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Businesses The Almighty Buck

Tech Firms Defend Moving Jobs Overseas 2064

Posted by michael
from the for-minimum-wage-or-lower dept.
bobcows writes "Yahoo is reporting about leading technology companies urging Congress and the Bush administration Wednesday not to impose new trade restrictions aimed at keeping U.S. jobs from moving overseas, where labor costs are lower. 'There is no job that is America's God-given right anymore,' Carly Fiorina, chief executive for Hewlett-Packard Co., said Wednesday. 'The problem is not a lack of highly educated workers,' said Scott Kirwin, founder of the Information Technology Professionals Association of America. 'The problem is a lack of highly educated workers willing to work for the minimum wage or lower in the U.S. Costs are driving outsourcing, not the quality of American schools.'"
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Tech Firms Defend Moving Jobs Overseas

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  • by Anonymous Coward on Thursday January 08, 2004 @02:16PM (#7916892)
    Or above. Any problems with that? Same goes for Nike and their "sweatshops". No difference as far as I'm concerned.
    • by theLastPossibleName (701919) on Thursday January 08, 2004 @02:22PM (#7916999)
      Or even better: Ship the CEOs, CIOs, CFOs, C?0s to India. I'm sure every company could afford to lose their biggest salaries.
      • Not Funny! (Score:5, Insightful)

        by blunte (183182) on Thursday January 08, 2004 @02:43PM (#7917510)
        Parent should be marked insightful, not funny.

        Executive compensation is way out of whack, and it's because the executive club takes care of itself. Boards of one company are filled with executives of other companies, and vice versa. It's a circle of people writing each other checks out of corporate accounts.

        There's always the line of defense which is, "but we're critically important, and we're doing very difficult jobs." The same could be true of the IT personnel who have been outsourced. So therefore, the executives should be outsourced as well.

        Imagine the millions each company could save if their executives were paid an Indian's King's Ransom, instead of an American's King's Ransom?

        If the American execs want to keep their jobs, well heck, they can take a pay cut to be on par with their Indian counterparts, right?

        The whole executive compensation issue wouldn't be so aggravating if all execs did a good job. But many suck. Many run their companies into the ground, resign when things get bad, get a parting gift of a few million, and then go become CxO at another company. Rinse repeat. Once an exec, always an exec, unless of course you're tied up in a federal country club.
        • Re:Not Funny! (Score:5, Interesting)

          by TopShelf (92521) on Thursday January 08, 2004 @03:04PM (#7917900) Homepage Journal
          While I would agree with most of your post regarding overpayment, execs on each other's boards taking care of each other, etc., there is a big difference between CxO's and IT personnel.

          There are very, very few people qualified to run major corporations, compared to the positions available. That's just an unpleasant fact. In IT, particularly after the job losses of recent years, the situation is more a buyer's market.

          Oh, and given the fact that business is a highly competitive endeavor, it isn't possible for all execs to do a "good job". There will always be companies running into the ground as their competitors move forward. The trick, however, is to ensure that the chief doesn't earn $zillions unjustly along the way (see Gary Welch of Conseco, for example).
          • Re:Not Funny! (Score:5, Insightful)

            by Ensign Nemo (19284) on Thursday January 08, 2004 @03:30PM (#7918520)
            "There are very, very few people qualified to run major corporations, compared to the positions available."
            Funny, I'd say exactly the same thing about IT people. Just because you work in IT doesn't mean you're qualified to do it.
            There are few good CxOs, just like there are few good IT people. Most are average and don't have any special ability or knowledge.
          • Re:Not Funny! (Score:5, Insightful)

            by m_evanchik (398143) <michel_evanchikATevanchik.net> on Thursday January 08, 2004 @04:10PM (#7919321) Homepage
            There is no correlation between executive compensation and company performance. There is a strong correlation between company size and executive compensation. The bigger the piggy bank, the more the chief can pilfer.

            Here is a recent study:
            http://www.cgms.org/media_exec_pay_page.ht m

            The claim that executives are worth their outrageous salaries is scienfically verifiable bullshit.
          • Re:Not Funny! (Score:5, Interesting)

            by Bowling Moses (591924) on Thursday January 08, 2004 @05:02PM (#7920203) Journal
            I wish I could find it, but sometime recently one of the business rags had an article in it where it was found that you could replace the CEO with anyone off the street at random. The stock price would briefly dip, but would quickly rebound as though nothing had happened.

            As for making sure the chief executive doesn't get (Nobody EVER earns $5 million a year and a $40 million golden parachute) an excessive amount, there are options: 1. Pass a law saying the federal and state governments cannot do business with any corporation where the CEO recieves more than Xtimes what the average or median employee earns in a year, whichever is lower. 2. Graduate the tax system more--make it less worthwhile for the company to give out huge paychecks as the CEO will recieve less and less of each dollar spent on their salary package as the amount gets higher and higher. 3. We have minimum wage laws, we can impose a maximum wage law. I like the idea of 1 and 2, but 3 I don't care for. While it is bad for our republic to have such wealth and power in the hands of so few and the concomitantly huge gap between the rich and the poor, it just seems wrong to say nobody can get paid $x million a year. But until we have campaign finance reform it's a moot point since no laws will be passed seeking to limit excessive executive pay, since they donate money to election campaigns and money plays a critical role in politics.
        • Re:Not Funny! (Score:4, Interesting)

          by Ugmo (36922) on Thursday January 08, 2004 @03:49PM (#7918889)
          I agree with both parents (me too!)

          How about instead of passing a law that says no exporting jobs overseas, we pass a law that says executive compensation cannot exceed X times the lowest paid employee's salary.

          Then when a CEO wants a raise s/he will have to give his peons a raise also. Likewise board members,senior management all forms of compensation so the weasels don't find a way around it.
        • Re:Not Funny! (Score:5, Interesting)

          by rizzo420 (136707) on Thursday January 08, 2004 @04:00PM (#7919105) Homepage Journal
          if every company was run by people like Aaron Feuerstein, the CEO of malden mills, the maker of polartec fleece, the world would be a much better place. talk about putting your employees, the real people that make the company, first. his factories burned to the ground in lawrence, mass, a small not so well-off city. instead of taking the money and shutting down the company, he continued to pay all the employees their normal salaries and rebuilt in the same city. he not only gave the employees their fair wages, he also kept the economy of that city going. i don't think there are any others like him. the company went into bankrupcy and is now back out.

          the problem with most companies is they see their employees as expendable. he didn't. he saw each person as someone that brought something positive to the company that was irreplacable. he lost a ton of money because of it, but he didn't care what happened to him, his company and employees were more important. that's a guy taht knows what he's doing. most will continue to raise their salaries. i would also like to compare the government to this as well. the senate recently voted a salary increase for themselves, something that is far greater than the cost of living for them (including all their travel to and from DC). they voted it in during the economic downfall, how convenient, people lose jobs, but they get higher pay. same goes for the governor of CT, my home state, john rowland. he gave himself a raise while the state's economy is in shambles. it's really greedy and stupid and really pisses me off. i don't see it changing anytime soon, hopefully the government won't listen to the schmucks that run the big tech corporations and put restrictions on their doings, or at least raise taxes on the companies that outsource to other countries.
    • by radish (98371) on Thursday January 08, 2004 @02:40PM (#7917425) Homepage
      Yeah what a great idea - except it would totally screw up the local economies of the countries in question. When a low level call centre tech gets paid 5x as much as a policeman/teacher/doctor, how many people do you think will be interested in taking those essential jobs? You can't just impose your standards on other countries - it makes a mess. People should be paid a fair rate for the jobs they are doing in the location they are doing them. I moved recently from the UK to the US and my salary went up slightly simply because the market rate/cost of living is higher here. If/when I move back it will go back down. If I were to move to our Indian office it would go down a lot. But my relative standard of living would remain constant. Seems fair to me.
    • by chunkwhite86 (593696) on Thursday January 08, 2004 @03:27PM (#7918454)
      Or above. Any problems with that? Same goes for Nike and their "sweatshops". No difference as far as I'm concerned.

      Perhaps you've never traveled outside the US. I'm guessing that's the case here. one US dollar in America buys you exactly jack shit. A can of soda maybe. One US dollar in a country like Zimbabwe buys you 10 loaves of bread and a new kitchen table.

      When we heat that some factory worker in China is getting paid "10 cents per hour", you have to take that in context. If a loaf of bread in the same town is two cents, and rent at an apartment building is 80 cents per month, then I'd say that 10 cents an hour is a pretty damn fair wage.

      Just my two cents.
  • Translation (Score:5, Interesting)

    by DrunkBastard (652218) on Thursday January 08, 2004 @02:17PM (#7916904) Homepage
    "We've found a way to line our pockets with more money, so why shouldn't we use cheap, hard to understand overseas techs? We're greedy, plain and simple."
  • by Anonymous Coward on Thursday January 08, 2004 @02:18PM (#7916909)
    'There is no job that is America's God-given right anymore,' Carly Fiorina

    Your job too, babe. Can't wait until we are ordering the latest HP Presario Tandoori Edition on Anandtech or FatWallet.com

  • by PIPBoy3000 (619296) on Thursday January 08, 2004 @02:18PM (#7916915)
    Personally I think it's great that they're moving my job, hopefully to somewhere warm. Uh, I'm going with it, right?
  • by TehHustler (709893) on Thursday January 08, 2004 @02:18PM (#7916923) Homepage
    'The problem is a lack of highly educated workers willing to work for the minimum wage or lower in the U.S. Why should people settle for less? Of course people are going to want more, basic human instinct. Do they think that people are just going to want to work for HP just because its HP? Sounds like Fiorina is very much in favour of a form of slave labour.
  • Problems (Score:5, Insightful)

    by jlechem (613317) on Thursday January 08, 2004 @02:19PM (#7916924) Homepage Journal
    Well I'm a CS student about to graduate with my bachelors degree. I've found that the pay for the jobs out there hasn't decreased it's simply the number of jobs available has gone down the toilet. I used to think I would have a job straight out of college but now I'm a bit worried. There are more people applying for less and less jobs now. I've had several interviews but lost them due to a more experienced guy needing the job that before I might have had a good chance of landing. And realistically how can they expect people in America to work for less money when our cost of living is so high here?
    • by wiredog (43288) on Thursday January 08, 2004 @02:28PM (#7917139) Journal
      to graduate after the dot bomb. A large contraction in the number of companies in the tech sector 3 years ago means more people chasing fewer jobs. Especially in the areas that were the centers of tech. Silicon Valley and Northern Virginia, where I live. I was unemployed for nine months, and I have 10 years experience. Bank account gone, credit card maxed, was a week from starting a job in construction when I got the job I have now. Doing Python on Windows, FreeBSD, and Linux.
      • by plopez (54068) on Thursday January 08, 2004 @02:49PM (#7917629) Journal
        look for small to mid sized companys in health care (hospitals have lots of IT), finance, engineering and manufacturing. Very few jobs exist per se in software companies to start with. Small to mid-sized companies are the vast majority of jobs in the US as well (something like 2/3rds!). If you are in any way competent you can become the company guru and outsourcing is usually not an option for smaller companys (too expensive). Just be prepared to wear many hats.
    • Interesting (Score:5, Interesting)

      by kaan (88626) on Thursday January 08, 2004 @02:49PM (#7917622)
      I've found that the pay for the jobs out there hasn't decreased it's simply the number of jobs available has gone down the toilet.

      This is interesting, because it seems to be in stark contrast to the comments in the story about U.S. workers being unwilling to work for less money. That suggests to me that there are still the same number of jobs in this country, only now they pay smaller salaries, and after some period of time the executives decided that U.S. workers were unwilling to accept those smaller salaries.

      The thing is, as you pointed out, this is not what's happening. There are in fact fewer jobs available, and the salaries are the same (ie, not lower).

      Perhaps a good summary of the article might be: "Well, we're doing the usual blind executive thing, making lots of decisions that we can't really justify to the public because our reasoning is shaky and unfounded. So please just leave us alone and give us the freedom to wreck the U.S. high-tech job market as we see fit. Thank you."
    • Re:Problems (Score:5, Insightful)

      by Malc (1751) on Thursday January 08, 2004 @02:53PM (#7917691)
      "I've had several interviews but lost them due to a more experienced guy needing the job that before I might have had a good chance of landing."

      It's just as tough for the experienced people too - many think graduates are getting their jobs as graduates are cheaper and willing to whore themselves working stupid hours, and be keen about it!

      Think yourself lucky that your financial commitments are lower now than they will be. I have a friend looking for a job right now. He's senior and well paid. He's got a car, a mortgage, a wife, and a baby on the way. Oh, and he doesn't want to work stupid hours, but wants enjoy life a little. Taking a paycut for him is much harder - you don't have the same expectations, commitments, nor are do you have a lifestyle that will get worse. After being a student, virtually amy job will improve your quality of life, even if it's very poorly paid compared with a few years ago.

      Many graduates seem to have the attitude of live to work, although maybe it's because their lives are simpler and that they're younger and they can still party and work without burning out. Wait a couple of years. Trust me: working to live is a much better outlook, unfortunately it brings the stress of knowing that foolish managers will look often look you for somebody with a different attitude. I have the same attitude: I worked stupid hours in the dot com boom but I won't do it now. Why should I break my back, make my life worse, and all to make somebody else rich? Next time I work like that it'll be for my own business... when I finally come up with an idea that sells.

  • by DenOfEarth (162699) on Thursday January 08, 2004 @02:19PM (#7916931) Homepage

    I'm not american, so I can't comment on what the loss of jobs in my field their is going to do to me, but I think this kind of thing should be expected if anybody wants the global economy thing to really happen.

    This could still be beneficial to the american economy, it just means that many of these out of work programmers should look into some of their own ideas and start companies around them, hiring out to the cheap labour overseas. That would probably benefit more people anyways.

    • by cayenne8 (626475) on Thursday January 08, 2004 @02:31PM (#7917234) Homepage Journal
      "...but I think this kind of thing should be expected if anybody wants the global economy thing to really happen."

      Ok, this is the thing I don't understand....and maybe someone can explain it to me. Why would I want a global economy?? From what I can see, it is beneficial to everyone EXCEPT the US. It seems to do nothing but deplete our jobs...standard of living, etc. What possible good can it do for us? It seemed to be better when we led production and innovation in most areas....

      I mean, life is a competition...we use to seem to win, and now we aren't, and it is our own fault for 'giving in' and this global economy our corporations are supporting with these actions is going to cause our spiral and downfall. Keep this up, and we'll lower our whole society's standard of living....

      • Not why, but who? (Score:5, Insightful)

        by truthsearch (249536) on Thursday January 08, 2004 @03:38PM (#7918676) Homepage Journal
        The people who are driving the move to a global economy are large public corporations. The people who believe they will see the biggest short-term gain by using global labor are corporate executives. Their goal is cut costs, increasing their profits and raking in more money for themselves. It's as simple as that.

        Part of the problem is these same executives also have the most influence over American politics, which is why trade organizations like the WTO help US corporations, help some foreign governments, and hurt the average citizen (lack of adjusted minimum wage per country, no requirement to respect civil rights in China, etc.). The reason WTO meetings about public policy are held in private is because if the public heard what our politicians were setting up there would be much larger riots and some of these officials would not get re-elected.

        So it's not about what you or I want. The global economy is about what the upper class in America wants.
  • by sacremon (244448) on Thursday January 08, 2004 @02:19PM (#7916937)
    Given how well HP has performed since the merger with Compaq, perhaps it would be in that company's best interest to outsource the CEO. I'm sure they could save a considerable sum vs. Carly's paycheck.

    .
    • by Embedded Geek (532893) on Thursday January 08, 2004 @02:30PM (#7917209) Homepage
      I've heard this joke beofre, but it makes sense if you look just at the numbers. I can't find her current salary, but Carly was on track for $115M/year [com.com].

      If you reduce her salary to $500,000 (ten times what a sacrificing $50K engineer might make), you can save 2290 well paying (50K) jobs.

      For the life of me, can you imagine any CEO contributing as much to a company as 2290 rank and file workers? Unless they can literally print money, I have trouble imaging how an executive can make that kind of contribution compared to the employees they lead.

      • by ToadSprocket (628571) on Thursday January 08, 2004 @02:53PM (#7917697)
        Not only does she take home a ridiculous salary, she spends enormous sums on everything apparently. My mother works for an electrical contractor in San Jose. They put in $100,000 sounds systems on each of her 2 corporate jets. I am sure she is asking everyone there to cut 15% of their budget every year while she is doing this as well. Add these costs to here salary to get a better picture of what she costs them.
      • by notcreative (623238) on Thursday January 08, 2004 @02:58PM (#7917792) Journal
        I've wondered about this, too. The answer that I've found in MBA textbooks goes something like this:

        The investors choose a management team to take care of their capital and run the company with a profit. If the management team is payed a flat salary, they have no incentive to make, say, 15% instead of 8% profit. Their incentive is to keep their jobs, theoretically by doing the minimum necessary. If, however, their compensation is tied to the performance of the company (through growth targets, stock options, etc), the executives have a personal financial interest in maximizing the value of the company, and thus (in theory) the share price.

        I guess the big flaw in this is that no other member of the company is compensated the same way, while arguably an engineer has the same influence over the success or failure of the company, at least on a small scale. If it works for the executive, why not the front-line worker? The only answer I can think of is that there is no "procedure" for being a CEO. Everything that the company does is a calculated risk, and management requires a high degree of customization. Maybe without this compensation there'd be less incentive to take risks, while the last thing you want to tell your front-liners is to take risks. I'm not saying it's a good answer, but it is all I can think of. I'm open to other ideas. Thoughts?

  • by AntEater (16627) on Thursday January 08, 2004 @02:19PM (#7916942) Homepage
    How long before shareholders demand that their companies outsource their CEO and other executives? It would be only fitting afterall, the problem isn't bad CEOs in America but finding bad CEOs that will work for minimum wage in the US.
  • okay... (Score:5, Insightful)

    by TedCheshireAcad (311748) <ted@fc.AAArit.edu minus threevowels> on Thursday January 08, 2004 @02:19PM (#7916943) Homepage
    The problem is a lack of highly educated workers willing to work for the minimum wage or lower in the U.S....

    Well, isn't that kind of a fundamentally flawed problem? As a person pursuing a degree in higher education (dropping $100,000+ on said education) I don't feel like it would be worth it to work for minimum wage or less. I mean, isn't that really one of the points of college, so you don't have to work minimum wage?
  • by glinden (56181) * on Thursday January 08, 2004 @02:19PM (#7916944) Homepage Journal
    In her comment, Carla Fiorina fails to understand basic economics. You can't talk about labor costs and only talk about wages. The cost of labor is the wages divided by the productivity. It is only true that lower wages reduce labor costs if productivity is constant. But productivity is much lower in developing countries because of poor infrastructure, corruption, market inefficiencies, and weaker educational systems. It is meaningless to talk about wages without talking about productivity.
    • by Lane.exe (672783) on Thursday January 08, 2004 @02:29PM (#7917188) Homepage
      But you're working on the assumption that Fiorina actually cares about the productivity of tech support workers in India. If Joe Technical Problem has to call tech support in India, and they do a bad job, it's no sweat off her back. He's already paid her the money by buying the hardware, and chances are, if tech support can't fix it, he's just going to call his 16 year old geek nephew to come fix it. And when he's buying his next computer in 3 years, he's not going to care that he spoke to some crappy, hard-to-understand Indian tech all those years ago. What he's going to care about is that UltimateBestCircuitSuperstore salesgoon who's saying "Yeah, this HP is the latest and greatest model! Look at how many megahertz it has!"

      Face it -- when it comes to things like service, support, and even manufacturing of products that the average consumer is unfit to appraise, CEOs could care less what productivity is like because the quality of these things goes relatively unchecked, except by people like us who know better. But we represent a minority, and as long as the can keep fleecing an uneducated public, they're going to do it. Labor costs to them are nothing more than the wages and materials cost. Productivity be damned.

    • by radish (98371) on Thursday January 08, 2004 @02:30PM (#7917194) Homepage
      So why do you think all this outsourcing is going on? Do you REALLY believe that the HP's of this world don't employ anyone with a better understanding of the basic economics of their companies than you? Come on. They are outsourcing because they can get the same work done for less money. Period. As an employee you are a commodity, if you can't distinguish functionally between 2 commodities then the only discerning factor becomes cost.

      I always liken it to the whole Napster/Kazaa thing. People realised that they could get the same music [software], lose a few unimportant bits (like the cover art [local employees]) and save a ton of cash by downloading [outsourcing]. Now the RIAA [tech workers] are worried that their market is vanishing so they try to get the government to pass laws making it illegal for people to save money. Sounds very similar to me.
      • They are outsourcing because they can get the same work done for less money.

        No, they are outsourcing because they THINK they can get the same work done for less money. This is a crucial difference. Just because an action is taken, especially in the corporate world, this does not mean that the action was well founded, beneficial, or even has the desired effect. It means the action was "sold" to upper management.

        The jury is still out as to whether offshoring will be a good thing, even for the long term bottom line of the corporations employing it. (Not even talking about the general economy, here.) It's become so widespread so quickly because a) it's a quick fix for strained budgets, and b) it's a popular fad in business management circles.
  • by lawaetf1 (613291) on Thursday January 08, 2004 @02:20PM (#7916956)
    Not that I like it, especially as an IT worker, but, hell, that's the nature of the beast. Our dirt cheap goods are possible because we "allowed" loads of manufacturing jobs to go to China. In the end all it really means is that we can't rest on our laurels. And that's probably a good thing.
  • Nice Quote (Score:5, Insightful)

    by ruhk (70494) on Thursday January 08, 2004 @02:21PM (#7916984)
    'There is no job that is America's God-given right anymore,' Carly Fiorina, chief executive for Hewlett-Packard Co., said Wednesday.

    There were never any jobs that were America's God-given right, but the sentiment does make a nice dodge from the real issue at hand.

    What these corporations seem to have forgot is that privelege goes hand in hand with responsiblity. They fight hard to continue to be treated by the government (and thus the nation, by extension) as a citizen with all the rights thereof. However, they forget that those rights come with responsiblity. They move jobs overseas, they keep their funds in offshore tax havens so they don't have to pay taxes, and then they want they want to be treated like legitimate tax-payers. Globalisation is a nice idea, but not when it only serves as a tool to cheat.
  • by rodentia (102779) on Thursday January 08, 2004 @02:22PM (#7917019)

    . . .no job that is America's God-given right anymore,

    . . . .except board and senior management positions of Fortune 1000 companies.
  • The flaw (Score:5, Insightful)

    by bgog (564818) * on Thursday January 08, 2004 @02:23PM (#7917021) Journal
    It works like this. There is basically no job (other than service, like working at a store) that can't be done cheaper by people outside this country.

    It is the governments job to make sure that jobs stay here. I don't think any job is an americans god given right but why does this lady expect an educated engineer to work for min wage? I can get a McJob for min wage. She is essentially saying that HPs workers don't matter to the company. They find no value in their skills.

    I'm not trying to be paranoid here but eventually won't most jobs be shipped over seas to countries who with lower cost of living and governments who don't care. This doesn't sound good for our country.
  • by KE1LR (206175) <ken.hoover@gGIRA ... minus herbivore> on Thursday January 08, 2004 @02:23PM (#7917023) Homepage
    "The problem is a lack of highly educated workers willing to work for the minimum wage or lower in the U.S."

    Definition of Minumim Wage:

    If they paid you anything less, it would be illegal.

  • Race to the bottom (Score:4, Insightful)

    by MillionthMonkey (240664) * on Thursday January 08, 2004 @02:24PM (#7917058)
    Whether or not these jobs are "America's God-given right" is besides the point, Carly, you miserable bitch. Of course they aren't a "God-given right". Nothing is. The real question here is whether the U.S. will act in its own self-interest, or continue to throw its labor force into a low wage bidding war with the Third World.

  • It's not just tech. (Score:5, Interesting)

    by jtilak (596402) on Thursday January 08, 2004 @02:24PM (#7917063) Journal
    Lets face it. If you're a multi-billion dollar corporation and you can get labor dirt cheap in another country wouldn't you do it? Yes there are plenty of qualified, educated American workers. So what? They work for $3/hour in India instead of $20/hour in America.

    We need some kind of regulation to discourage these practices or our entire economy will go to shit. George Bush wants to help ILLEGAL immigrants out by letting them work? Because he is so compassionate?? Give me a fucking break. It is about exploiting people and getting cheap labor so the rich get richer.
  • Make a note (Score:5, Insightful)

    by liquidsin (398151) on Thursday January 08, 2004 @02:25PM (#7917075) Homepage
    Take a look [infoworld.com] at the money being paid to Carly, then tell me again why any American should even consider buying HP ever again when she makes comments like that. An American company is paying her vast ammounts of American dollars, but when the economy's in the shitter, she ships jobs overseas. Good job. And no, I'm not American.
  • by onyxruby (118189) <onyxruby@NOspam.comcast.net> on Thursday January 08, 2004 @02:26PM (#7917097)
    Were going to start seeing new megacorps out of India soon. We've even setup their back offices for them. We trained their accountants, their technologist, and we even set up their R&D for them. They have their call centers taken care of, everything except the front office. Some of these companies are going to start refusing to renew contracts with our megacorps and are just going to start their own with their fully trained staffs. Their getting the back office profit, how much is left for a front office? Perhaps they'll turn around and outsource that to the originating corp?

    On top of this, can someone please explain how sending good paying jobs out of this company is good for the economy? Competitive advantage doesn't mean anything if all the competition is doing it. The jobs that are replacing these are the low wage jobs in fields like retail that don't have things like health insurance.
  • Also (Score:4, Insightful)

    by bgog (564818) * on Thursday January 08, 2004 @02:27PM (#7917112) Journal
    She also says,
    "Countries that resort to protectionism end up hampering innovation and crippling their industries, which leads to lower economic growth and ultimately higher unemployment,"


    What value to the country does an 'industry' have if they send all the jobs away? Some tax bucks, sure, but a company with jobs is much more valuable to the country.
  • by igaborf (69869) on Thursday January 08, 2004 @02:28PM (#7917153)
    "The problem is a lack of highly educated workers willing to work for the minimum wage or lower in the U.S."

    Nor are highly educated workers willing to work for the (local) minimum wage or lower in places other than the U.S. It's just that the U.S. minimum wage provides a pretty good living in some parts of the world.

    You know, painful as it is to those who pay the price, one can make the argument that this trend will, in the long run, help to minimize the economic disparities between the "developed" countries and the "third world." And that can't be bad for international security.

  • Ok (Score:4, Insightful)

    by cubicledrone (681598) on Thursday January 08, 2004 @02:28PM (#7917160)
    There are ten million unemployed right now. The average job (in my experience) lasts less than two years. People are unsatisfied with their jobs in massive numbers. Wages are stagnant if not falling rapidly.

    I know zero people who are gainfully employed in a full time job paying a living wage. Zero.

    Management absolutely forbids telecommuting, unless the employee works for another company.

    Hiring is a subjective popularity contest with no accountability. Qualified people are passed over reguarly and often as a matter of policy.

    Education is meaningless. Absolutely meaningless.

    Once hired, most people find their jobs are gray, dispassionate drudgery where they are not allowed to open their mouths to say anything or to offer even a single new idea. This after being required to have decades of senior level experience and years upon years of advanced education (where, one assumes, they were also expected to keep their mouths shut).

    Why not just sell it all, Mr. and Mrs. CEO? Just ship the whole fucking thing FedEx to elsewhere Inc.? It's not like you'll notice the total collapse of the economy from inside your Navigator or your half-million dollar townhouse. Just fuck over all your neighbors and cash those options. Everything will be just fine in time for the next backyard block party.

    24/7 advertising. No job. No career. No credit. Basket full of crap at 28% interest. Get back on that fucking couch and keep your fucking mouth shut, consumer. This is the "corporate dream."

  • walmart, anyone? (Score:5, Interesting)

    by Heisenbug (122836) on Thursday January 08, 2004 @02:32PM (#7917249)
    The quote about what workers in the US cost reminds me of this article from Fast Company:

    http://fastcompany.com/magazine/77/walmart.html

    The article makes a believable case that WalMart is singlehandedly, drastically, speeding up the move of manufacturing jobs overseas. Towards the end, they have this quote:

    'Ever-cheaper prices have consequences. Says Steve Dobbins, president of thread maker Carolina Mills: "We want clean air, clear water, good living conditions, the best health care in the world--yet we aren't willing to pay for anything manufactured under those restrictions."'

    That's exactly what's going on here. 'Middle class' in the US costs a hell of a lot more than 'middle class' elsewhere, and if consumers here have a choice, they will buy the things that were not made under those expensive conditions. Of course, by making that choice, we push our own jobs overseas ...

    I can't predict how this will end up, but it's going to be a trip finding out. What do you all think? I want to see I Am An Economist in the replies. :)
    • by anomaly (15035) <tom.cooper3@g[ ]l.com ['mai' in gap]> on Thursday January 08, 2004 @02:59PM (#7917816)
      My dad was (for a time) a home improvement salesperson in the coalfields of rural WV. He said "I knew when I saw the driveways filled with Toyotas and Mazdas instead of more expensive Fords and Chevys that the WV coalminers were doomed to be out of work."

      His point was that they were taking wages earned in the American economy and pumping the profits to another country where labor costs were lower.

      Today American workers expect high pay (certainly even minimum wage is VERY high pay from a worldwide perspective) and great benefits, but we all want CD players made in China. We can't have it both ways.

      If we want to keep our standard of living, we need to choose to pay more for American-made goods. I make a practice of looking for American made goods when I buy, but I know that I'm totally in the minority when I do so. I'll pay more to help sustain my standard of living. I'm hoping that someday soon others will figure that out and start doing the same.

      I'm not really expecting that.

      The good thing is that overseas manufacturing can be difficult because of lack of infrastructure, and overall productivity is pretty low, making our products more competetive in spite of different labor costs. This is changing and it will be interesting to see the landscape in 20 years....
  • Costs (Score:5, Insightful)

    by Mr_Silver (213637) on Thursday January 08, 2004 @02:33PM (#7917270)
    The problem is a lack of highly educated workers willing to work for the minimum wage or lower in the U.S

    Even if they all suddenly would work for half the salary overnight, HP would have to reduce the price of their products too in order to ensure that people can afford to purchase them.

    In other words, their percentage profit on an item would stay the same. The fact that educated workers can demand a higher salary in the US means that corporations can get away with providing more expensive goods. In many other countries, you'd never be able to sell something at US prices.

  • by OYAHHH (322809) on Thursday January 08, 2004 @02:34PM (#7917300) Homepage
    I,

    Love this one:

    -----
    Barrett complained about federal agriculture subsidies he said were worth tens of billions of dollars while government investment in physical sciences was a relatively low $5 billion. "I can't understand why we continue to pour resources into the industries of the 19th century," Barrett said.
    -----

    I suppose Mr. Barrett would have us eating all those food surpluses that India and China are producing now-a-days.

    He might get a rude awakening though if the US were suddenly dependent on India, etc. for food and they said, we're not shipping you any more food because we don't like your stand on XYZ issue.

    If there is one thing that I'll certainly support is help for farmers. Hey, they put food on my table.

    The last thing I'll be supporting in the future is govt. investment in high tech. Why should the US support high-tech when high-tech eggheads like Craig Barrett will just take those advances and give them to the Chinese.

    I can do without a computer for a long time. I'd probably starve to death in about a month.

    Talking about losing points with me, it's not even close....

  • by rbird76 (688731) on Thursday January 08, 2004 @02:36PM (#7917348)
    My loans would cost me my entire take-home pay at minimum wage in the US. Why the hell would anyone want to learn a field, spend thousands of dollars to do so, and then no be able to make enough to pay the costs of the education? Meanwhile, Carly, et al get paid millions of dollars to risk other people's money while they have the opportunity/skill to drive their companies into the ground. (Good CEO's are worth the money, but lots aren't and they get paid anyway.) Do they think that we should be willing to work for nothing but that they should not? The rules of economics work for everyone, yet the people who run these businesses think that people should be willing to make sacrifices for their extravagant incomes (extravagant because of the amount of money/unit of competence). Why do I want DRM when it costs more and gives control of my computer to others while giving me no benefits in terms of costs or features? Why do I want to work in a field when I can make more money by not learning anything and being a garbageman^H^H^H^H^H^H^H^H^Hsanitation engineer? The same motives apply to everyone, yet some of the people who run companies seem to think that only they have the right (and desire) to behave in their self-interest.

    The initial comments are correct - we don't have inherent rights to jobs - if someone can do it better and cheaper than us, they will get the job and we'll have to do something else. I simply have a problem with the PHB logic that the stated CEOs seem to labor under - that others should sacrifice their well-being for their benefit while they have no duty to do the same. I'm certain that if their logic were applied to their jobs (I'm pretty sure someone as competent as these CEO's could be hired from overseas at 10% of their pay), they would not be so quick to advocate sacrifice for the benefit of others.
  • my my my ... (Score:5, Insightful)

    by SuperDuG (134989) <beNO@SPAMeclec.tk> on Thursday January 08, 2004 @02:36PM (#7917352) Homepage Journal
    QUOTE:"The problem is a lack of highly educated workers willing to work for the minimum wage or lower in the U.S. Costs are driving outsourcing, not the quality of American schools.'"

    Costs are driving outsourcing? How about wanting to make sure that ALL the money stays on the top? This is what completely amazes me in the world we live in, Joe Millionaire really believes that paying family providers a salary 1/100000th of his own is a COST.

    Now don't get me wrong here, I'm not some hippie banging my Commie Drum here, but I wouldn't mind some honesty. When saying why you're outsourcing, simply tell what you are doing ...

    1.) You are not outsourcing, you are laying off americans in a hope that every other company won't follow your lead (you still need people in america to buy your stuff right?)

    2.) You are personally making the statement that you believe that it means more to have 3 yachts instead of 2, and the best way to get there is cheap labor.

    3.) You believe that you are above 'regular' people in America, and would love to just keep screwing us all.

    Well what's the problem with all of this? Think back into the history books for me a little bit here. At what point in America's history did we see an ever pressing economic turmoil because of extremely low cost labor? Was it, ohhh yes the bloodiest battle costing more American lives than any other war in our history?

    Lets face it the Civil war was fought not to free the slaves, but in fact because the South was so rich because it legally could force people to work with no pay. This pissed off everyone else who HAD to pay their workers. Believe it or not some of the anger in the "Free North" was because they themselves weren't allowed to have slaves.

    Getting a little bit off topic here, the point being is that this country was built on the backs of "Joe Average", who is in the lower to middle class. There's just one big problem with everything here, there are whole lot more "Joe Averages" than there are "Joe Millionaires" and you can only piss "Joe Average" off for so long before he and his buddies organize together.

    So Mr Corperate Joe Millionaire, I implore you to please consider your actions and possibly not bite the true hand that feeds you, over and over and over and over again. "Joe Average" is collecting welare/unemployment because you believe he is not worthy. Lastly you can fight the government all you want, but remember there are more "Joe Averages" and if you keep pissing "Joe Average" o you may actually see democracy in action in which you as an American company will be spanked, because "Joe Average" also can vote.

  • by digitalsushi (137809) * <slashdot@digitalsushi.com> on Thursday January 08, 2004 @02:41PM (#7917442) Journal
    sometimes i like to think about how companies and ceos and money are kind of like back in the day, when you had a king, and a few lords, and a bunch of serfs or what have you. kingdoms are like companies. ceos are the kings, and then you have like the c[f,t,i]o who are like princes, or earls, or dukes or whatever, I never played D&D so i'm trying to remember history class. And then you have your serfs, the little dudes at the bottom doing all the work. i guess those are like employees.

    so then you have all the serfs all together, and they all have to buy junk like... food and deers and arrows. so, they are the source of all the money dumplings, like gold nuggets, which are like a C-note. And then the CEO-kings go "ha ha ha thanks for the money dumpling, laddy".

    K, but, what if those kings sent money dumplings to The Oriental Land of Panda-la. They pay King Chow for his serfs to make wicker baskets and... wheels, and other high tech. And then send it back with Magellan. And, the CEO-King fired all his serfs by telling some dragon to go eat em, and they're not in the picture. Cept, they are, and now they're eating tree bark cause they arent making wheels for his majesty.

    So the wheels and baskets are coming back from panda-la and the CEO-King is like "dude.. this is sweeteth" and he has more gold dumplings than ever before, cause he doesnt have to pay his localites, and.. ugh, see, this is where my example falls apart, as it lacks both a cunning mix of logic, and sense. Actually, it might just be that it's veilded under a shroud of retardedness, but that's left to you, dear reader.

    Maybe someone should correct my giant metaphor so that I can understand it for me...
  • by mpath (555000) on Thursday January 08, 2004 @02:44PM (#7917516)
    This was posted on /. [slashdot.org] before and there's a great analogy that we should all read & understand:

    Recently, I bought some chocolates as a gift for some friends from a specialty shop. These chocolates are remarkable. Owner Jean-Marc Gorce makes them by-hand and his small shop has been rated as one of the top ten in the United States. In addition to being a chef, Jean-Marc is also an entrepreneur and an innovator.

    Jean-Marc recently started selling his chocolates in gold and blue boxes. I told him I liked the new boxes. He explained that his wife designed the boxes and he found a company in the Philippines that could produce the boxes in the small volume they needed for a good price.

    Jean-Marc's gold and blue boxes are an example of successful outsourcing. Jean-Marc sells chocolates, not boxes. The design and production of chocolates is his core competency. Jean-Marc can outsource box production to improve his operational efficiency without sacrificing his reputation as a maker of superlative chocolates.

    While outsourcing boxes improves chocolatier Jean-Marc's operational effectiveness, he would never consider outsourcing chocolate production because he would lose his core differentiation advantage. Yet, in their enthusiasm for cost savings, several US technology companies have done precisely that-- outsourcing their core technology and key strategic differentiator.

    Offshoring Programmers [forio.com]
  • by Xthlc (20317) on Thursday January 08, 2004 @02:56PM (#7917757)
    Seems like ever time this issue comes up on Slashdot, people reply one of three ways.

    1) "Screw you, you lazy bastards. It's Capitalism, compete or shut up. Just like I'm going to do as soon as I graduate from college with my CS degree. I can't wait!"

    2) "Let's outsource the CEOs! nyuk nyuk" [about five or six times per thread, always ranked 5:Funny]

    3) "Dammit, if they want to work for US tech companies, let 'em come here!"

    None of these responses is an effective means of addressing the problem. The Western system of democratic capitalism has worked so far specifically because it harnesses capitalism to acheive wealth and social stability. Notice that I said "harness". Capitalism is a great tool, but left to its own devices it destroys the middle class.

    Banning job exportation completely is stupid. The US will quickly lose its competitive edge in IT. Already we're seeing Indian companies churning out quality, high-margin software (such as Flexcube) that's making significant inroads into US markets. When the Chinese start getting warmed up, watch out.

    Allowing the exporters free rein is also stupid. It will destroy the US IT industry, put millions out of work, and we'll lose critical mindshare (as all the bright kids who would've become engineers wind up as lawyers). And people with families and other responsibilities DON'T HAVE the resources or time to retrain, you knuckleheaded Objectivist brats. They'll drop out of the middle class and screw the rest of the economy, destroying jobs they might have otherwise tried to retrain for.

    Really, what we need are measures to soften the blow of global capitalism. That's what governments are there for. We need controls (but not a ban) on job exports, perhaps a tax-credits-per-domestic-employee plan. We need federal retraining incentive program, giving out vouchers to unemployed people who can redeem them for tuition to get new job skills. And we can take a big chunk of the cash to do these things out of agribusiness subsidies. Fuck Monsanto, the US stopped being an agricultural economy about a hundred years ago. Let's keep our leadership role role where it really matters: in science and technology.
  • by dominion (3153) on Thursday January 08, 2004 @02:56PM (#7917762) Homepage
    Why hasn't anybody mentioned unions as an answer to all this? Seems we could really use them right now.

    We could use them here, and they could use them in India. Unions with some kind of international perspective (instead of the nationalism of the AFL-CIO and others) are the only kinds of unions that can be effective in a globalized economy.

    This is why we have to be concerned about the economic conditions of the third world, and need to support their right to organize. Our decent jobs are going to be much less likely to cross overseas and become sweatshop jobs if we give support to people in the third world who are trying to form unions.
  • by johnlcallaway (165670) on Thursday January 08, 2004 @02:57PM (#7917771)
    You all ran your salaries up way to far, lived outside your means, and suddenly, but bubble burst.

    Look at history, the unions did the same thing. They started raising their salaries to a 'livable wage', then when companies went elsewhere to get the labor cheaper, they all started to whine to.

    I knew far too many programmers that wanted to command +60K salaries that weren't worth crap. But because companies needed them, and didn't have a cheaper source, they had to pay it. Now, they have an alternative and are using it. Well boo hoo, don't cry in your lite beer too much.

    It may surprise you, but Bill Gates and all the other CEOs didn't go into business to give you jobs. They went into business to make money. Get over yourselves, and if you want to be rich, do the same thing. Otherwise, settle for what other people are willing to pay, not what you think you are worth.
  • by sbma44 (694130) on Thursday January 08, 2004 @02:58PM (#7917789)
    well, that, and cheaper plastic crap at Wal*Mart.

    I realize protectionism is not a viable long-term strategy. I don't want to steal the potential for economic development from nations transitioning to an advanced economy.

    But here's the problem: we are growing production capacity without growing the markets to support them. Everyone would be getting rich and improving their quality of life in this equation if there was a demand from within India for IT work. There isn't one to speak of.

    Without such markets to support the expanded production capacity, the benefits of globalization are realized only for corporations -- and they are short-lived. The net money going to workers drops as companies utilize cheaper labor. By shipping capital out of the country to foreign workers who will not inject it back into the corporations' native economy, that economy will suffer, people won't be able to afford services and the corporations will collapse.

    The corporations are not really to blame. This is irresistable poison fruit. If they don't take it, they will starve long before their competitors die from the toxicity of the practice.

    Protectionist measures are not a permanent solution, but they MUST be put back into place to slow the bleeding. They can slowly be relaxed as foreign markets expand and produce consumers to support their industries.

    The hard truth is that there is no shortcut to developing a nation's economy. To do it right takes a slow process. Otherwise all you get is short term corporate enrichment, the establishment of unsustainable foreign labor markets, and the destruction of local economies and cultures.

  • Broken record... (Score:5, Insightful)

    by leviramsey (248057) * on Thursday January 08, 2004 @02:59PM (#7917821) Journal

    [Remember records... they were vinyl (in earlier days, wax) discs approximately 2 to 2.5 times the diameter of CDs or DVDs in which data was stored as a physical groove on the edge of a track spiraling towards the center.]

    • Slashdot posts story whining about offshoring
    • I post the following:

    Offshoring is a good thing. The "lost jobs" in IT are creating a pool of capital (in the form of labor) that will allow the next great step forward to be taken.

    Industrialization could only occur on the scale it did if, thanks to increased efficiency in agriculture, millions of family farms went under, sending their labor capital to the cities to work in the factories.

    The "information industries" (IT, law, medicine, finance, media, etc.) could only occur on the scale they have over the past 50 years if industrial employment declined (largely because of greater mechanization and also because of offshoring of production). The evidence can be seen by looking at Europe, where those nations that vigorously tried to protect their existing industrial wage bases (through guaranteed employment laws, massive subsidies, etc.) found themselves years behind the US in terms of the state of the "information industries".

    Much like the slashdotters complaining about offshoring, the RIAA and MPAA complain about technological changes that, quite frankly, doom their current models, if not their existence themselves. And much like the RIAA/MPAA, these slashdotters are calling for the government to come in and preserve their business models that have brought them prosperity.

    Yet these slashdotters, in general, decry the RIAA and MPAA, while failing to realize that they are doing exactly the same thing for exactly the same reasons.

    As far as I can tell, this indicates that these slashdotters are either:

    • idiots, for not realizing the fact of their kinship with the *AA.
    • hypocrites, for realizing this and continuing in their ways.
    • egotists, for somehow thinking that their suffering from outsourcing outweighs the suffering of the *AA from technological advances.

    What'll it be.

    P.S.

    • I get modded down for this... oh well, I've got excellent karma and can take whatever you dish out.
  • by mojotooth (53330) <mojotooth@gmai[ ]om ['l.c' in gap]> on Thursday January 08, 2004 @03:03PM (#7917882) Journal

    Barrett complained about federal agriculture subsidies he said were worth tens of billions of dollars while government investment in physical sciences was a relatively low $5 billion. "I can't understand why we continue to pour resources into the industries of the 19th century," Barrett said.

    Yeah, that whole eating thing is sooo 19th century.

  • Global Fascism (Score:4, Insightful)

    by Red Rocket (473003) on Thursday January 08, 2004 @03:09PM (#7918015)

    This is part of the global fascism movement that is turning the whole world into a corporate slave state. The liberal/progressive way to approach the problem of world poverty and wealth creation is to lift up weaker states with workers' rights and environmental protections so that we can all grow on an equal playing field.

    The fascist approach is to destroy or prevent any kind of human rights or environmental protections from being applied in poverty-stricken areas and then use those areas and their nearly slave labor to force down rights, wages, and protections in the US and other free nations so that we go on a race to the bottom.

    Don't believe me? Look at the example we just set in Central America:
    1. Kill a million peasants who try to establish justice [freespeech.org]
    2. Sign free trade agreement [lasolidarity.org]
    3. PROFIT! Big time - by sending your jobs south.
    Keep fighting for corporate power and watch yourself and fellow citizens become slaves. Your stock market gains won't protect you. Corporate profits are through the roof right now. Is your life any better for it?
  • by Simon (815) <.simon. .at. .simonzone.com.> on Thursday January 08, 2004 @03:51PM (#7918907) Homepage
    "Countries that resort to protectionism end up hampering innovation and crippling their industries, which leads to lower economic growth and ultimately higher unemployment," said the Washington-based Computer Systems Policy Project,

    OK, so let me get this straight. To guard against "ultimately higher unemployment" we should be firing the local employees and moving the jobs overseas... :-/

    I don't still get it. Well anyway, I'm sure that all the people who just lost thier jobs will sleep much better now that knowing that by being unemployed they are doing thier part to combat unemployment.

    --
    Simon

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