Outsourcing labor has happened because some other countries divert great resources into education. Another reason is what another mentioned, that they simply do not have the standard of living to pay for, so of course they can be paid more cheaply. The combination of the two is particularly devestating to the American worker.
Is this a good thing in a very long term sense? Depends on the governments in question. Will they allow labor reform to drive the standard, or stay in the pockets of business? If the answer is that they will resist labor reform, then we see a long term drop in the standard of living. American workers without jobs, and hence no spending power, and hence no market for employers to sell to. Of course this is really exaggerated: not all production lends itself to external labor. But still, I don’t think it such an obvious matter that “protectionism is bad because it steps on my right to employ whoever I want.” Clearly there is some advantage to being an American company else the entire operation would move to other countries. I suspect it is our relative peace, excellent infrastructure, and strong government. That being the case, I find it a little shitty to try to get the best of the first world in terms of influence and protection and the best of the third in terms of cheap labor. Pick a fucking lane.
While I agree with you for the most part, you do realize this position opens you to charges of supporting sweatshops and repressive behavior, right?
“Yeah, our shirts are made in Hamamaramabad for $1.25 a shirt. The costs are so low because the workers are political prisoners who don’t have to be paid at all – and the quality is maintained because they get beaten bloody if they do a bad job. I don’t have time to be concerned about human rights abuses, I have to exercise my right to make money by finding the cheapest sources of labor possible.”
Let’s forget about off shore jobs. If someone in the US is “willing” to work 16 hour days seven days a week at a dollar an hour, should we let companies take advantage of this?
Some of the differences are economic. Engineers in India, say, do just fine. But some are basic rights issues. How many maimings are you willing to accept to get your Etch-a-Sketchs cheaper? How much child labor?
Job loss in the service of greater efficiency, such as a new machine or even lower cost workers in an even playing field (safety, pollution, hours, not minimum wage) is fine, and preventing that is indeed protectionism. Job loss through human rights violations is dumping costs onto those governments (not just the US) who choose not to violate rights. Otherwise, it is morally equivalent to going back to sweatshops.
Look, management’s job is to maximize return for the shareholders. They are not in the job creation business. No one is. There are dozens of tools that management uses to reduce costs, including reducing the cost of employment. There is nothing unique about transfering jobs overseas-- nothing different than in the example I gave in my first post, above.
The argument that “exporting jobs is bad” is simple psuedo-economics. Taken to it’s logical conclusion would meaning closing the borderst to everything and living in complete isolation. Hiring overseas workers is no different than importing cheaper supplies from overseas to use in manufacturing process in the US, or a comsumer buying a TV made in Korea because it’s cheaper than one made in the US.
These knee-jerk libertarian responses don’t address the fact that there is in fact a problem out there. If the Roach quote I used is even half right, we’re missing the equivalent of one major American city’s population right now that should be there in the employment statistics, if this were a normal recovery.
It’s not just programmers, it’s also accounting and bookkeeping, the infamous call-center jobs of course, and even stock analysis and engineering - other than software engineering.
Many of these are jobs requiring a very high level of education. There is no way any society can survive if it tells its populace that there is no way, no matter how hard you work to improve yourself, to get ahead. Won’t fly politically, and it’s the road to demagoguery.
I’ve heard the truly idiotic argument that jobs in health care or some other protected trade are expanding. I call it idiotic for this very simple reason: any economy, from the level of a city block to the level of a nation-state, has to have export earnings in order to grow economically. If all your jobs that are exposed to international competition are being taken away, and your only growth is in jobs that have no export component in them, then you are losing to the rest of the world and your economy is declining. This isn’t a hard statement to grasp; it’s really only common sense.
So that’s the problem defined. I don’t like protectionism either, but that, believe me, is what you’ll get if this continues to be a jobless recovery. If you can’t generate jobs in a recovery, that means in a recession they’ll go down to a level lower than in the previous recession, and that will open the door to demagoguery of the worst sort. True xenophobia, folks. The problem has to be solved. It’s not an option to continue like this.
I disagree. Even a shitty ‘sweatshop’ job to someone who is dirt poor and starving is better than no job at all. To their governments, there are taxes they wouldn’t have had, an influx of capital they wouldnt have had, improved infrastructure in many cases, and the chance that things will get even better. Its not dumping at all.
Afaik, all of todays economic leading countries (including the US) went through the ‘sweatshop’ phase. Hell, many of them started out as being ‘exploited’ by OTHER large economic powers of earlier times. None of them jumped straight from being economically challenged to industrial/service giant without starting at the cheap labor phase and working their way up.
But countries that committ to capitalism eventually DO migrate out of this phase and into a more ‘humanitarian’ social-capitalism. Wages increase, safety increases, standards of living improve…eventually. And those poor governements are left with more citizens paying higher taxes, higher standards of living, and improved infrastructure…what a bitch for them, ehe?
I can tell you from experience, having actually traveled to many of these poor exploited countries, that a job, even if its at low pay with few benifits, is better than no job at all and going hungry. Before you cry about these exploited workers, I encourage you to actually GO to places like India and China and TALK to the workers there (hell, go to Mexico…its close). See if they are unhappy that they have a job and are putting food on their families table.
Pantom:
Call it knee-jerk libertarianism if you like, but actions that the government might take to “correcct the problem” will most likely make things worse. If you are saying that the government is going to do something, so you might as well pick the least of the various evils that are offered, that might be a debate worth having.
I thought job recovery was the LAST economic indicator of a recovery. Isn’t it way too soon to tell if jobs will recover…I thought the most optimistic were saying it would be next year sometime before we know how well (or poorly) jobs recover.
So, how do you know that jobs won’t recover, Phantom? Anecdotally, I know many of my friends in the tech industry that have been out of work are getting jobs again. Myself, I’m starting to get calls again about my resume which is still floating around out there. The company I created 2 years ago, which has been running in the red pretty much looks like we will actually be in the black this year, as companies out there are now starting to give us contracts to improve their network infrastructures…which means that I’ll probably be hiring more technicians and engineers myself soon.
Nonsense. If a factory could be completely automated, workers would be unnecessary. If you could automate the selling process, that would eliminate the need for sales jobs. The jobs are a means to an end, not an end.
It is neither good nor bad in a moral sense.
Because everything you do to obtain a good or service overseas is exactly the same as if you had “exported” a job overseas. Exactly the same.
And these are bad for everybody. Why do you think countries try so hard to eliminate tarrifs?
Well, first, let me establish that I agree that beyond minimal protections for things like child labor and laws against involuntary servitude, insisting that some country have further protections for worker rights is not anything I would be in favor of. Each country needs to work these things out for itself.
Now, as to what the US can do, I’ve posted this before in a slightly different form, and I also pointed it out above: the Asian nations are spending major amounts of money to either fix their currencies to an official exchange rate (China), or significantly slow the fall of the dollar, thereby extending out the period of adjustment that would otherwise take place in correcting our current account deficit.
This shows the decline of the dollar against three currencies: the red line is the Euro (EUR), the green line is the Canadian dollar (CAD), and the blue line is the yen (JPY). Notice that the yen is the odd man out in this series: it stayed close to unchanged against the dollar from the beginning of this year until August, and has only recently begun to fall.
Why the recent fall? That brings us to point the second: it wasn’t voluntary; what happened was that the Japanese budgeted a certain amount to prop up the dollar, and they were running out of that appropriation. As this story makes clear, the Japanese just recently budgeted, I kid you not, more than half a trillion dollars (21 trillion yen) to intervene in the currency markets over the next half year.
The best part of this story is the following quote, which is something you have to read twice or three times to fully get the implication of it:
Now if 21 trillion yen is more than half a trillion, then nearly double that amounts to a trillion dollars. That’s how much they’re going to spend in their fiscal year starting in March to intervene in the currency markets.
I don’t think it’s hyperbole at all to call this economic warfare, directed at us. Our government should be calling them on this; but you don’t hear a lot about this enormous intervention from the boys in charge in DC. They have made it clear they want a weaker dollar, but they rarely say anything about this Japanese situation. And the Chinese are helping out, along with Malaysia and Taiwan. If you subscribe to the Financial Times, see the Martin Wolf column entitled “The underrated dangers of the dollars orderly decline”, which goes into this in detail.
Given this enormously overvalued dollar, the “global labor arbitrage” becomes irresistible for most companies. How could it be otherwise, really?
The longer the adjustment of the currencies takes, the worse things are going to get, IMO. And the above intervention is very much within the power of our government to stop, if they had the will to do it.
Oops, I misread that. Sorry.
21 trillion yen would amount to 194.5 billion dollars, give or take.
40 trillion yen winds up as 370 billion dollars, more or less.
Still major amounts of money though.
I’m not an economist, but I thought the reason the Japanese were doing this was to keep the Yen artificially low in comparison to the dollar, so that they can maintain high turn over for their trade goods in the US. I didn’t think they were giving us ‘welfare’ at all…that this was something they were doing in their own best interests, and we WANT the dollar to drop compared to the Yen and other currencies. No?
"Originally posted by Bouncer
Things to do to let companies know you don’t like all the jobs leaving:
Look for made in USA on the product.
Write to the company and thank them for being made in the USA.
Or call them and thank them.
Tell your friends, neighbors, family, worst enemy that “such and such” was made in America, and encourage them to buy the same brand.
"
NUH-UH!
You quoted Gllrnz, not I.
Personally I don’t wonder if IBM isn’t making a mistake. Dell outsourced to India all the help lines, but is moving the business help lines BACK to the US because of corporate customer complaints. The home users still get to talk to India. IBM just announced that they too are moving their call centers offshore. The problem with that, is that where Dells core business is home consumers, IBM’s core business is corporate customers. They should learn from Dells mistake and avoid irritating their primary customer base in this way.
Here’s a query… if you had to pay 40 dollars more per computer but knew you were getting American help desk support… would you pay the difference for that peace of mind? I tend to think that many folks would, though there will always be bottom line folks who only see the forty dollars.
Sweatshops exist because poverty exists and parents are forced to send their kids to work at an early age. They do not exist because parents are evil and prefer to exploit their children. The best way to stop sweatshops is to help poor countries develop and the best way to help them develop is by buying their products and sending them jobs they can do. By refusing to buy their products and give them jobs we are only making their situation more desperate. So what are they going to do now? Instead of sending the child to the sweatshop now the child is forced into prostitution. Sorry but every country and culture in the world was built with the help of child labor and it is just hypocritical of us to say to those who are starving that they should adhere to our high standards or stop living altogether. It is highly selfish of us to want the governments to protect our jobs at the cost of people who are much poorer than ourselves. We in the developed world just do not appreciate how good we have it.
Here’s a follow on question I was too slow to ask…
Would you select the “American Help Desk” Option from Dell for 60-100 dollars more as an accessory on the website for selecting your system (functionally you would just be “upgraded” to their business support service?)
Which is more important to you?
I think there’s a marketing opportunity there for companies that see it that way. Peace of mind and “exclusivity” rolled up into one. I’m not sure if it’s sustainable as a standalone entity, but as an option to a system purchase it might be quite the seller.
xtisme: we’d like the dollar to drop against the yen, and the Japanese would like to see the yen drop against the dollar.
Right now, the Japanese are buying dollars and euros to keep the yen undervalued in relation to these two currencies in order to sell their goods to us. We, to the best of my knowledge, rarely intervene in the currency markets. We might if the dollar began to drop precipitously, I’m sure.
The Japanese, on the other hand, actually budget money to intervene. That they would do better to either not spend the money at all or spend it on some domestic initiative that might help their economy goes without saying. But the Japanese will subsidize their exporters to whatever extent they consider necessary, and they have over the years proven themselves over and over to be impervious to outside pressure to change. In the process they have managed a decade and a half of stagnation, and now their actions are threatening to do the same thing to us. (I’m not an economist either, BTW.)
A “strong dollar” generally means that goods will be relatively cheaper to produce but more expensive for foreign markets, discouraging exports. A strong dollar encourages foreign investment in American equities which brings foreign capital into the US. It also prevents inflation by making foreign imports cheaper.
A “weak dollar” makes American products cheaper on foreign markets and encourages exports but makes them more expensive to produce. American monetary policy tends to favor a strong dollar.
Preview is too time consuming when the servers are slow.