in lower consumer prices, or does not cost American manufacturing jobs? ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [September 26, 2010, 6:54pm UTC](https://boards.straightdope.com/t/has-outsourcing-saved-us-money/555106/24 "2010-09-26T18:54:54Z")
> [@mangeorge](#): > > Right, not to provide product at a low price. Low price is the goal of the consumer. I think you misunderstand the law of supply and demand. Demand is a function of price. If I can sell more widgets at a lower price, it is often advantageous to lower the price to increase demand. Retailers are always going to be looking at optimizing profits, and oftentimes the way to do that is to lower prices when the retailer’s costs are reduced. Competition for consumer goods is fierce. If one retailer gets “greedy” and decides to pocket his cost savings, there will be 10 others ready to undercut him on price. This is econ 101. And someone posting some uncited anecdote on a message board doesn’t change that. **spark240** : I’m saying they don’t all become greeters at Walmart. ---
**Author:** ![beowulff](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/beowulff/32/542_2.png) [@beowulff](https://boards.straightdope.com/u/beowulff)\ **Post date:** [September 26, 2010, 6:55pm UTC](https://boards.straightdope.com/t/has-outsourcing-saved-us-money/555106/25 "2010-09-26T18:55:39Z")
> [@DrDeth](#): > > > [@beowulff](#): > > > > China may not seem as cheap of a price in the long run. > > “Red China”? > Nuclear war? > I think you need to look at your calendar - it’s not the 60’s anymore. There is still a “red China” aka Mainland China, they are Communist. Nuclear War is not impossible today. [/QUOTE] Of course nuclear war isn’t impossible today. It’s just WAY less likely than it was 30 years ago. Ignoring the fact that the US has 100 bombs for every one of theirs, what advantage would a War with the US give them - talk about killing the goose that laid the golden egg! ---
**Author:** ![Susanann](https://avatars.discourse-cdn.com/v4/letter/s/7ab992/32.png) [@Susanann](https://boards.straightdope.com/u/Susanann)\ **Post date:** [September 26, 2010, 6:59pm UTC](https://boards.straightdope.com/t/has-outsourcing-saved-us-money/555106/26 "2010-09-26T18:59:22Z")
> [@runner pat](#): > > The goal of most businesses is to increase profit > > > [@mangeorge](#): > > > > > [@Crafter\_Man](#): > > > > > > Right, not to provide product at a low price. Low price is the goal of the consumer. Are you trying to tell me that Nike shoes, which are now made by low paid Vietnamese workers, are not rock bottom cheap now? Does Nike still charge a high price for its cheaply made foreign shoes? ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [September 26, 2010, 7:03pm UTC](https://boards.straightdope.com/t/has-outsourcing-saved-us-money/555106/27 "2010-09-26T19:03:56Z")
It actually increased short term profits by drastically cutting labor costs. You will note when Nike moved to slave labor for their shoes ,the prices increased. Soccer balls,made by child labor in India ,have not gotten cheaper. Producers are not looking for ways to lower prices. They just want more profit. Free trade and competition are fantasies… ---
**Author:** ![Peremensoe](https://avatars.discourse-cdn.com/v4/letter/p/ce7236/32.png) [@Peremensoe](https://boards.straightdope.com/u/Peremensoe)\ **Post date:** [September 26, 2010, 7:05pm UTC](https://boards.straightdope.com/t/has-outsourcing-saved-us-money/555106/28 "2010-09-26T19:05:26Z")
> [@John\_Mace](#): > > **spark240** : I’m saying they don’t all become greeters at Walmart. Well, no shit. **DanBlather** ’s comment was obviously not literal; I took “Walmart greeter” as an emblem for all the low-paying service jobs which have been the alternative for so many people who used to or would otherwise have been doing manufacturing jobs. ---
**Author:** ![mangeorge](https://avatars.discourse-cdn.com/v4/letter/m/d78d45/32.png) [@mangeorge](https://boards.straightdope.com/u/mangeorge)\ **Post date:** [September 26, 2010, 7:16pm UTC](https://boards.straightdope.com/t/has-outsourcing-saved-us-money/555106/29 "2010-09-26T19:16:30Z")
> [@John\_Mace](#): > > And someone posting some uncited anecdote on a message board doesn’t change that. Who did that? The only business owners I know personally are a video repair store and a mom and Pop convenience store. Neither have much real competition, so my knowledge is likely limited. And econ 101 was fifty years ago. 😛 But both will for sure pocket any reduction in cost as long as possible. And both are quite successful, but not growing. Oh yeah, a chinese restaraunt owner too. Same thing there. ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [September 26, 2010, 7:21pm UTC](https://boards.straightdope.com/t/has-outsourcing-saved-us-money/555106/30 "2010-09-26T19:21:44Z")
> [@spark240](#): > > > [@John\_Mace](#): > > > > **spark240** : I’m saying they don’t all become greeters at Walmart. > > Well, no shit. **DanBlather** ’s comment was obviously not literal; I took “Walmart greeter” as an emblem for all the low-paying service jobs which have been the alternative for so many people who used to or would otherwise have been doing manufacturing jobs. I don’t care whether it was meant to be taken literally or not. It was factually incorrect no matter how one interprets it. As I noted earlier, economists (you know, the people who actually study this and are experts in the field) are almost unanimous in their agreement that free trade (including outsourcing) is a net plus for the economy. If you’ve got some other statistics that contradict that, let’s see it. ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [September 26, 2010, 7:25pm UTC](https://boards.straightdope.com/t/has-outsourcing-saved-us-money/555106/31 "2010-09-26T19:25:36Z")
> [@mangeorge](#): > > > [@John\_Mace](#): > > > > And someone posting some uncited anecdote on a message board doesn’t change that. > > Who did that? See posts #9 and 11. > [@](#): > > But both will for sure pocket any reduction in cost as long as possible. And both are quite successful, but not growing. Oh yeah, a chinese restaraunt owner too. Same thing there. Of course they will. The operative phrase being “as long as possible”. And that’s only as long as someone else doesn’t try to outcompete them. ---
**Author:** ![mangeorge](https://avatars.discourse-cdn.com/v4/letter/m/d78d45/32.png) [@mangeorge](https://boards.straightdope.com/u/mangeorge)\ **Post date:** [September 26, 2010, 7:29pm UTC](https://boards.straightdope.com/t/has-outsourcing-saved-us-money/555106/32 "2010-09-26T19:29:57Z")
Often when I get into a discussion like this one, I like to go to the [happy](http://www.forbes.com/2010/07/14/world-happiest-countries-lifestyle-realestate-gallup-table.html) site. Pretty telling, IMO. 🙂 Peace, mangeorge ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [September 26, 2010, 7:37pm UTC](https://boards.straightdope.com/t/has-outsourcing-saved-us-money/555106/33 "2010-09-26T19:37:39Z")
> [@mangeorge](#): > > Often when I get into a discussion like this one, I like to go to the [happy](http://www.forbes.com/2010/07/14/world-happiest-countries-lifestyle-realestate-gallup-table.html) site. Pretty telling, IMO. 🙂 > Peace, > mangeorge Yeah, I’ve seen that. I honestly don’t know what it’s “telling” you, though. ---
**Author:** ![mangeorge](https://avatars.discourse-cdn.com/v4/letter/m/d78d45/32.png) [@mangeorge](https://boards.straightdope.com/u/mangeorge)\ **Post date:** [September 26, 2010, 7:49pm UTC](https://boards.straightdope.com/t/has-outsourcing-saved-us-money/555106/34 "2010-09-26T19:49:25Z")
> [@John\_Mace](#): > > > [@mangeorge](#): > > > > Often when I get into a discussion like this one, I like to go to the [happy](http://www.forbes.com/2010/07/14/world-happiest-countries-lifestyle-realestate-gallup-table.html) site. Pretty telling, IMO. 🙂 > > Peace, > > mangeorge > > Yeah, I’ve seen that. I honestly don’t know what it’s “telling” you, though. Well, there is this from the same article; > [@](#): > > By and large, rich countries are happier–and that’s no coincidence. But that’s not all. I like reading about happy people and about what makes them happy. I’m going to open another thread in MPSIMS with that chart and ask for comment, especially from those in the top rated countries. ---
**Author:** ![mangeorge](https://avatars.discourse-cdn.com/v4/letter/m/d78d45/32.png) [@mangeorge](https://boards.straightdope.com/u/mangeorge)\ **Post date:** [September 26, 2010, 8:04pm UTC](https://boards.straightdope.com/t/has-outsourcing-saved-us-money/555106/35 "2010-09-26T20:04:25Z")
Okay, I [did](http://boards.straightdope.com/sdmb/showthread.php?p=12957700#post12957700) it. Anyone else who’s curious is wekcome. I do think it is, however obliquely, garmane to the OP. ---
**Author:** ![DanBlather](https://avatars.discourse-cdn.com/v4/letter/d/f4b2a3/32.png) [@DanBlather](https://boards.straightdope.com/u/DanBlather)\ **Post date:** [September 26, 2010, 8:09pm UTC](https://boards.straightdope.com/t/has-outsourcing-saved-us-money/555106/36 "2010-09-26T20:09:55Z")
> [@John\_Mace](#): > > > [@spark240](#): > > > > Well, no shit. **DanBlather** ’s comment was obviously not literal; I took “Walmart greeter” as an emblem for all the low-paying service jobs which have been the alternative for so many people who used to or would otherwise have been doing manufacturing jobs. > > I don’t care whether it was meant to be taken literally or not. It was factually incorrect no matter how one interprets it. > > As I noted earlier, economists (you know, the people who actually study this and are experts in the field) are almost unanimous in their agreement that free trade (including outsourcing) is a net plus for the economy. If you’ve got some other statistics that contradict that, let’s see it. But being a net plus for “the economy” is not the same as being a net plus for American workers. First, it will be positive in the long term, not necessarily in the short term. Economists (you know who they are right?) talk about dislocations. What used to be well paying jobs are now being done overseas. There are new jobs opening up in the US as well, but that doesn’t help the displaced workers. A middle aged guy who used to be making high quality leather shoes in Maine does not become a shoe designer in Oregon working for Nike, he takes a subsistence job. Maybe in the past he could have bought a house and saved a little for his kids education, now he is biding time til SS and Medicare and happy if he gets to keep his house. It will keep happening. In the not so distant future all X-rays, MRIs, and CAT scans will be read overseas. Those are well paying jobs and the people trained to do them now will not just become IT staff for a medical records company. It is perfectly possible for a large corporation to increase profits for their shareholders while their workers’ lives get worse. To an economist that may mean the economy improved and productivity rose, but it may also increase the gap between the wealthy and everyone else. Are we better off for that? The United States is almost alone in the world in having no protection for workers. We work longer hours, have less vacation, poorer health coverage, and shorter life spans than other industrialized countries. But we can take comfort from knowing that “the economy” is well served by out-sourcing. ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [September 26, 2010, 8:25pm UTC](https://boards.straightdope.com/t/has-outsourcing-saved-us-money/555106/37 "2010-09-26T20:25:38Z")
> [@DanBlather](#): > > But being a net plus for “the economy” is not the same as being a net plus for American workers. My bad. I misquoted my own cite. They said good for “society”, not the economy. American workers make up the bulk of “society”. > [@](#): > > First, it will be positive in the long term, not necessarily in the short term. Economists (you know who they are right?) talk about dislocations. What used to be well paying jobs are now being done overseas. There are new jobs opening up in the US as well, but that doesn’t help the displaced workers. A middle aged guy who used to be making high quality leather shoes in Maine does not become a shoe designer in Oregon working for Nike, he takes a subsistence job. Maybe in the past he could have bought a house and saved a little for his kids education, now he is biding time til SS and Medicare and happy if he gets to keep his house. With all due respect, that’s a nice little story about the guy in Maine. But it’s not a cite that workers are, _en masse_, ending up as Walmart greeters (either literally or figuratively). If you want to defend your statement, let’s see some actual data. > [@](#): > > The United States is almost alone in the world in having no protection for workers. Wow. That’s a real zinger as far as factually incorrect statements go. > [@](#): > > We work longer hours, have less vacation, poorer health coverage, and shorter life spans than other industrialized countries. But we can take comfort from knowing that “the economy” is well served by out-sourcing. I don’t know if that is true or not, but really has nothing to do with whether or not we outsource. Do any of the other countries you are referring to disallow outsourcing? ---
**Author:** ![DanBlather](https://avatars.discourse-cdn.com/v4/letter/d/f4b2a3/32.png) [@DanBlather](https://boards.straightdope.com/u/DanBlather)\ **Post date:** [September 26, 2010, 10:41pm UTC](https://boards.straightdope.com/t/has-outsourcing-saved-us-money/555106/38 "2010-09-26T22:41:41Z")
[quote=“John\_Mace, post:37, topic:555106”] > [@DanBlather](#): > > With all due respect, that’s a nice little story about the guy in Maine. But it’s not a cite that workers are, _en masse_, ending up as Walmart greeters (either literally or figuratively). If you want to defend your statement, let’s see some actual data. Well, there is [this](http://www.bls.gov/news.release/disp.nr0.htm): "Of the 2.9 million displaced workers who lost full-time wage and salary jobs during the 2007-09 period and were reemployed in January 2010, 2.2 million had found full-time wage and salary jobs. Of these reemployed full-time workers who reported earnings on their lost job, 45 percent were earning as much or more than they did prior to displacement… Total Displaced Workers (With No Tenure Restriction) The total number of workers displaced between January 2007 and December 2009 (re- gardless of how long they had held their jobs) was 15.4 million, up by 7.2 million from the previous survey period. Of the total number of workers who lost jobs over the 2007-09 period, 49 percent were reemployed and 36 percent were unemployed in January 2010." So 55% of the workers _who were re-employed_ had lower wages, and 36% had reductions of 20% or more. 36% were unemployed. > [@](#): > > I don’t know if that is true or not, but really has nothing to do with whether or not we outsource. Do any of the other countries you are referring to disallow outsourcing? The entire relationship between labor, management, and government is different in other industrialized countries. One requires a 1 year notice before large layoffs. This allows communities and workers to adapt. ---
**Author:** ![DanBlather](https://avatars.discourse-cdn.com/v4/letter/d/f4b2a3/32.png) [@DanBlather](https://boards.straightdope.com/u/DanBlather)\ **Post date:** [September 26, 2010, 10:46pm UTC](https://boards.straightdope.com/t/has-outsourcing-saved-us-money/555106/39 "2010-09-26T22:46:27Z")
[This](http://www.google.com/url?sa=t&source=web&cd=1&ved=0CBkQFjAA&url=http%3A%2F%2Fwww.upjohninst.org%2Fpublications%2Fnewsletter%2Fsnh_594.pdf&rct=j&q=layoff%20laws%20countries%20europe&ei=l8yfTJ-uFI68sAOG7JHWAQ&usg=AFQjCNHpXI7bja9feHNHiI68pTN4IlS97w) is interesting reading as well > [@](#): > > Differences in labor adjustment strategies of American and European companies are partly > attributable to differences in labor policies. European countries discourage the use of layoffs by > regulating them. All European countries require that employers notify workers prior to dismissal, > and many require that employers compensate laid-off workers under certain circumstances. Most > European countries also require that employers notify public authorities and notify and consult > with worker representatives before implementing a mass layoff. > Although the U.S. Congress passed legislation in 1988 requiring that employers notify > workers sixty days prior to a mass layoff, this legislation is quite weak by European standards. A > company need give no advance notice if the layoff is due to unforeseen business circumstances or > if the company has been seeking capital to avoid or postpone a shutdown. And U.S. law does not > require companies to compensate laid-off workers or consult with worker representatives. > A recent study by the Government Accounting Office found that three quarters of all > companies that appeared to meet the criteria requiring advance notice either failed to file notice or > gave less than sixty days’ notice. In most cases, then, companies either slip through the law’s > large loopholes or simply violate the law. ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [September 26, 2010, 11:05pm UTC](https://boards.straightdope.com/t/has-outsourcing-saved-us-money/555106/40 "2010-09-26T23:05:36Z")
> [@DanBlather](#): > > Well, there is [this](http://www.bls.gov/news.release/disp.nr0.htm): > "Of the 2.9 million displaced workers who lost full-time wage and salary jobs > during the 2007-09 period and were reemployed in January 2010, 2.2 million had > found full-time wage and salary jobs. Of these reemployed full-time workers who > reported earnings on their lost job, 45 percent were earning as much or more than > they did prior to displacement… > > Total Displaced Workers (With No Tenure Restriction) > > The total number of workers displaced between January 2007 and December 2009 (re- > gardless of how long they had held their jobs) was 15.4 million, up by 7.2 million > from the previous survey period. Of the total number of workers who lost jobs over > the 2007-09 period, 49 percent were reemployed and 36 percent were unemployed in > January 2010." > > So 55% of the workers _who were re-employed_ had lower wages, and 36% had reductions of 20% or more. 36% were unemployed. OK. That’s something we can work with. But it has some serious problems wrt supporting your original claim: 1. Most of that time period was during The Great Recession. 2. That cite is just taking about “jobs”. All jobs. Not Factory jobs lost due to outsourcing. One of the worst hit industries during this Great Recession was construction. Those jobs are very difficult to outsource. Remember, that during that same time, we bailed out GM specifically in order to save “workers” and their jobs. I’m not seeing that cite supports your original claim. > [@](#): > > The entire relationship between labor, management, and government is different in other industrialized countries. I won’t argue with that. > [@](#): > > One requires a 1 year notice before large layoffs. This allows communities and workers to adapt. It also hamstrings employers. But whether or not it is a net good for society is a topic best discussed in a different forum. The same is true of your subsequent post. [Previous page](https://boards.straightdope.com/t/has-outsourcing-saved-us-money/555106.md?page=1) [Next page](https://boards.straightdope.com/t/has-outsourcing-saved-us-money/555106.md?page=3)