Sorry Coll, my last post was in reply to Sailor’s post not yours. We just arrived at the same time unfortunately.
Boo Boo Foo, I agree with you that protectionism hurts foreign countries as you can see if you read my earlier posts. The point I was trying to make in my last post was that, some people think protectionism helps Americans at the expense of foreigners but this is not so, the money one American is getting is coming out of the pocket of another American. That was my point. Obvously foreigners lose in the sense that they lose the job but that is a byproduct.
That’s right. I did not mean to imply that the government owes me a career in a particular industry. Ideally there should be free trade globally but since some countries do have protectionist policies (Japanese steel industry comes to mind), at times it may be necessary for us to do the same in order to provide a smooth and gradual transition to Globalization.
I realize that to the plant worker who never left his town or the IT worker used to making $60,000 for what is essentially a back-office job, all they see is some foreigner taking their job away.
Boo Boo Foo - I for one am looking forward to a return to the Golden Age of Austrailian Trade that brought the world Crocadile Dundee, Foster’s Beer, Elle Macphereson and Yahoo Serious.
**Susanann, ** and other immigration restrictionists, you would do well to keep in mind that the increase in hiring of IT workers under H-1B and other visa categories occurred in a context of explosive growth in the number of people employed in such occupations overall in the U.S., and has decreased over the past 1-2 years in tandem with a recession that has affected overall employment numbers in these occupations. The data I have seen by no means suggest that H-1B workers are replacing American workers because they are willing to work for lower wages (and as I have stated above, any employer who paid an H-1B worker less than a similarly situated U.S. worker would be breaking the law anyway.)
Some relevant snippets from “Education and Training Funded by the H-1B Visa Fee and the Demand for Information Technology and Other Professional Specialty Workers,” Linda Levine, Specialist in Labor Economics, Domestic Social Policy Division, Congressional Research Service, July 1, 2003 (I looked, but was unable to find this report online; if anyone else feels so inclined and finds it, please post a link here):
The report is primarily concerned with the results of competitive disbursements of the nearly $350 million raised by H-1B fees; these funds, which come from a special $1,000 government fee per H-1B application which does not apply to any other visa category, are intended for the retraining of U.S. workers in fields where the supply of qualified workers is short, mostly technical and health care fields. Just thought you might find that snippet interesting. Anyway, on to p. 10 of the report:
“The labor market prospects of IT and many other workers has reversed course in recent years as employers have curtailed hiring and/or conducted layoffs in response initially, to the recession, and subsequently, to the sluggish pace of economic growth. The data…show the much harsher reality of recent labor market conditions for IT workers. Their much-changed circumstance also is reflected in firms’ importing many fewer temporary workers in specialty occupations: H-1B visas approved for initial employment at non-exempt employers did not reach the legislatively set cap of 195,000 in either FY2001 or FY2002, according to the INS, when they numbered 163,600 and 79,100, respectively.
Employment
About 2.5 million persons worked in IT jobs as computer systems analysts, computer engineers, computer scientists and computer programmers in 2000 – more than twice the number in 1989, the prior peak in the business cycle…Employment in these occupations increased by 121% between 1989 and 2000, which was well above the average increase across all occupations of almost 17%, according to U.S. Bureau of Labor Statistics’ data…
With the advent of the recession in March 2001, the number of employed IT workers dropped sharply, by 8%, between 2000 (the latest peak in the business cycle) and 2002.”
So how you can blame a couple of hundred thousand H-1B workers, nearly half of whom are not IT workers in any case, for the drop in employment and salaries in IT professions is completely beyond my understanding, as well as that of many reasonable economists.
Some more statistics from p. 13 of the report:
“H-1B Petitions Approved for Initial Employment by Occupation of Beneficiary
5/98 – 7/99 FY2000 FY2001
Total, occupation known 134,400 135,362 200,116
Computer-related 76,300 74,551 110,713”
If you are paying attention, you will see that the proportion of H-1B workers in computer-related occupations dropped sharply along with total U.S. employment in computer-related occupations. Makes sense to me: if you’re already laying off U.S. workers, why would you want to pay $1,110 in government filing fees, plus probably a couple grand more in legal fees, plus God knows what in related administrative and compliance costs to hire a foreign worker, if you have to pay him the same as a U.S. worker anyway?
Now if you’ll excuse me, I now have to go convince the Agency Formerly Known as INS to follow its own rules, which is always fun when the person enforcing the rules doesn’t know the rules. New business may be slow, but that doesn’t mean I’m not busy.
Well, I have a hard time understanding people getting so worked up about countracting out work to people in other countries.
It’s my lunch hour, and I’m sitting at a desk in Toronto. The rather tortured UML (first draft, new CASE tool) behind this window is for a project to be run in France. Most of the past three years have been spent working on another project, which will go into service shortly in China. Yes, the chinese also outsource. Some programmers and engineers in China could possibly have done the work, but maybe not as cheaply for as certain a result. Did we take “their” jobs? I don’t think so.
I can’t help but see this as very similar ethically to outsourcing american work to India or elsewhere. Did the guy one row over from me, who works on a project in the US, take an american job?
I’m not unsympathetic to people who can’t find work, I just don’t think it’s a special case when the work taken offshore is mental rather than physical or menial, or even when the work is lost to another country rather than to changing technology, changing social mores, or anything else that’s ever damaged an industry.
Nitpick: I don’t believe Microsoft (as a corporation) pays any taxes. IIRC, they write off all of their employee stock options as expenses, and are thus able to juggle the books so they don’t have to pay taxes at the end of the year. Not sure if they get anything back, though.
Hey, great attitude.
I wonder if you’ll still have it if you lose your job, and are facing bankruptcy, eviction, repossesion of your car, & finacial & personal ruin.
And, of course, all the family troubles, depression, humiliation, loss of self-esteem, & social isolation that comes with it, of course.
I was unemployed in a small Southern town for five years, because the local factory was “outsourced” overseas, & all the secondary/retail jobs dried up.
I didn’t have any cash–my entire life savings were wiped out. I certainly didn’t have enough to find work elsewhere.
I’ve had the “Globalization” sticked rammed up my you-know-what, and I despise every single politician who is in favor of it. :mad:
I dunno, maybe quality? Prestige? Technology/innovativeness?
Price isn’t the only factor. The Big 3 automakers are trying desperately to get sales by offering huge incentives and 0% financing, but they’re still losing market share to the japanese manufacturers because of quality.
Prestige-A rolex doesn’t do anything a $5 drug store watch can’t do, but costs a few thousand times more.
Technology/innovation- Nokia has around 50% market share. If a chinese-designed and produced cell phone came out at half the price, people would still buy Nokia phones because they are consistently the best designed phones and have the most/best features. I also couldn’t imagine a company picking some chinese designed servers over something made by Oracle based solely on price.
I could go on if you like, but The United States, Japan, et al. haven’t been able to compete on price alone for a long time. Hasn’t stopped them. (Japan’s problems aren’t due to the fact that they can’t compete on price.)
You truly don’t get it, do you?
There are 6.5 billion human beings on this planet, and UNESCO estimates that fully ONE BILLION of those people have to exist on less than one dollar per day. Think about the incredible poverty, and disease, and malnutrition which stems from such a dreadful fate.
I find it incredibly tacky and innately offensive when I hear a citizen of the world’s wealthiest country complaining about how hard their life is. (And I suspect I’m far from alone too). It’s just plain rude playing the sympathy card under such circumstances.
Each year, thousands of immigrants arrive in the United States and through sheer hard work and tenacity, they create businesses and productive lives for themselves. Nobody, aboslutely nobody owes you a favour. The ability to adapt is yours. The choice to do so is also yours. But to complain about how hard life is as an American in the context of the endemic poverty which exists in this world is just plain rude.
Think about it… one in six people on this planet have to survive on less than one dollar per day…
So you have two choices here - (a) you can show some magnanimity and pull your head in a bit or (b) you can try and justify your position whereupon I will REALLY amp up my rhetoric.
Bottom line? Even the lowest strata of lifestyles in the USA is demonstrably higher than at least half of the world’s population. Moreover, the majority of the Western World has done it pretty tough at times in the last 100 years. The assertion that an American who whines about how tough life is more important than a poor soul elsewhere on the planet who does so somehow tends to find pretty deaf ears amongst non Americans. It truly is an offensive thing to hear. You can’t eat your cake and have it too. You can’t go through life screaming “We’re Number One!” and then ALSO expect sympathy when things don’t go your way.
Nitpick: You are absolutely wrong. Last quarter they paid something like a BILLION in taxes. Like every corporation, they “write off” all expenses from their ballance sheet. Unless they are operating at a loss, they pay taxes.
Hey…people lose their job all the time. It sucks. They find a new one. Would you feel better if your factory moved to Wisconsin or burned down or simply went out of business?
Yeah, **Bosda, ** a little perspective might be helpful. Yes, being unemployed sucks. My mother is unemployed right now for the second time in the past year, and as she is 60 years old and has multiple firings on her record, the odds of her getting another solid job are rather long. However, she still has perspective about how much easier her life is, even more so than her mother’s or grandmother’s were.
And every time I think my job sucks, I try to think back on my old job, where one of my duties was serving as an interpreter in political asylum cases. Few things help one gain perspective more apidly than a solidly prepared political asylum case; when you hear about how people live in grinding poverty and malnnutrition AND get to see their relatives torturesd and killed in front of their eyes, or be tortured themselves, mere unemployment begins to seem not so bad.
People have to adapt to new conditions in order survive. Of the ranfe of conditions that a human being might have to adapt to in a lifetime, mooving to another town isn’t so terribly high on the difficulty scale.
Let me address this.
First, I’ve got about a decade or slightl y more dealing with developing world economies – the MENA regiona and Africa. Right now I’m in investment funds, previously direct investments for a major Euro multinational in the pharma-bio-tech sector.
Well, super!
I dunno, how does one expect developing nations to compete on quality, prestige, technology?
Perhaps one should reflect a bit.
First, quality. Quality is not an easy thing to achieve. I can tell you that from direct experience, instilling the habits, the management expertise, the attention to detial, etc. to achieve quality on a consistent basis is itself a major developmental hurdle.
Those ‘technology transfers’ – process engineering if you will – are an important part of improving economic performance in the developing world. One can not assume the skills are present. They are not, although obviously they can be developed. South Korea has largely done so, as has Taiwan, but note that both did so by climbing up the ladder from less skilled, lower quality manufactures to higher quality, and it takes time. Decades.
Second, in general competition on quality and technological innovation require sustained capital investments. Again, the developing world is largely capital starved. Most East Asian capital, despite the imagery, in fact was interanally generated from private domestic savings and generally retained earnings, not from FDI flows. Again, it is painfully slow to do this in isolation, if not impossible. Certainly the US derived, if we look to historical examples, much of its initial capital base from foreign trade and capital flows, in its case however benefitting from large FDI flows more so than present developing nations.
So again, one can not simply assume that it’s so easy to just say, oh compete on prestige or quality or technology. All these are largely generated in the West or in the developed nations.
Well ain’t that sweet. And one does notice the examples are developed world to developed world.
In short, one needs to understand the structures and the economics when proposing something.
A comment on the whinging on about outsourcing:
First, most if not all the comments implicitely assume a fixed pie. That is that there is a fixed amount of work out there, and if it does to a foreign country that means less for US. Very clearly that’s a false presumption, one need only examine the trade based growth between Europe, or indeed if we look at the US as itself an enormous Free Trade Area. Greater efficiencies allowed for through trade enabled specialization have allowed for overall economic growth. The India outsourcers themselves buy products and services from the international market, including the US, for example. To fixate on only one portion of the equation is analyticall bankrupt and frankly ignorant and stupid.
Second, the structure of the complaints strikes me as precisely the same as what I heard back in the 1980s in re Japan when every other jingoistic fool was shrieking on about how Japan was taking over the world, how there would be no car production in the US etc. etc. etc.
Looking to the 2000s, we still see a major car industry in the US, mfg continues, but at more efficient levels with ever improving quality, and indeed Japanese and German makers relocating to the US for a variety of reasons (although in part regretably from trade distorting barriers, which represent a direct dead weight loss to the economy.)
The problem in all this is (a) trade gains while larger than trade losses in almost any analysis we can look at, are widely spread, so that for any given individual they are only dimly percieved, if at all (e.g. the entire IT expansion in the US was more or less enabled by the massive foreign capital flows into the US in the 1990s - it would have never happened at domestic US savings rates w/o a massive fall in consumer consumption. Those capital flows would not have happened w/o trade), whereas the pain is highly concentrated and localized. (b) People like Susanne or whatever her name is have only the diimmest and most politically skewed understanding of trade economics, and the body of people willing to demagogue the issue and used distorted and partial economic analyses (e.g. counting up the costs, never looking at gains) is, well immense relative to those who understand the issues. © There is a tendency among some free trade advocates, which I hope I personally avoid, to pretend that there is not specific pain that needs to be addressed. E.g. it seems relatively clear from emperical economic analyses that trade does indeed unambiguously hurt unskilled workers in the developed world. Frankly, that is utterly unsurprising given that vast ‘over supply’ of unskilled labor in the world versus the demand, and given the cost structure present in the developed world. Now, it is also equally clear that protecting these unskilled workers via bullshite ‘fair trade’ rules imposes real and substantial costs on both the developed world, which can generally bear them, and the developing world, which can not. Impoverishing for both.
In my opinion, such unequal outcomes are best addresed through government side payments to the injured parties, although such side payments should be economically or market oriented, e.g. in well funded worker training programs and in similar facilities to help enable work force flexibility and allow labor forces to take advantage of new opportunities. That is how one makes everyone richer and one continues to increase the size of the pie.
Now, given my personal position, I can give a fuck if folks like Bosda and Susanne impose self-impoverishing protectionism. I’ll profit one way or another. However, if one want to make the pie bigger, one should work towards reasonable policies, not policies that have clearly shown to impoverish.
:smack: I misread.
I thought Boo Boo Foo said “What can a DEVELOPED country compete on if not price?”
Obviously my post made no sense, since he said “developing” not developed.
This is why i rarely post in GD. :o
Some more anecdotal food for thought on L-1/H-1 issues:
Neither category, as I have explained repeatedly before, is primarily used to hire low-wage, entry-level professionals from India and China. I have drafted literally thousands of H-1 and L-1 petitions in my career (and BTW, there’s at least one decent-paying job for a U.S. worker directly created by immigration).
It is extremely expensive to arrange and pay for international relocation expenses for a family; one of our major clients told us their average ballpark figure for a transatlantic permanent relocation for a family of 4, with cost of living differentials, home leave, benefits expenses, shipment of goods, immigration, etc. is about $1 million. Obviously, the client is not willing to lay out that kind of cash unless they think the net benefit of the transfer will be well in excess of $1 million. This client, as well as most of my office’s major clients, tends to transfer three types of people: 1) high-level managers who are leveraging a particular kind of expertise (generally regional expertise) to benefit the headquarters of this global multinational; 2) mid-level managers who are on a fixed-term rotation of 3-5 years to develop a broader management background for career development purposes (this is a company where people tend to spend their entire careers); or 3) R&D people or others with a very specific and difficult to duplicate area of technical expertise, who come in for a fixed term for technology transfer purposes – either to transfer their own expertise to the U.S. operation, or to gain expertise primarily located at the U.S. operation and transfer it to the company’s overseas operations. (International R&D collaborations are increasingly the norm rather than the exception in the commercial R&D world, as well as academia). Keep in mind that U.S.-based employees also relocate overseas for many of the same reasons, and indeed my firm handles the immigration side of those relocations as well.
As for H-1B employees, again a significant proportion of these (recently about 50%) are NOT used for IT jobs. My office’s clients do hire H-1B IT workers, but they are paid the same salaries as comparable U.S. workers. I do a lot of H-1B petitions for people with extremely specialized skills: Ph.D.-level chemists, engineers, medical researchers, and the like. These people are hired because they were the best individuals to fill a very specific role, one which couldn’t be filled by Joe American Schmoe. The company wants their very specific expertise, and is willing to pay extra in terms of legal fees and government filing expenses to get the expertise they need; immigration and citizenship concerns are secondary, because if they hire the right person who will produce for them, the potential payoffs are so significant that even $10k in legal fees is a meaningless amount of money. If you are a company whose entire bread and butter is based on creating novel (and patentable) products, you need to hire the best of the best as a matter of survival. It’s very much a case of innovate, or die.
And if the company creates a new product for manufacture, the secondary jobs created for U.S. workers in marketing, manufacturing, sales, finance/accounting, and all other ancillary business services are what keeps our economy ticking. If you take the Ph.D. researcher and send him back to his native country, his entire career’s worth of innovations are going to be making money for his own country, not the U.S.
- I had no unemployment. Denied.
2)How is my life less important than somebody else’s? - I had no health or dental care for those 5 years. Wanna know what my health is like now?
- Australia & other countries have an extensive social safety net. A variety of programs to help the unemployed. Less so here, and vastly less so in Tennessee, where no matter how bad the economy is, the view of most citizens is “if you ain’t got a job, y’all are lazy”.
- “America is the wealthiest country” blah blah blah. This somehow translates into “Bosda is wealthy”. HUH? Just because a handful of people are ultra-wealthy, doesn’t make the rest of us rich.
[QUOTE}1) I had no unemployment. Denied.[/QUOTE]
The last thing I want to do is turn this thread into a Bosda slam-fest. But IME unemployment is usually denied in situations where a) the person is fired for misconduct, or b) the unemployment agency decides that the person is not looking for work hard enough, or has refused suitable employment. Of course, if you’re saying your unemployment ran out (which I’m sure it would have over that period of time in any case), that’s a whole different story.
It isn’t, but neither is it more important, even if you’re an American.
Dude, I feel for you, just as I feel for anyone who is without access to health care. I’ve been in that boat myself, even during periods when I was working. I even paid several grand out of pocket to fix a leg I broke while uninsured. And that’s the most basic of care, and something where treatment cannot be delayed.
The health care system in this country definitely needs fixing; there are tens of millions of employed people with no healthcare coverage, and even more with inadequate healthcare coverage. Medicaid and Medicare are a mess and need fixing. But all that is outside the scope of this thread.
Again, all true, but outside the scope of this thread. And my point above is that historically, people either adapt or fail. Moving to another town for work IMO falls into the “adapt” category.
Nobody is saying you are wealthy in absolute terms; we simply have no way of knowing. What some of us are saying, though, is that even if you are poverty-stricken by American standards, a) you are still far better off than the vast majority of the rest of the planet; b) your economic situation is not necessarily the fault of free trade and/or immigration; and c) even if it is, this may be the natural result of much larger economic forces at work, and may be for the good of the U.S. and the world at large in the long run.
I’m sorry you feel you’ve been a casualty of the current economic environment, but 1. you still have options to improve your situation, whether or not you like them or choose to exercise them; and 2. No matter how crappy you think your situation is, most other people have it worse.
>> I had no unemployment. Denied.
Millions around the world never have any unemployment and live in abject poverty. people are dying by the millions of hunger, contaminated water and diseases which are easy curable. So, when you are dead from hunger, lack of potable water and troprical diseases, then come and complain. In the meanwhile, there are hundreds of millions worse of than yourself.
2)How is my life less important than somebody else’s?
It’s not more important but their’s are no less important either. They have the right to the same opportunities as you have and I have the right to buy from whoever offers me the best deal.
- I had no health or dental care for those 5 years. Wanna know what my health is like now?
I dunno but I am guessing you are still alive which is more than millions can say. And I bet you are better off than many other millions who are barely alive.
- Australia & other countries have an extensive social safety net. A variety of programs to help the unemployed. Less so here, and vastly less so in Tennessee, where no matter how bad the economy is, the view of most citizens is “if you ain’t got a job, y’all are lazy”.
No, you got that backwards. it is more like Uganda & other countries have no safety net becaause they cannot afford anything.
- “America is the wealthiest country” blah blah blah. This somehow translates into “Bosda is wealthy”. HUH? Just because a handful of people are ultra-wealthy, doesn’t make the rest of us rich.
What’s that got to do with anything? Who said you were rich?
Jobless Benefit Rolls Hit 20-Year High; surprising economists on Wall Street
Reuters ^ | 07-10-03
State’s Jobless Benefits Fund at Risk of Running Dry Next Year (Titanic is Going Under)
The LA Times ^ | July 4, 2003 | By Marla Dickerson
Oracle to double staff in India to 6,000
Economic Times of India ^ | July 11, 2003
NEW DELHI: Enthused by the tremendous growth prospects in India, global software company Oracle on Thursday launched an e-governance Centre of Excellence in association with Hewlett Packard in Gurgaon and announced its plans to double its headcount in the country to 6,000.
“Both Indian and Chinese economies are running rapidly and there is a growing competition between the two, with a certain amount of overlap. But most companies are going for outsourcing of manufacturing activities to China and outsourcing of services to India,” Larry Ellison, chairman of Oracle Corporation said while announcing the launch of the first Oracle-HP e-governance Centre of Excellence in the world.
Lauding India for its skill-sets in service arena, he said, “We expect more companies to move (to India) and our company to expand here.”
Hmmm, looks like I’m right again.
Anyways, those who still have jobs that did not move to foreign lands, will have to open their wallets to make up for a lot of lost taxes that the millions of displaced no longer pay anymore.
Free trade has a price, and those who support free trade in order to get cheap chinese trinkets will be held responsible. Free traders must(will) learn that there is no “free lunch”.
I don’t know if there’s even a point, but here goes…
Right, everything has a price. We’ll take this as an axiom for the sake of argument. So, the question is, what is the price of restricted trade, whether in the form of tariffs, quotas, anti-dumping laws, subsidized import substitution, or whatever else? What exactly are these costs, and how do they quantifiably compare with the costs of so-called “free trade”?
Feel free to reference some of the classical thought on the subject… the Hecksher-Ohlin model, perhaps Stolper-Samuelson, maybe an Edgeworth Box or two. Or just shoot from the hip and make it up as you go along… enlighten me.
Ummm, nope; it looks more like you’ve presented a couple nuggets of anecdotal evidence that unemployment levels are higher than normal in the U.S. at the moment, which nobody has disputed thus far, and that one company is increasing the size of its Indian operation, which nobody is disputing thus far (in fact, this was part of the basis of the OP).
Nothing you have presented so far has constituted any kind of convincing evidence that the U.S. is going to hell in a handbasket, or that 2.5 million IT workers are going to be unemployed for the rest of their lives because they have been replaced by Indians who make $0.10 an hour. Hell, many of those very same IT workers t were trained in other fields (mostly math, science, and engineering, but even some liberal arts types), but changed careers to IT because the money was better for a few years there. Why shouldn’t they be just as easily retrainable to do something else?
Are you going to bother refuting any of the statistical evidence others have presented? Are you going to offer a solution more complex than “shut the borders and make it illegal for U.S. companies to outsource to lower-wage economies, because it’s mean”? Or are you just going to continue to rant pointlessly? If the latter, I don’t see why anyone should waste any energy on paying attention to you.