For years it's been manufacturing jobs that have been outsourced to other countries (i.e. Mexico, China, Vietnam). The problem now is that the jobs that tare based in the service economy are being outsourced to India.
Telemarketers, compute programmers, you name it. We're going to be in for a hell of a bad time if we're left with NO jobs in the western world...
"I'm going to fill a dark awful basement with radioactive cockroaches. Yep. Big nasty ones like skateboards on legs, that go click-click-click when they walk. And maybe poisonous. I'm going to starve them for a week.
Then I'm going to catch all the coercive priss-spigots in the world, the ones that want to ban second-hand smoke and dwarf-tossing and beer. I'll smear the rascals with bacon fat, so the roaches won't know what they're eating, as otherwise they might not.
Then I'm going to toss all those greased busybodies into the basement. And whoop. And dance. Ha." - Fred Reed
This isn't new... the new news is that people are outsourcing the outsourced jobs from India to other English speaking call centers that are cheaper.
This issue always scares me, because I happen to know from personal experience:
1) Indian programmers are freaking amazing. The guys know everything it seems, and do the job really well. 2) They are way cheaper to hire than I am.
It's tough, because if a company has to choose, I'd have to say that the Indian guy is the better value for the $$$.
I don't have a comeback here. I really feel like some day I may not be able to get a job - and I'm not sure that there is anything that should be done about it. I suppose I could try to get a Union involved for job protection, but I really don't believe in job protection.
Willful ignorance of science is not commendable. Refusing to learn the difference between a credible source and a shill is criminally stupid.
Meh. Every few years there's a new industry that looks like it will fade due to lower costs of doing business somewhere else. It's just economic reality, the less developed areas are tasked with handling the lower-paying, less qualified work while we play host to higher paying, more specialized work. Remember that "giant sucking sound" Perot warned about before NAFTA? The U.S. went through it's biggest boom ever after that agreemenet.
It's all good. Good for India too, they need these jobs badly.
How is that the answer, though? If everything else is equal, and all that I can offer that is different is my proximity to my employer - and if the employer decides that isn't enough reason to keep me - who am I to tell them what to do?
Sure, I want a job. Don't get me wrong. I'm not volunteering to give mine up, by any means. But what is a company supposed to do? Our customers don't necessarily want to have me work there - they'd probably enjoy paying a cheaper rate. If moving my job overseas does that, are they going to care that it costs me a job? I don't think they do, and I'm not sure they should. Isn't the consumers best interest served if they get the most mileage for their money?
Isn't the business' best interest served if they get the most mileage for their money?
Wouldn't it be selfish of me to force a company (through coercing, strikes, etc. - the weapons of a Union) to keep my job at the expense of the company and the customer?
Before anyone jumps in and argues that the company will not pass the savings along to the consumer - that's just speculation and bias. In a situation where a company is acting in it's best interest, it will try to maximize profit - so initially it might not pass the savings (because you show an immediate profit) but in a competetive marketplace, the price savings will be passed along by NOT increasing prices as soon or through discounts, specials, deals, etc. You generally don't see deflation these days - but people definitely offer "cash back" or "factory incentives" which can be from these savings.
I believe in the free market - I just worry that I can see the writing on the wall. I don't think that means I should try to destroy the wall, though. I think I need to figure out a way to become more valuable through my local presence.
I'm thinking I need to be the guy that brings in donuts in the morning. They never fire that guy.
(edited by Guru Zim on 25.6.03 2247) Willful ignorance of science is not commendable. Refusing to learn the difference between a credible source and a shill is criminally stupid.
Guru, why is it selfish for you to try and maximize your self-interest, yet good business for the company you work for to maximize their self-interest? Both of you are simply trying to make the best situation possible for yourselves, and yet you are willing to sacrifice your well-being for the good of this other entity? That seems somewhat illogical in a purely economic sense to me, as there is no benefit to you at all from this company leaving and firing you. You are out of work, your co-workers are out of work, your local economy suffers due to the sudden drop in consumption caused by however many people now being unemployed, and nationally we as a country are forced to import one more product. To me it seems like you're doing everyone a disservice by not fighting harder in that hypothetical situation to keep your job.
I'm thinking I need to be the guy that brings in donuts in the morning. They never fire that guy.
Exactly, GZ. I deliver pizzas, and since people will always a)love pizza and b) be lazy, I'm in the clear.
Over 1500 posts and still never a Wiener of the Day!
Oliva: You are the weakest link! Goodbye!
Stewie: Ahahaha. Oh God, that's funny. That's really funny. You write your own material? Do you? Because that is so fresh. 'You are the weakest link. Goodbye!' You know I've never heard anyone make that joke before. You're the first. I've never heard anyone reference that outside program before. Because that's what she says on the show, right? Hmmm? 'You are the weakest link. Goodbye!' And ye...ye..yet you've taken it and....and used it out of context to insult me in this everyday situation. What a clever, smart girl you must be. To come up with a joke like that all by yourself. Mmmmm...that's so fresh too. Any Titanic jokes you want to throw at me as long as we're hitting these phenomena at the height of their popularity. Mmmm? Cuz i'm here God you're so funny!
Originally posted by spf2119...You are out of work, your co-workers are out of work, your local economy suffers due to the sudden drop in consumption caused by however many people now being unemployed, and nationally we as a country are forced to import one more product. To me it seems like you're doing everyone a disservice by not fighting harder in that hypothetical situation to keep your job.
I understand why Guru and his co-workers and other American programmers would be worse off (mostly because I have a reasonably strong grasp of the obvious).
But, why is this outsourcing bad for the economy as a whole? Are you (and Grimis, for that matter) arguing that imports are 'bad' for the economy and therefore we should import as little as possible? Is your argument that an economy will be stronger if it relies on as few 'foreign' products as possible because they represent a drain on that economy?
I am saying that the fact that we are outsourcing ever more and more things without really having anything to replace them with is bad for the economy in the long run. We got lucky in the 90's that the internet and a few other technologies demanded a whole new category of jobs be created which helped to allay the loss of millions of jobs to overseas. But what's going to happen in the coming years when those very jobs get outsourced and there's no giant revolution coming on the back end to help fix that? We cannot call ourselves an "information economy" if even the information jobs disappear.
Micro- yes Guru, if you get canned there is a responsibility on your part to adapt. However, I just wonder why it is you seem so eager to roll over and be forced out of a job should that situation arise. No one is talking about federal mandates or anything, but rather an individual group of workers saying "we can choose to not work here if the situation is not to our liking." Why should the company have ALL the power at all times, when the company theoretically does still need employees to survive?
Macro: Yes, people would find something else to do. However, I worry about the idea of an economy where everyone is delivering pizzas and running the Tilt-a-Whirl. We live in a global economy, and the hardest things to export are services, particularly immediate services like food service or amusement or entertainment. They also tend to be the lowest paying jobs. So yes, you can go back to school and learn to be something else. But if 20-30 years from now your options are "fry cook", "movie usher", and "director of shoe sales" it's going to be an ugly picture. Ironically, that would also be the worst thing for those who embrace full unfettered global trade, because suddenly we'd be left with much less to sell to people.
Also, how do you know there's no revolution on the back end to replace those jobs. Even if the U.S. is not an 'information economy' in 5-10 years, why is that a problem? I don't see anyone complaining that we are not an 'agrarian economy' anymore. And, I don't see how you could argue that this change is bad in the long-run.
With a primarily capitalist system, the economy will constantly be adapting to the prevailing conditions. This is captured by Joseph Schumpeter's theory of 'creative destruction' (some economists also call this 'the churn') which governs the market economy.
So, as conditions change and we lose our competitive advantage in one area (such as farmers or programmers), we gain a competitive advantage in another area. This is captured by the idea of comparative advantage, which should be the guiding principle when deciding which goods to produce and which goods to import.
EDIT: How do you propose to dictate to the companies which jobs have to stay in the U.S. and which they can fill elsewhere?
Also, why are service jobs hard to export? Service jobs include financial services (investing, banking, risk management, etc.), consulting, accounting/auditing, the legal profession, import/export firms, delivery/packing companies, and many other exportable and handsomely compensated jobs.
The reason I say what I said about 'information economy' is because when people mention that manufacturing is disappearing and farming is dying and such they are told "yes, but we are entering a knowledge and information economy so don't worry about it. Go back to school and learn to be a computer programmer and you'll be fine."
As for the latter part of the statement, there is nothing that demands our economy gain new competitive advantages. Thus far that has been how we have been lucky enough to blunder along, but there is no reason why we cannot find ourself unable to overtake our outproduce other economies. Look at Japan, still flailing trying to find their edge again, with a recession that is now verging on a decade long as the other Asian nations have caught up to and surpassed it in productivity. Why shouldn't that be able to happen to America, a nation which is even more open with its willingness to let its companies relocate jobs and capital abroad?
You use the word mandate which is not something that I think was fitting in the topic, which I fear we've veered away from as we move to a more world based issue. I am saying the American worker has a right to fight to keep his or her job in this country, and if that means defying or striking against their company, so be it. On the macro level though I would like to see something done where we say "if you want to stay in this country with your headquarters, reaping the benefits of American laws, American contracts, and the easy access to the American market, but you want to send your jobs overseas, then you have to pay for that priviledge."
As for the notion of jobs being exportable, again the problem here goes back to competitive advantage. In all of the fields you mention there is no reason they cannot be done in the countries they are used in most likely for much less money, as well as having a better handle on the needs of the local market. So yes, Andersen Consulting might open a branch in New Delhi, send over 2 employees to run it and 30 locals will be hired to staff it. Which is great for Andersen Consulting, since those locals will be well educated and cheap to hire, they'll make boatloads more money.
Actually, I mistyped. I meant to type comparative advantage and not competitive advantage. By definition, we will always have a comparative advantage in at least one area and my point was that we should pursue that comparative advantage even though there are short-run costs and some workers will be hurt.
Also, we still hear people complaining about the decline of farming in the U.S. and the lack of manufacturing in the U.S. and how damaging this will be to the U.S. I don't think many farmers were told 'go back to school and learn to be a computer programmer'. If so, I don't think the advice would be taken.
I think the important thing is that if we open our markets, then other countries need to reciprocate. If they do not, you are right in that we will lose our jobs and not receive any in return. This is one of the reasons that the U.S. steel tariff and agricultural subsidies are so damaging to many of the countries in South and Central America. They have opened their markets to the U.S. but the U.S. has responded with protectionist tariffs and our neighbors to the south are bearing the brunt of this. Actually, everyone except for the U.S. steel and farming industry is bearing the brunt of this, Americans included.
Lastly, describing Japan's economy as a tragedy of free trade is not very accurate (to put it politely). By no measure is their economy open. Their economic problems are caused by high savings rates (which renders most of their fiscal policy impotent), a bankrupt banking system, deflation and poor monetary policy in the beginning of their economic problems. I would argue that the fact that their economy is not very open to imports further exacerbates their problems.
I'm really torn on this whole issue. If the Third World is going to pull itself out of poverty and get anything close to our standard of living, then they are going to have to take many of our jobs. Because the good done to their economies is greater than the damage done to ours, this is a good thing.
But Guru Zim said something:
Isn't the consumers best interest served if they get the most mileage for their money?
Yes, but this goes only so far as we view people as consumers and not as citizens. Consumers have choices, but citizens have rights, responsibilities and powers. Citizens can hold companies responsible for their actions. Here in Canada, our largest bank has been making over $5 billion a year profits. Much, if not most, of those profits come from investing in Canadian companies and lending money to Canadians. They have also been closing branches, replacing tellers with ABMs, and outsourcing calling centers to India.
Doesn't a company such as this owe it to the people who are making it so much money to return the favour by helping with employment and leasing buildings? Couldn't they increase their payrole by $1 billion a year (which would employ 30000 people at $33k a year) and make do with $4 billion a year in profits?
I would like to think so, but I don't think it's the government's job to enforce something like this. And the managers running our companies, the boards of directors, and the investors who own the companies don't seem to agree. Maximize profits, maximize efficiency and only view the people as consumers. It'll be interesting to see where this mindset is going to take us in the next 100 years or so.
Any man who hates small dogs and children can't be all bad.
You should reall check out the history of corporations in the US. It's something that I very recently started looking into...
They were not even close to being the dominate forces that they became in the 20th century. Even hardcore capitalists 18th and 19th centuries were wary of the dominance of corporations - and laws were constantly being created that valued citizen rights over corporate rights.
It's a shame things ended up the way they are now...
"It's hard to be a prophet and still make a profit." - Da Bush Babees
Originally posted by spf2119Guru, why is it selfish for you to try and maximize your self-interest, yet good business for the company you work for to maximize their self-interest? Both of you are simply trying to make the best situation possible for yourselves, and yet you are willing to sacrifice your well-being for the good of this other entity? That seems somewhat illogical in a purely economic sense to me, as there is no benefit to you at all from this company leaving and firing you. You are out of work, your co-workers are out of work, your local economy suffers due to the sudden drop in consumption caused by however many people now being unemployed, and nationally we as a country are forced to import one more product. To me it seems like you're doing everyone a disservice by not fighting harder in that hypothetical situation to keep your job.
Why don't we rob people? After all, we're just maximizing self-interest. It's not as if anyone owns the company, right? It's mine for the taking!