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Businesses The Almighty Buck

Labor Department Downplays Offshoring 849

twitter writes "The New York Times is reporting the US Labor Department's first assessment of International Offshoring. The report claims that less than 3% of Q1 2004 jobs were lost to offshoring. Companies were asked if workers had been replaced and taken at their word. A Federal Reserve governor is also quoted as dissmissive. Estimates by Goldman Sachs are 20 times higher. Despite Washington's IP fetish, no one quoted is worried about the export of US research and knowhow. Your job and 830,000 others are gone."
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Labor Department Downplays Offshoring

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  • BPO jobs: (Score:5, Informative)

    by anandpur ( 303114 ) on Friday June 11, 2004 @09:41AM (#9397000)
    It is not downplayed in India. BPO jobs: Devil in sheep's clothing? [indiatimes.com] Call centres put Indian mores on the hook [indiatimes.com]
  • by eightball01 ( 646950 ) on Friday June 11, 2004 @09:44AM (#9397024)
    Heinz has about 60% of their business done outside of the US. [heinz.com] Why would all their business be done in the US again? Teresa Heinz doesn't have much more than a 4% control of the company. Still a substantial amount for a company that size, but not enough to reflect in decision-making.
  • by Enry ( 630 ) <enry@@@wayga...net> on Friday June 11, 2004 @09:44AM (#9397031) Journal
    If Teresa Heinz Kerry were actually an officer [reuters.com] of HJ Heinz, she might hold some influence. She isn't, so she doesn't.
  • Or an University... (Score:3, Informative)

    by Cyclopedian ( 163375 ) on Friday June 11, 2004 @09:46AM (#9397051) Journal
    depending on how much they need the computer-minded people. However, they're very flexible in hiring young people and are willing to give them a chance to establish a work history that they can use in the future.

    -Cyc
  • by molarmass192 ( 608071 ) on Friday June 11, 2004 @09:51AM (#9397097) Homepage Journal
    Ummm, she inherited that money and the Heinz name from her former husband, the late Senator John Heinz, a Republican [heinz.org]. Also, she owns less than 4% of Heinz Co. stock and isn't even on the board. You can bet that her ex-hubbies Republican pals are on there though. Anyhow, I don't have anything against Republicans historically and was once one myself, it's the "new" far-right wing Republicanism that turned me off the party.
  • by Anonymous Coward on Friday June 11, 2004 @09:52AM (#9397100)
    Robotics and industrial automation should be taxed too!!

    Think about this ..why should companies be allowed to improve efficiency and use robots or software??

    Who the fuck are people to tell others how to do THEIR business? If they want to offshore, that's their CHOICE. It's the same as using industrial automation (which people opposed in the 19th century). Why not ban that? After all, it's somehow a God given right to force a company to hire people.

    Also, don't workers that are willing to work for less deserve these jobs?

    I dont see how forcibly preventing companies from hiring offshore workers can be ethically or morally justified.
  • by sirdude ( 578412 ) on Friday June 11, 2004 @10:02AM (#9397185)
    can be found on the Economic Times site: Link 1 [indiatimes.com], Link 2 [indiatimes.com], and Link 3 [indiatimes.com]. Follow the "Related Links" trail to reach ..

    A slightly related (and interesting) article on the social ramifications of the BPO (Biz jargon for Business process outsourcing) can be read here [indiatimes.com].

  • by DRue ( 152413 ) <drue@@@therub...org> on Friday June 11, 2004 @10:13AM (#9397277) Homepage
    Correction - the article actually says 2.5%, not 3%. It's as if the poster wishes that more jobs were outsourced so that he can be more pissed off at Bush. Sad, really.
  • by Epistax ( 544591 ) <epistax@g[ ]l.com ['mai' in gap]> on Friday June 11, 2004 @10:16AM (#9397300) Journal
    State governments actually HAVE been outsourcing .

    googl'd: http://msnbc.msn.com/id/4450796/

    Perhaps federal's safer?
  • by bean_tmt ( 697790 ) on Friday June 11, 2004 @10:17AM (#9397321)
    exactly right. sometime's it's not just a nerd slant that i read on slashdot. most people here need to take a entry level economy book and learn a little about the global economy.
  • Re:Huh? (Score:5, Informative)

    by Otter ( 3800 ) on Friday June 11, 2004 @10:19AM (#9397336) Journal
    To clarify, the question is what percentage of lost jobs were lost to offshoring. (Not correcting anything you said, just the part you quoted!) But, nonetheless, I agree that the 60% figure is ludicrous.

    Meanwhile, I'm comfortably ensconced in a US job offshored from Switzerland so I can't complain...

  • Re:Question (Score:3, Informative)

    by nelsonal ( 549144 ) on Friday June 11, 2004 @10:21AM (#9397355) Journal
    From CNBC yesterday in a story about this, the labor suveys ignore employeers with fewer than 50 employees, and also do not count layoffs of less than 50 people.
  • by gcaseye6677 ( 694805 ) on Friday June 11, 2004 @10:25AM (#9397396)
    The problem is that there is no way to make sure that companies that oursource actually pass those savings on to customers in the form of cheaper goods, or instead just give their ceos larger bonuses.

    Sure there is. Its called competition. When a company finds a way to reduce costs, their first urge probably isn't to lower prices. But when a competitor who wants some of their market share sees that they can make money while selling the same thing cheaper, that's what they will do. The first company will then lower prices or watch the new competitor eat their lunch. That's the beauty of capitalism.
  • by swb ( 14022 ) on Friday June 11, 2004 @10:46AM (#9397632)
    At least at the state level. Wasn't it Indiana that had offshored a computer system/call center associated with the unemployed?

    Also, state governments often LIKE to outsource stuff to the private sector. The bureaucracy associated with a state run project is huge -- everything from labor rules to material acquisition, and with more states needing to do more work with less tax revenue, these projects often get pushed into the private sector.

    Once in the hands of the private sector, there's often multiple layers of subcontracting that can involve offshoring. Somtimes it just seems like a giant shell game -- local business (with figurehead female minority ownership for easy contract grabs), pitches for state contract and then just subcontracts all the work out, skimming profits off the top and not really doing any work.

    In fact, it wouldn't surprise me if some consultancies have won business by equating offshoring with minority hiring, which should REALLY piss off the people the minority hiring laws were supposed to help.
  • by Anonymous Coward on Friday June 11, 2004 @11:40AM (#9398266)
    CEO's are doing what is in their immediate self-intrest, cutting short term cost, pumping up share price and cashing out. Quality doesn't enter the equation.

  • by Anonymous Coward on Friday June 11, 2004 @11:43AM (#9398320)
    Coming from the man that has HIV does not cause AIDS - Manto & Thabo in his signature I don't see how the fuck you can get modded up for anything you say.

    I'm pretty sure his sig is not there to claim that HIV doesn't cause AIDS.

    Surely it's there to criticize President Thabo Mbeki and Health Minister Manto Tshabalala-Msimang of South Africa for hiding their heads in the sand and claiming that AIDS is not caused by HIV, while their countrymen are dying around them. (AIDS causes about 40% of deaths in S. Africa!)
  • by $criptah ( 467422 ) on Friday June 11, 2004 @11:44AM (#9398322) Homepage

    I am a recent graduate who found himself in a toilet when it came to getting a job. I have been working in the industry since my freshman year in college. By the time I graduated I had experiences with almost everything: from kernel development, to Java to PHP and system administration. Yet it took me forever to find a job. Now that I am gainfully employed I constantly wach out and see how I remain employed in the coastal United States. Here are my survival tips.

    Look for a job where you can get into business-to-business relationships. When you deal with large companies, your job has a higher chance of staying in the States because companies like quality service. Dell was forced to bring its business customer support because managers did not enjoy talking to people who could not assit them in a reasonable manner. Moreover, once you get into B2B, you get to meet a lot of people; if you leave a good impression, some of them could help you out in the future.

    If you are stuck with a job that involves receiving specifications over e-mail and then sending the code somewhere else, RUN. Unless you code something that is used for military of the government (meaning you have at least one level of clearance), you job is done. You must get out and do more things. I do not know what things you should do, but you must do something besides being a code monkey.

    Learn how to do business; learn how to benefit your current employer or start your own shop. People do not create companies in order to employ more people. Businesses are here to make money. If you show your employers that you can benefit the company, they are likely to keep you closer.

    Learn languages, cultures, and traditions. Improve your communication skills and presentability. Being flexible in the global economy is very important. I got my first job only becuase I was the only applicant who spoke fluent foreign language. I could talk and relate to our development team, something that other candidates could not offer. Based on my previous experience, I am going for one more foreign language, my fourth. Staying neatly groomed and socializing with your co-workers helps as well. I would not want to employ a person who is not welcome by the rest of my crew.

    I followed these rules and, fortunately, I was able to find different jobs even during the recession. Also, remember whatever does not kill you, makes you stronger. Learn from other peoples' mistakes and do not forget to do so from yours.

  • by n3bulous ( 72591 ) on Friday June 11, 2004 @11:50AM (#9398389)
    The entire steel industry hasn't moved overseas. The US still produces about 100 million tons of steel every year, approximately 12% of the world total, and relatively close to the alltime high (135 million in 1953?). China, a much larger country with less regulation (think safety and health), only produces about 200 million tons a year.

    The loss of jobs is due to improved efficiency, unions pricing themselves out of the market, and low demand. It's quite difficult to compete with nations having cheaper workforces, but that's how capitalism is supposed to work. In the second reference below, it is stated the world uses 100 million tons less than it produces. Low demand means lower prices meaning fewer jobs.

    http://www.freetrade.org/pubs/speeches/ct-dg0225 99 .html
    http://www.useu.be/Categories/Trade/Dec0701 SteelTa riffsQuotas.html
  • by Schnapple ( 262314 ) <tomkiddNO@SPAMgmail.com> on Friday June 11, 2004 @11:57AM (#9398482) Homepage
    Kerry will stop this offshoring nonsense! oh wait, his wife's companies are offshoring as much as anyone else.
    Kerry's wife owns a minority share in Heinz, as a result of being the widow of a founding member of Heinz. Heinz does not "outsource" per se - they have manufacuring facilities in other countries to produce products to be sold in those countries. Since Ketchup and other products don't stay fresh indefinitely and shipping costs from one central location are prohibitive, this isn't the outsourcing at issue.

    More info here [snopes.com]

  • by zogger ( 617870 ) on Friday June 11, 2004 @12:25PM (#9398788) Homepage Journal
    ... of the R party is what we used to call the eastern establishment rockefeller liberal wing of the party, back in the 60's and 70's. There was a huge power struggle then, and the traditionalists, who included a lot of the classical non interventionists and business ethics-matter types, lost, bigtime. That eastern establishment wing (your basic military - industrial complex-banking establishment sorts, now roughly classed as the globalists) took over in the 64 election, then re-concentrated their power when they forced bush 1 onto the ticket with reagan. The current occupiers in DC have little, I mean VERY little, in common with the traditionalists, although I will admit they have a lot of misguided fundies sucked into supporting them, based on "endtimes" prophecy and being israel-firsters, but that's actually a low number and they don't have as much influence as they think they do, but the R party will keep their votes anyway, just "because" they can.

    At the top, the strings are pulled (speaking of both the D and R party now) by a few large banks and conglomerates, same as it always has been, and the various subgroupings/constituenceies are still being preached to in the exact words they want to hear, to keep up this generational-long congame.

    Same old- same old stuff, just this eras version of "ohhh-new shiny so it MUST be improved.." tacked on top.

    I'm personally so disgusted with the R party I don't even call myself conservative any more, they even ruined that word, turned it into something bad and noxious, when it used to just stand for honest, decency, small and efficient government, and more basic freedoms. Now I don't know what the heck it stands for other than it's "patriotic" to become a looter nation, and that lying is a commendable lifestyle choice.

    As to the word "liberal", that was abused even further, what passes for a defintion now as liberal has nothing to do with a classical liberal from the olden daza. It certainly never meant just wholesale wealth transference to pick up votes, like it means now.

    I consider myself now just a traditional Constitutionalist,an independent, with a strict interpretation based on the english words and defintions that were used at the time of the writing of the Constitution. For a very common example, the state of Vermont has the only true implementation of the second amendment, IMO. The federal government sure doesn't, that's for sure.

    I would say there's handful left of high ranking pols in both parties who are actual patriots and constitutionalists, but they are a severe minority. Most of the rest are all various flavors of garden variety crooks, IMO.

    The good news is, we have developed a huge number of people who have gotten over voting for criminal gang A or B,or have stopped voting entirely, which means there exists a base of *potential* voters and activists who could conceivably take back government from the gangs who run it-some time anyway. It would take quite the grassroots effort to be sure. And there's also a growing number of what are called disaffected voters who used to classify themselves as R or D but are now neutral and looking harder at reality. This is good, and the net sure helps to break the programming and brainwashing that has gone on for years.
  • by Mr. Firewall ( 578517 ) on Friday June 11, 2004 @12:46PM (#9399074) Homepage

    Bu$h administration officials were quoted in the Washington Post as stating they thought out sourcing was good for the economy

    I know the current President gives us ample reasons to criticize him, but give him credit when he happens to get something right.

    In this case, he happens to be right.

    The current issue of Reason magazine [reason.com] arrived in my mailbox yesterday with a cover story titled "10 Truths About Trade: Hard facts about offshoring, imports, and jobs" that unimpeachably presents the facts: Offshoring is not a threat to high-tech employment; challenging, high-paying jobs are becoming more plentiful, not less; offshoring creates new jobs and boosts economic growth; and the popular myth that the US economy is running out of jobs has been with us a very long time -- and has always been untrue. It won't be on line for another month, so you'll have to get it from a news stand if you want to read it.

    I'm out of work too, and it's not due to offshoring (I'm a network administrator); it's due to conditions caused by brainless politicians who don't understand economics.

    Bush (43) is not responsible for the recent recession from which we're now in recovery; that recession started during Clinton's term, just as the recovery eight years earlier started during Bush (41)'s term. I, too, would like to see Bush (43) out of office; unfortunately, the alternative offered to us by the Democrats will be an order of magnitude worse if he wins.

  • Well... (Score:3, Informative)

    by gfxguy ( 98788 ) on Friday June 11, 2004 @01:09PM (#9399439)
    I don't really disagree with most of what you've said, but I do know that in France the employment problem is a LOT worse than it is in the U.S., and their GDP has gone down lately, not up. Unemployment in France: 9.6% (2003).

    In Germany: "GERMANY has been the sick man of Europe for some time, with high unemployment and a stagnating economy. The diagnosis of German economists is unanimous: the labour market is unable to balance supply and demand because of high social welfare benefits and excessive trade union power." Link [mondediplo.com]

    Well, the article tries to dispell that "myth", but regardless of the reasons, unemployment in Germany is nearly twice that of the USA (10.3% vs. 5.6%).

    Denmark does pretty well (2002) at 5.1%, which is generally considered optimal. Link [nationmaster.com].

    And Canada? [statcan.ca], 7.2%

    So let's rank:
    1. Denmark: 5.1% (optimal)
    2. USA: 5.6% (near optimal, same as our "peak" in the 90s).
    3. Canada: 7.2% and improving, probably partially thanks to the improving U.S. economy. People would want to see heads rolling at this rate in the U.S., though.
    4. France: a miserable 9.6%. Apparently that 35 hour work week was a wonderful idea.
    5. Germany: 10.6%.

  • by Anonymous Coward on Friday June 11, 2004 @01:50PM (#9400007)
    Its not offshoring that bothers me. What bothers me is the greed this outsourcing is generating. I've been in the software industry for over 10 years. Being a naturalized US citizen, I wanted to find out my marketability in the outsourcing markets, so I managed to get an interview with a company in my birth country, that also has offices in the US. They were all happy and wanted to hire me immediately; the problem is that what they want to pay me is around $1200 a month. This is a very descent salaray if you live and work there, and I would not have been complaining about this if they were doing local contracts at local rates. My problem with them is the fact that all the top dogs are US citizens, and they bid for US contracts at US prices, but wants to pay me foriegn wages. I doubt any of these top dogs are paid offshored salaries and options. The work I would be doing is the same, just at a different location. I would not have objected if it was a reasonable drop in salary, but at about 1/7th of my current salary, I thought it was very unreasonable. If they were at least willing to pay me what I can save with my current job, I would have said that was reasonable, but its very unreasonable for the off shoring companies to expect me to do US work for offshored salaries.

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