Who said “no one is really outsourcing”? Of course companies are. Just as many foreign companies are “insourcing” jobs to the US. Honda, Toyota, Mercedes all have car manufacturing plants in the US. Should these companies pack up business and return “home”?
Partly because you are probably assuming the economy is a zero sum game. We are getting cheaper goods because we are leveraging the cometitive advantages that various countries have.
Plenty of people DO have depressed salaries. It simply isn’t reasonable to assume that you will get $100k/year as an IT guy if a company can hire someone in India for $15k/year. Part of what we’re seeing in the tech industry is undoubtably the result of unrealistic growth during the 90s. It wasn’t sustainable, and a lot of folks had blinders on, thinking the internet was going to create some new economy immune from business cylces. The market has a way of punishing those people for that mistake. People who invested in stocks like Web Van got burned, just as students did you blindly thought a Computer Science degree was a free ticket to a 6-figure salary right out of college.
Who said everyone was outsourcing? That’s the point: why is this a big issue? I can’t make heads or tails of the criticisms… or the responses to those criticisms.
If some are to be listened to, yes, because our workers are overpaid. I’m not saying I believe that. I’m trying to break down the rhetoric.
Please.
Well, that’s not my understanding for the poster children of “cheap goods” but that’s ok.
I get that. That’s why I made the comment about buying cheap imports over other devices. What I don’t get is how outsourcing is supposed to be the worst idea, or the contrary that it is some great thing. Neither seem to be the case. It’s a matter of a rapid resource realignment in a few industries. People cannot instantly adjust their skills as fast as businesses can shop for employees. There’s always some pain in these cases. Most economists that I’ve read don’t go any way to say that outsourcing is necessarily a bad thing, and the consensus seems to be that it is a good thing in the long term for both America and our partners. Great.
Well, the market paid for a low-supply, high demand trade, and years down the line it is oversupplied and no longer in demand. No surprise there. But neither is it a surprise that people who were making five-figures might be making no figures for a while until they readjust. We cannot be blind to this effect. Even if we start outsourcing tech support to India, and demand rises and the workforce responds… what happens to our good pals when salaries start rising as they so often do?
Yes, yes, it is inevitable, yadda yadda yadda. The point is the transition period that happens. For a guy who just lost his job, “eventually” finding another hardly helps him today. And that’s what it seems to boil down to. Generally, outsourcing is ok, just like importing is ok, if it helps your companies operate more efficiently. But these transition periods can be painful to some when companies created a demand, had it met, then fail to use it in lieu of some other supplier. Is it really a surprise that some people won’t be pleased as a pig in shit?
Would you say that we should have refused to allow machines to replace people in large numbers? I don’t think you would say that. However, that is exactly what the anti-outsourcing crowd is saying.
They are claiming that outsourcing is tantamount to evil, that nothing positive will come out of it, that it will destroy our economy by eliminating jobs. Many good things have come about due to mechanization, perhaps it did also require struggle and hard times for many people, but that does not mean it was evil and wrong.
It is just another aspect of a global free market economy, something to be monitored just like any other economic factor, but not something inherently bad to be avoided at all cost.
When you actually post something to rebut I’ll consider it. If you would like to take a shot at actually responding to what I posted, instead of hand wringing hysteria about all our jobs becoming burger flipping or ringing up at Walmart while the good jobs go to India to pad the pockets of cigar smoking capitalist cartoons then knock yourself out. I’m not going to waste my time on rebutting something so disconnected from reality as your little 2 or 3 line jabs though…unless you’d like to take a shot at actually proving your fantasy? I await your reply with baited breath…
I think I’ll bow out of the rest of the discussion. It seems so repetative to me having seen it all before. Besides, John Mace is much better at explaining this stuff than I am IMO.
But isn’t importing essentially the same as outsourcing? In my old industry, for instance, imported components have very nearly eliminated large-scale manufacturing of those components in the US., simply because of costs. The net result is the loss of the manufacturing jobs associated with those components.
Sorry if my posts seem to be arguing against you, when you haven’t necessarily taken a position yet. Take those issues as directed at the thread at large, not necessarily just at you.
As to the above point, is there really something fundamentally different about being laid off because of outsourcing as opposed to being laid off for some other reason? That goes back to my earlier post about needing to define the problem statement. Outsourcing, as you seem to agree, isn’t a “problem”-- it’s a fact that has to be dealt with. The problem, to the extent that there is one, is to figure out how to create an environment in this country conducive to investment. The solution proposed so far (increase taxes) will only make matters worse.
What is “the economy”? Peope have a habit of confusing their own economic interests with that of their neighbors. One of the principals of economics is simple math and logic: If there is a finite amount of stuff out their, then if you want more of it, someone has to have less of it.
:dubious: :rolleyes: :eek:
A better question than “what’s the economy”–what does “good for the economy” actually mean? Higher stock market values? Increased GDP? Higher wages? Lower inflation? Increased foreign trade? “Good for the economy” has always been, to me, one of those catchphrases like “family values” that can mean just about anything the speaker wants it to mean.
It seems to me that outsourcing will likely increase stock market values and depress wages. So if you’ve got one person who thinks that the most important part of the economy" and another who thinks higher wages are the lynchpin of the economy, they’re going to have widely diverging views on whether outsourcing is “good for the economy.” Obvious, I know, but I think that divergence is fueling the bulk of this debate.
Even with investment and job growth, it is still difficult at an individual level to transition from one industry to another and continue supporting the family. I think that is one of the big problems. At a macro level it is natural and in a global economy, we can’t not do it.
It seems a big part of the problem is to figure out how do we help individuals transition from one set of skills to a different set of skills. And the reason why we would want to help is the same reason that we educate our populace in the first place.
I’ll preface my follow-up by saying IANAE(conomist).
Perhaps I used “sectors” wrongly. I didn’t mean market sectors. I meant socioeconomic classes. Must the working poor or Joe Sixpack “go out of business” - become economically disenfranchised - to keep the greater economy healthy? I think saying “yes” is premature before we explore more scenarios.
Maybe there’s no objectively “right” balance, but it ought to be possible to do better by all these folks who are losing their jobs. In the long term by economic restructuring, perhaps, but in the short, gotta-eat-and-buy-stuff term, large-scale social intervention would seem to be the only practical way.
They probably don’t. More important is that many businesspeople believe they do, and we get markets where small players simply cannot survive, and even big players feel they have to cut meat off the bone to get by.
Conservatives tell me that everything will be great if we all maximize our own self-interest. I’d just like to know where a system that presupposes maximum ruthlessness on everyone’s part is supposed to end.
I’m not sure I understand what you are saying. Are you suggesting that an entire socioeconomic class is “going out of business”? But yes, it is necessary for EVERYONE to face the possibility of unemployment in order for the economy to be healthy. There is no way to guarantee everyone a job. Maybe you can clarify your position, because I certainly don’t equate being laid off with being “economically disenfranchised”. The latter implies that someone is prevented from getting a job.
What’s your proposal?
I honestly don’t know how to respond to that. New companies are being formed all the time and some of them DO become large companies. You are making a blanket statement without any supporting evidence. Pick up a copy of Business Week or some other similar magazine when they do their “Hottest New Companies” type articles.
I can’t speak for the consercatives you are talking about, but I certainly wouldn’t say the free markets ensures everyhing to be great. I just haven’t seen any evidence that another system results in a better overall economy.
Outsourcing comes about because a company finds that it can buy something for less than it costs the company to manufacture it. An example: I was shocked to find that my wife’s new Saturn car had a japanese-made transmission. Basically, the bean counters at Saturn found out that making the transmission in TN cost, maybe , $400. They can buy the unit from Aisin (japanese mfg.) for $390 -savings $10-multiplied by 1 million, that’s $10 million. Good for GM-but bad for us! The reason is: none of those Aisin workers are paying taxes, social; security, or buying Saturn cars. So yeah…we save some money up front, but long term-we LOSE, hugely!
Wrong. The way we loose hugely in the long runis if we protect our companies from competition (foreign or otherwise) and give them no incentive to innovate and reduce costs. GM needs to sell its cars everywhere, not just in the US. Unless, of course, you want to turn the US into something like India was in a decade or so ago-- imported cars had large tarrifs, so the rich got their Mercedes, and the middle class drove P.O.S. knock-offs made domestically. The world is littered with 3rd World type economies whose governments tried to boost their domestic industries by protecting them from foreign competition.
And don’t be so sure that Japanese transmission isn’t made somewhere else, and labeled with the logo of Japanese manufacturer. Car parts, even subassemblies, are notoriously global in their make-up.
This illustrates that everyone has been using incorrect terminology. You are complaining about globalization, not outsourcing. That my Saturn’s tires are made by Firestone and not GM is just as much a case of outsourcing as the engine being made in Japan. You’re objecting to it leaving the US, not the boundaries of GM. Unless it is your position that nothing but raw goods should be imported, you’ve got to support globalization to a certain extent.
In certain cases you can argue that globalization hollows out a company, giving its competitive advantage away. But no one seems to get quite as worked up about that.
:eek: