Labor Department Downplays Offshoring

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."

cant wait to get bush out of office

[Anonymous Coward]

Kerry will stop this offshoring nonsense!

oh wait, his wife's companies are offshoring as much as anyone else.

ummm...

NADER '04 !!!1!

Re:cant wait to get bush out of office

[hackmole]

Crap. This is all crap. Does anyone know how many jobs we have "insourced"? Think 6 million. The economy is always churning. People lose and gain jobs everyday. Yeah, lets tax the hell out of companies that outsource, then we can lose 6 times the number of jobs. Seesh, you need to read beyond the headline

SO MUCH FOR STATISTICS

[lcsjk]

Read the article and ask yourself exactly what questions are being asked and answered. Then follow this scenario.

If I buy components from China or India instead of your company, and your company loses business and you get layed off, I have outsourced your job as part of the global economy. However since I am getting lower cost components and become more profitable, I can hire more people to assemble my product. Then as I realize that other local companies are eating into my business by selling at a very slightly lower price, I now start looking for offshore manufacturing and shift my workers to other jobs required by the additional volume. I become more competitive and profitable, but my local competition loses business and has a layoff. So far I have outsourced your job and the jobs of another local company. Both of these companies had layoffs that were not due to outsourcing.

So far I have outsourced your job and the your company's manufacturing by putting you out of business.

When the Bureau of Labor Statistics asks mine and the two other companies about outsourcing, two of them have lost jobs but not due to outsourcing. I have done outsourcing but have hired some people to help with the additional volume.

Net result of the survey? Few or no jobs have been outsourced, and the jobs that were outsourced did not result in a layoff. So much for government statistics!

Re:cant wait to get bush out of office

[king-manic]

For those wishing to enlighten themselves further with the truth, see the the Dallas FRB's site for a summary of the Churn, here is a direct link to the PDF of the original 1992 annual report which describes it in depth. The outsourcing boogeyman is BS, plain and simple, accept it.

"There lies, Damn dies, and statistics"

Reality: I've been looking for over a year for a programmign or stabel tech job and have only found my current low payign unstable position in a small business. Of my graduating class I a

Re:cant wait to get bush out of office

[king-manic]

That's a pretty selfish, shortsighted view. Baby boomers collectively have lots and lots of money; and they spend it. If that spending suddenly dried up, we'd have such a depression that you'd be crying for your mommy (who you probably just wished dead).

No actually, we'd inherit the money and we'd spend it. Like the Black plague in europe. It was a direct contributor to the renaissance.

Re:cant wait to get bush out of office

[Enry]

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.

Re:cant wait to get bush out of office

[geoffspear]

Yes, and we Pittsburghers are much more upset about losing ketchup producing jobs than about how the entire steel industry has moved overseas.

Re:cant wait to get bush out of office

[n3bulous]

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

Re:cant wait to get bush out of office

[molarmass192]

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.

Re:cant wait to get bush out of office

[Otter]

Kerry will stop this offshoring nonsense!

FYI, Kerry has already backed off from that position now that the primaries are behind him. Didn't you hear about the WSJ interview where he explained that his "Benedict Arnold" reference solely concerned tax havens and that he couldn't imagine where people had gotten the idea he was talking about offshoring? (His 30 or so speeches where "Benedict Arnold" directly referred to job transfers notwithstanding...)

Re:cant wait to get bush out of office

[Schnapple]

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]

Re:cant wait to get bush out of office

[DarkSarin]

Have you stopped to consider, for even a moment, that there is the distinct possibility that they might be correct.

I am amazed at all the idiocy (not in reference to you, mind), that is on this forum. It is smart business to save money. Most businesses perceive that outsourcing saves money. Saving money means that the business can either spend more on employees, invest in better equipment, new tech, etc, or just give the shareholders a nice return. If they give it to the shareholders, then those SH's will either spend it or reinvest it. Both of these outcomes will help the economy.

Dead money is very rare. Even sitting in a bank account, money is being used.

Now I realize it doesn't help you now when your job just got cut. Nothing but another job will do that. John Kerry will not alleviate that any more than Bush will. The president will NOT make much difference. Unless the entire congress, senate and white house are all in agreement, there will be no significant change in offshoring practices. This is true for Bush or Kerry, regardless of what you think.

Sorry, you just need to think through this stuff more carefully.

Re:cant wait to get bush out of office

[workindev]

Bu$h administration officials were quoted in the Washington Post as stating they thought out sourcing was good for the economy and they had no plans to stop it

Maybe that is because it is good for the economy and there is no reason to stop it. If you disagree, then you disagree with the 200+ years of US history where we have outsourced remedial jobs and our economy and job base grew because of it.

On the other hand, doing "something" about it would create a bigger problem because we would be forcing US co

Re:cant wait to get bush out of office

[Mr. Firewall]

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: Offshor

Re:cant wait to get bush out of office

[kin_korn_karn]

outsourcing is not just a zero sum game, it's a negative sum game. The USA loses more than the economy gains. Not only does the consumer lose his immediate source of income, but when he gets another, it's lower and he'll be more cautious with his spending.

No way

[Anonymous Coward]

Dey took arr jabs!

Go work for the government

[Mz6]

Here is a registration free link (for the NYTimes) [nytimes.com] courtesy of GOOGLE.

Here is some advice that I took after I graduated college. During my last few years of college there was a lot of talk that companies may start outsourcing their work to places such as India. Living in an area where there is a large air force base I was given the advice to get a job there working with either with a contractiong company or the civil service (government). They are so strung for computer-minded people that they can offer up to a $60,000 hiring bonus on top of about $60-70,000 per year just to get you to work for them. And the best part? The US government isn't going to outsource your job anywhere. The only thing to worry about, however, is that your job can be eliminated. But the benefit of working for the civil service? They also have to find you a new job of similar pay.

Or an University...

[Cyclopedian]

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

Re:Go work for the government

[Epistax]

State governments actually HAVE been outsourcing .

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

Perhaps federal's safer?

Outsourcing a huge government trick, too

[swb]

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.

Huh?

[Anonymous Coward]

The report claims that less than 3% of Q1 2004 jobs were lost to offshoring.... Estimates by Goldman Sachs are 20 times higher.

So 60%? I don't think so...

Re:Huh?

[Otter]

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...

Look, folks. Do it now, nicely, or be blindsided.

[Slartibartfast]

I feel for people who've lost jobs -- my wife lost hers, twice, and several of my friends did as well. But you know what? It keeps the labor market dynamic. "Well, if this is dynamic, I want none of it!" Sorry, but that's a kneejerk reaction: if people overseas can do it cheaper, and maybe even better, WE HAVE TO LET THEM. If we don't, then some day they'll come along and simply overpower us, because they -aren't- stagnant. Look at what happened (say) to American automakers when they were dismissive of Japan! How about textile workers? It's part of being in a global economy. Unless we wish to become entirely self-sufficient and isolationist, we HAVE to learn to do well what we do well: innovate, create jobs, create wealth and opportunity. But don't try to bail out a tepid economy with finger pointing and a leaky pot.

Re:Look, folks. Do it now, nicely, or be blindside

[SirGeek]

The problem is that in a level playing field, that is fine..

But you also need to take into account that these foreign workers :

1. Don't get Insurance
2. Don't have the same working environments
3. Don't have anywhere near the same cost of living

So how can you compete when they can feed a family of 10 on 10K a year and have housing while you would be in poverty here if you made that much ?

Re:Look, folks. Do it now, nicely, or be blindside

[Slartibartfast]

No. That's not how it works. It -is- a level playing field, almost by default: their cost of living is lower than ours, regardless of the reason. That means that there are certain things that they can do cheaper. WE HAVE TO LET THEM. Eventually, their economy will get better, raising their cost of living... or it won't, and they'll no longer be a concern. But if you try to "level" the playing field, you're just kidding yourself. If someone else can do it cheaper, and you don't let them, YOU WILL LOSE: that's the only sure bet. Check history if you don't believe me; gov't instituted remedies in situations like this just don't work, as most socialist countries were fine examples of. Free market may not be fun, but it's the only game that consistently wins, because there's nothing artificial, and greed -- the great human motivator -- is allowed to run rampant.

Re:Look, folks. Do it now, nicely, or be blindside

[clambake]

It -is- a level playing field

Not quite. Because of market collusion its possible to lower the quality of goods across the board and pay no price for it in the marketplace. THAT's why outsourcing to India works. If you are one of five widget makers, and you all subtly agree not to compete on quality, then it's easy to fire 90% of your customer service center, hire shoddy brute-force armies of programmers and end up paying far less than you would need to if your customers actually got a real choice of wi

Re:Look, folks. Do it now, nicely, or be blindside

[(trb001)]

Your argument makes it sound like "As long as we all band together and make cheap, crappy products, nobody can complain because they won't have any alternatives". Very few industries actually have NO alternatives, and quality products are always in demand.

It's like saying Ikea, Target and Walmart and going to run the woodmakers of America out of business because you can buy such cheap, albeity low quality, furniture from them. Quality furniture will always be in demand, but low quality furniture may in

Re:Look, folks. Do it now, nicely, or be blindside

[kmac06]

"If you are one of five widget makers, and you all subtly agree not to compete on quality, then it's easy to fire 90% of your customer service center, hire shoddy brute-force armies of programmers and end up paying far less than you would need to if your customers actually got a real choice of widget to buy."

What are you talking about? American companies are around for one reason, and one reason only: to make money. They hire GOOD programmers in India CHEAPLY. They save money. Simple as that. There is no 'conspiracy' for a group of companies to not compete over quality: as soon as this happens, a new player will come in not following these rules and take over the market. It's how free trade works.

Product and support quality

[Confused]

You got it nearly right, only the conspiracy theory is a little off. Why invent a conspiracy, when a few simple observations explain it also:

If the customers don't care about quality, saving there is a sensible measure. The goal isn't to produce the best, it's to produce just good enough. Anything above that is wasted. If customers wan't better quality, there's a business oppurtunity by making them pay for it.

The other assumption was, that the service from american is better than what poor starved indians provide. More often than not, the so called better service from americans was limited to read the brain-dead script with an american dialect instead of an indian one.

There is no such thing as a "Free Market"

[Anonymous Coward]

Free Markets are like black holes, no one has ever seen one, but theoretical academics will argue to the death about what they are like. Economics is a soft science based on assumptions about human behavior.

If US companies want to ousource, fine, just quit giving them taxpayer dollars (corporate welfare) and access to government R&D.

Re:Look, folks. Do it now, nicely, or be blindside

[RickHunter]

Only problem - this isn't a free market. I've got restrictions on what kinds of services I can offer that Joe Brain-Damaged in India doesn't have. I have no choice about whether to comply with these restrictions or not.

Ergo it is not, by default, a free market. Not until India enacts labour laws offering the same degree of protection to its workers as the US does.

You know what's really interesting? India's new government is already doing that. And despite the fact that it has only raised the cost of wor

Well...

[gfxguy]

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 u

Re:Look, folks. Do it now, nicely, or be blindside

[Jeff DeMaagd]

I pretty much agree.

The job loss numbers also don't seem to tell the whole story, I think for those quarters quoted there was a net job gain overall.

Despite the harping, the last Labor department figure I've seen, I think for Q1 2004, was that unemployment was about 5.9% with other figures being favorable as well. I thought that figure is very nice, especially considering we were comming out of an overheated economy in the 90's where those considered completely unemployable were given a second look. I th

Re:Look, folks. Do it now, nicely, or be blindside

[PsiPsiStar]

That's not what the Indian gov. thinks. Ever hearl of the Bhopal chemical disaster? It happened because the Indian Gov. forced Union Carbide to use insufficiently trained Indian workers rather than Carbide's own, better trained employees. http://www.bhopal.com/facts.htm

The purpose of this globalization of labor resources is to pit one labor market against another, forcing wages down. NAFTA actually decreased Mexican wages. It increased profits for American companies using Mexican rather than American labor

A telephone call for comment

[Anonymous Coward]

was answered by Sanjay Patel, who couldnt comment as his superiour had popped down the shops in Delhi for a curry

Question

[USAPatriot]

How is this being "downplayed" if there is very little to play up?

Yes, when you take a survey, you expect people to be honest, the very few that aren't honest won't make much of a dent in distorting the picture.

Anyway, I don't know why slahsdot is playing protectionist when it comes to tech jobs in the US. You people enjoy the fruits of offshoring in cheap computers, gadgets, and other electronics. Tech jobs aren't any more sacred than manufacturing jobs. Adapt or die.

Re:Question

[MarkPNeyer]

Slashdotters are playing protectionist, because unfortunately many of them fall into the category of people who believe in "rights for me but not for you."

Ask a slashdotter what they think about the USA PATRIOT act, and you'll definately get an earful. "Keep the federal governemnt out of my own buisness; that gives them too much power!"

But then float the idea of taxing corporations so that they'll keep jobs in america, and a lot of those same slashdotters will say it's insightfull; that it's got merit and should be considered. Here's an idea - why don't we just raise taxes on companies that fire anyone, companies that don't make cheap products, companies that smell funny ... etc etc. It dosen't seem to bother the slashdotters because it isn't their freedom we're talking about; it's somebody else's.

Re:Question

[nelsonal]

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.

well

[Anonymous Coward]

I have to reply as an Anonymous Coward b/c my indian replacement took my slashdot account!

BPO jobs:

[anandpur]

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]

Re:BPO jobs:

[bpowell423]

I loved the last quote of the "Call centres put Indian mores on the hook" article. According to the article a lot of Indians are dropping out of university to work at call centers because it's quick money, and pretty good pay, relatively speaking. The quote is "A good college education is vital in the long run for career growth. What if the call centre bubble bursts one day?" Sounds a lot like kids here in the US that dropped out of college to join the dot-com bubble. Now some in India are worried abou

Re:BPO jobs:

[beforewisdom]

Interesting.

The person making the complaint in the article is an Indian Catholic Priest.

So an Indian who serves a religion exported from the west is complaining about young Indians working jobs exported from the west because it interfering with social customs not exported from the west.

Does it matter?

[91degrees]

There is a big attitude that ofshoring is taking away people's jobs.

What bull! Of course, These jobs don't belong to you in the first place, but that's missing an important point. There are always more jobs. Many of them will NOT be offshored. People need employees. People will create jobs when there are some free workers. If you can't get a job writing tedious code that a trained monkey can do, learn to do something that requires real skill and talent.

This is a continuous argument...

[Dagny Taggert]

..within my department at work. The company recently exported some data entry positions to India. Our IT manager claims this is just a natural progression to the "next thing", just as we made the move to a service-based economy. But what is the next thing? A progression to service seems natural in hindsight; can anyone point to what is after that? Of course, I hear people say that wages overseas will eventually climb, making companies here rethink this outsourcing strategy. But when? 50 years from now? I am no alarmist, but this is beginning to really, really worry me.

The only solution ...

[doudou42]

... is to be the best ! No matter the cost, if no one is able to do your job, you are safe. With the development of automatic code generation, middleware and so on, the number of coder will fall in a near future. Trying to reduce offshoring is just a way to gain time. Remember the beginning of the modern era, when labor worker where replaced by machines... but there are still manual worker, they are doing "haute couture" and earn a lot of money. Now, it is the same thing with software. But, maybe we are all wrong, maybe there ain't enough job for us all, not enough place, not enough ressources... Want to drive a SUV ? Eat super maxi menu ? We can't go on like this, it is time to slow down, relax and live a better life. The more is not always the best.

My job has not been shipped offshore

[TaxSlave]

My job has not been shipped offshore. There is no risk of my job being shipped offshore.

Of course, I've escaped the rut of the corporate/educational/medical IT structure and gone into business for myself. There's no more worries about losing my job because some corporate bigwig doesn't know how to use a computer correctly. I don't worry about the High Point Furniture Market doing badly, causing a warehouse glut and staff cutback. I can no longer use victim-mentality to explain what goes wrong with my career.

These days, if I don't make much money, it's because of the ups and downs of the retail cycle. It's because I need to get off my butt a bit more and do some work. It's because of a lot of things, but it isn't because of offshoring of my job.

Want to be insulated against offshoring of jobs? Learn carpentry, or HVAC maintenance, or any number of trades. Then, buy yourself a van, hit the road and work for yourself. The rewards are greater, the hassles are more easily managed, and you get paid extra for working with bigger problems or worse customers.

Oh yeah, and you'll get a thank you occasionally, from those you do the jobs for.

Re:My job has not been shipped offshore

[HeghmoH]

Hear hear.

Slashdot's reader base is finding it more interesting to complain and play the victim than actually put some effort, thought, and most importantly creativity into improving their situation. And slashdot's editors encourage it by posting stories like this one, even though I'm sure none of them have ever had to deal with outsourcing themselves.

Re:My job has not been shipped offshore

[Grishnakh]

there is no safe place to hide from economic crap.

There's always crime...

I helped do my part

[Anonymous Coward]

As a U.S. IT worker, I helped do my part for GE outsourcing. I traveled to New Delhi and GE's new facility in Haryana State where I helped to set up the infrastructure for helping to offload work from the GE financial units.

I can tell you that I did not feel the least bit sorry for the American call center employees whose jobs were sent to India. The Americans in the call center were men and women right out of high school and college with crappy attitudes and a streak of laziness a mile wide.

The Indian workers had master's degrees and had drive and ambition. The Americans did not even care about the job competition and thought they were owed work. Sorry, I cannot agree with protecting an entitlement!

That being said, there is still a barrier. Despite English being the common language between India and the U.S., Most Americans cannot understand the Indian accent and get rather frustrated. (I am sure it works both ways. ) Also, some of the Indians take a "Brahman" or intellectualy superior view and treat their American customers like crap, especially women.

The offshoring will level off in my opinion. Some companies will still try to gain competetive service level where empathy and understanding are part of the customer experience.

Re:

[account_deleted]

Comment removed based on user account deletion

Re:I helped do my part

[arnie_apesacrappin]

I can tell you that I did not feel the least bit sorry for the American call center employees whose jobs were sent to India. The Americans in the center were men and women right out of high school and college with crappy attitudes and a streak of laziness a mile wide.

I worked in a GE sub business that moved some of our calls to the GE facility in India. I will agree that our call center staff in America was as you described. If they would have gone through and done drug testing about half of the call takers would have been fired

That being said, there is still a barrier. Despite English being the common language between India and the U.S., Most Americans cannot understand the Indian accent and get rather frustrated. (I am sure it works both ways. ) Also, some of the Indians take a "Brahman" or intellectualy superior view and treat their American customers like crap, especially women.

I had to sub at our SecureID reset desk right after the transition. Because we had offices in Canada as well as the US, we had some French-Canadians call in from time to time. If you want to have some fun with accents, try to have a call between a French-Canadian and someone working a desk in India.

The main problem I had with the GE facility is that I don't feel they ever delivered the level of training the told us they would. During US business hours we were told we would get people that spoke English at a rating of 8 or better, on a scale of 1 to 10. In the time I dealt with the call center, we couldn't even get them to use the military phoentic alphabet. I'd hear things like "C as in kite, J as in giant."

The solution we finally discovered was to use instant messaging between the sites. We would have conference calls where all the Americans would talk to each other and the Indians would talk to each other, but for communication between the groups, it was all IM.

On a different note...

[GillBates0]

It may be useful at this point to take a look at this report [acton.org] titled "Multinational Corporations in the Third World: Predators or Allies in Economic Development?".

For a good part of the latter half of the last century, MNCs (which are incidentally mostly US owned corporations) have been trying to *market* their goods to third world countries with an aim to get their earnings up (expanding markets = more money). This has often resulted in loss of local jobs and industry and made the countries more dependent on foreign corporations, and local unions/organization have often opposed opening up local economies for this reason - but mostly to no avail.

Lately, we've seen that corporations have figured out that the skill/education levels in these so called developing countries have been increasing, and it's more cost effective to shift their manufacturing/services divisions abroad. This has caused widespread annoyance due to loss of jobs in the developed countries.

But really, is it the people's fault anywhere? Is it fair for people living in developing nations which have been invaded be these megacorps to just serve as profitable markets for the MNCs while being denied economic benefit from them? A bit of pondering may reveal that it's profit minded corporations which have been sucking peoples from both sides for their benefit (and for their parent countries' since the profit trickles down in the form of jobs/cashflow).

I think it's just the completion of a circle. Not flamebait - sincere concerns.

Some quotes:

Multinational corporations (MNCs) engage in very useful and morally defensible activities in Third World countries for which they frequently have received little credit. Significant among these activities are their extension of opportunities for earning higher incomes as well as the consumption of improved quality goods and services to people in poorer regions of the world. Instead, these firms have been misrepresented by ugly or fearful images by Marxists and "dependency theory" advocates. Because many of these firms originate in the industrialized countries, including the U.S., the U.K., Canada, Germany, France, and Italy, they have been viewed as instruments for the imposition of Western cultural values on Third World countries, rather than allies in their economic development. Thus, some proponents of these views urge the expulsion of these firms, while others less hostile have argued for their close supervision or regulation by Third World governments.

Incidents such as the improper use in the Third World of baby milk formula manufactured by Nestle, the gas leak from a Union Carbide plant in Bhopal, India, and the alleged involvement of foreign firms in the overthrow of President Allende of Chile have been used to perpetuate the ugly image of MNCs. The fact that some MNCs command assets worth more than the national income of their host countries also reinforces their fearful image. And indeed, there is evidence that some MNCs have paid bribes to government officials in order to get around obstacles erected against profitable operations of their enterprises.

No one's thought of this?

[RyoShin]

Has no-one thought of the possibility that Goldman Sachs might be wrong ? I don't know how trusted they are (I'd assume at least a bit, as they're used as a reference,) but even the most trusted firms/whatever can be wrong.

I'm not saying the Labor Department is right, but there's a chance that Goldman Sachs is wrong. I mean, they are estimates. I could do some quick researching, round to the nearest hundereds places, and report that as an estimate.

You're all pessimists.

/prefers to be an optimistic pessimist: Plan for the worst, try/hope for the best.

Re:No one's thought of this?

[TheSync]

How can anyone be right? The whole concept of comparing a job in the US with a job in a developing country is crazy. You may be able to track the movement of certain business elements, but the value equation is generally completely different.

How do we know that a new outsourced job isn't taking some business processes off the plate of a US worker so they can be more efficient with other business processes?

How do we know that someone working for a US company in India isn't actually creating jobs in the US through their work?

When Linus was creating Linux in Europe, who knew he would be creating tons of IT jobs doing Linux work in the US? Would it have mattered if Linus lived in Bangalore?

Re:No one's thought of this?

[rosie_bhjp]

I'm going to go with the pessimistic attitude because I already know that numbers coming out the government are skewed heavily to favor the administration.

We saw it just recently with the terrorism report. we saw it when tabulating the 'estimates' of the amount of weapons of mass destruction in Iraq.
We saw it when the administration intentionally withheld the true figures for the new Medicare/prescription card bill.
We saw it when the administration skewed and suppressed environmental research to support th

Un-Patriotic

[DrugCheese]

Ship 100,000 jobs overseas - It's a free market and a free country

Drive to Canada to buy medicine for your grandma - you're un-patriotic

Misleading Summary

[DRue]

The report claims that less than 3% of Q1 2004 jobs were lost to offshoring.

It's not 3% of all jobs - it's 3% of the jobs that have been lost. Quit with the mindless troll attitude. Don't blow the outsourcing thing out of proportion.

Oh, and by the way - all you ACLU loving /.ers - If you really believe in personal freedoms - you gotta side with Bush on this one. Companies ought to be able to do what they please within the law. All the local (MN, but it's everywhere) no smoking legislation lately is driving me nuts. Lets get the government out of business - yes that means that some companies will outsource some of their labor. Nothing new here!

Re:Misleading Summary

[DRue]

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.

Lies, Damned Lies, and Statistics

[xyote]

The number I'm seeing is 4,633 jobs lost to offshoring in the first quarter. Okay. So assuming a 6:1 US to offshore salary ration, then we should have seen only a 27,798 increase in offshore positions. If the increase was more then the US has had a net loss of jobs. And we definitely have not see enough of an increase in the US job level to maintain current emmployment levels in light of new workers entering the workforce. I'm talking about tech jobs mainly. So this may be good for the US economy but the economy and the workforce are not the same thing. It's sort of like saying that putting your children up for adoption is good. It may be good for your family's budget but it's definitely not good for your family.

Welcome to the global economy.

[stienman]

"And we'd like to welcome the technology workers of America to the global economy. Please, have a seat and make yourself comfortable. If you fight it you'll only waste time you should be spending upgrading your skills."

There are two scenarios here, let's play with them a little bit:

1:
We tax local companies who offshore to make offshoring less palatable. We tariff products coming into the US from companies who are offshoring but use certian tax shelters and place their corporation offices outside the US so the taxes don't affect them.
Outcome:
Other countries raise tariffs in response. Companies here in America lose customers because their products are so expensive compared to solutions and products purchased elsewhere by independant companies outside the US. American companies close shop unless they are 'saved' by tax breaks/loans/subsidies - the same companies that were taxed into not outsourcing.

2
We recognize the fallacy of America as an independant microeconomy. We allow companies to outsource labor which can be performed more cheaply elswhere. Displaced workers are forced to upgrade skills or accept a lower sallary.
Outcome:
Those who upgrade their skills earn more money, increasing the economic power of the US Labor force. National GDP increases, companies become more profitable, etc.

There is no realistic way to stop outsourcing the tech worker. All one can do is try to stay ahead of the curve. Get your MBA and manage outsourced projects. Move to a smaller company where outsourcing IT doesn't make sense. Start your own company.

Eventually the global economy will level out, and half of the tech work done here will be done there. This will happen regardless of the measures we are taking to slow it down. In the end our products are still competitive on the global market, and we still carry 1/3 of the international GDP. Fighting it is only going to slow down our economy and speed up the rest of the world's economy.

If you really want to keep your current life style, you'll learn to roll with the punches, pick yourself up and get back in the game.

-Adam

What a crock!

[gregor-e]

Once again, we see the old "conservation of jobs" myth that assumes that jobs are a fixed commodity that can be "lost". The reality is that companies that are able to achieve savings by offshoring will have extra capital for other projects. Companies will seldom outsource their core competency, since that's just asking for trouble. So, if a company is able to save money on non-core business process outsourcing, they should have more money to invest in core projects.

It also turns out that offshoring is a complicated business. I have participated as tech lead in three offshored projects. Only one of these ended up "profitable", costing us less than domestic talent would. Even though offshore workers earn a much lower salary than their US counterparts, the markup on their services is not small. We were paying $35/hour for talent that we could get for about $55/hour domestically. I think a lot of companies will experiment with offshoring and quickly discover that there are many sharp rocks under those inviting waters. The companies that are seeing biggest gains are those that set up offices in the offshore countries and hire the locals as employees, rather than consultants.

From a larger view, the baby boomers are starting to retire. If you check your census statistics, that is a huge skill deficit that we just don't have the population to replace in a growing ecomony. Therefore, if we wish to continue similar growth rates to what has happened over the past 50 years, we will need to:

1. Immigrate
2. Automate
3. Offshore

Remember 1999? Companies were recruiting waiters and putting them through IT training, just to make up the shortfall. If you knew where the power switch on your computer was, you could get an IT job. Well, back then, we had a shortfall of 4.7 million skilled workers. If similar growth is projected forward and the baby boomers are subtracted from the labor pool, we're looking at a shortage of over 20 million skilled workers by 2010. This will make the shortage of 1999 look like a picnic. Some predictions even show us using up all the available offshore talent by 2012 or so.

So whine all you like about offshoring. Soon, it'll be the only thing that keeps our economy growing.

Re:What a crock!

[kbradl1]

My parents are baby boomers and I work with several baby boomers. Yes they all want to retire, but guess what..... they can't. They have to pay for their kids rising costs of college. They have rising medical insurance costs and prescription drugs to pay for too. Retirement age as is the age to receive Social Security is rising because less people have the money to retire. Many baby boomers have lost their pensions and are returning to the work force. This means baby boomers are still competing for th

Offshoring problems

[Chief Typist]

A family member is currently a project manager for a new software product being created in India. As such, I have some insights into the situation -- and I don't think the current offshoring craze will last too long.

The basic problem is because there is approximately a 12 hour time difference between the US and India. This makes business communications quite slow. For example, at 6 AM in the US, it's 6 PM in India.

What happens is that the normal project related problems pop up during the day -- and if you need input from "the other side" then you have to wait up to 8 hours. Or make your best guess and verify it with "the other side" at a later time.

As developers, we all know this happens a lot during product development. What used to take a few minutes with a call or a quick meeting can take a day or more. This dramatically slows down the development cycle.

Of course, management is excited about the fact that the labor cost is about a third as expensive. They are now starting to realize that this benefit is offset by the cost of lost revenue (products that are late can't be sold!)

So long term, I don't see offshore development being used for new product development. It's likely that it will continue to be useful for product maintenance and support since they have a lesser need for constant communication.

-ch

Put incendiary language in its place.

[stienman]

"Companies were asked if workers had been replaced and taken at their word."

Because a statistically significant number of companies are scared to reveal the truth they will lie to the gov't about how many people they are offshoring?

The bureau has always taken companies at their word. Are you going to pay for them to audit american companies for labor statistics? It's stupid to assume that you'll get better numbers by holding a gun to someone's head. They'll lie if they want to lie just to see what you'll do. You'll be forced to implement laws and consequences for lies, and if you discover a company was lying then you get to prove it in court.

It isn't worth it.

The BLS has always surveyed a number of companies and a number of households for their information. These surveys produce unemployment numbers and a ton of other interesting statistics about the job economy.

If this bothers you then you'll really go wild when you learn that they only survey a small number of companies instead of all the companies in the US.

I love a good cynic in the morning. No wonder some people are so unhappy about outsourcing - they're never happy about anything.

-Adam

The Real Problem - The Bob Factor

[Scot Seese]

Offshoring creates a much larger problem that none of these articles have touched on. I call it the "Bob Factor." Here's how it works-

Bob worked for CitiGroup in Chicago. Bob was earning $80,000/yr for his database programming position in a light supervisory position with a few other coders under him. Bob had fifteen years experience and has worked on numerous mission-critical multimillion dollar projects.

Bob lost his job a year ago to offshoring.

Bob is now in his late 30's or 40's. Bob has a mortgage, car payment, spouse and kids to support. Bob cannot afford to quickly change careers. Starting over gets a lot harder with age for financial reasons.

Bob is now willing to relocate to smaller midwestern markets like.. South Bend, Akron, Indianapolis, etc. etc. Bob will now be competing with you for the $48,000/yr job that you had your eye on.

These displaced IT workers with gobs of experience and resumes 3x thicker than yours are out there competing for the same jobs that new graduates and guys with a few years and a couple certifications were hoping to get. They are the ones making new positions in IT harder and harder to find.

Ph33r the Bobs, people. They are making it harder to GET jobs or CHANGE jobs. And worse yet, they are destroying the IT salary horizon by bringing superior job skills to the table for entry and mid-level positions out of need, creating an environment where the average REAL-LIFE starting salary for IT is DECLINING.

In the area I live in, people with Masters' degrees and a handful of certifications are showing up for entry-level programming positions advertised at ~ $25,000/yr in the paper.

Offshoring is doing precisely the same thing to the IT market that the Japanese did to big steel in the U.S. in the 70's and 80's. The U.S. government did absolutely nothing to level the playing field then - What makes you think they will now? Who has more lobbyists buttonholing congressmen in the hallway on their into work? You, Joe Schmoe Slashdot reader, or Tata?

Signed,
Frustrated former IT shmuck changing careers

Re:The Real Problem - Afterthought

[Scot Seese]

..

As a few readers have pointed out so far - The Bobs are earning less money, so consequently they are injecting much less back into the tax base and are not purchasing the same amount of goods and services.

How much less?

If 830,000 people are forced to take jobs elsewhere for 50% less pay, that's 33.2 billion dollars/yr in lost income. That's assuming they are able to find jobs AT ALL.

This is using the "$80,000/yr" figure from my first post. Obviously not everyone that has lost their job to of

"Rightsource"

[Le Marteau]

My boss used that word in a meeting just the other day. After she paused, I asked her, "Did you say 'rightsource?". And she said, yes, that means outsourcing, when it is the right thing to do.

I can't stand it. I feel like I'm living in a fucking Dilbert cartoon. It drives me up a wall, how people try to change words to make things 'feel better'. That is one of the many reasons I'll never be in corporate management, because I don't deal in bullshit, and could never say 'rightsource' with a straight face.

Mod me down, please. I have too much karma, and I just needed to ventilate. I just found that funny, and disgusting, at the same time.

Dodgy statistics

[AlecC]

Your job and 830,000 others are gone.

This is very dodgy stiatistics. The fact that 830,000 jobs havce been sourced overseas doies not mean that 830,000 jobs have disappeared: that would be to assume no growth at all.

I don't have figures for softw3are developers, but The Economist reckons that the number employed in the US in call centers (one of the other major outsourcing scapegoats) has been essentially constant for about 5 years. Which suggests that one of the major drivers for outsorurcing is not so much cheapness as availability: the US has used up all the people able and willing to do that sort of work. Outsourcers have already found the hard way that the savings are way smaller than expected - even negative. But if you cannot get the people at home, overseas looks good.

Which is not to say that nobody has ever lost their job to overseas outsourcing - of course they have. But it is to suggest that there are still jobs somewhere in the onshore US for all those displaced - though maybe not where they currently live. But this is the US way - make firing easy so peopel will hire easy. The alternative is the European way: make it so difficult to fire someone that you don't dare set up a risky venture because the downsizing costs will double your losses.

Historically, the upside of the US attitude to jobs has worked very well. Why is Silicon valley in Californai, not England? Because the US has a risk-friendly, failure tolerant attitude. Losing out to outsources is the downside of the same coin.

what's the alternative?

[dekeji]

What do you think the alternative is to off-shoring? If US companies don't off-shore to India, do you think Indians will just sit around, twiddle their thumbs, and keep buying expensive US-made products? Not on your life: they'll build highly competitive domestic industries, with their entire staff based in India, using cheap labor, completely beyond US regulations, taxation, or control. They'll import less from the US and export more to the US and offer cut-throat competition to US companies in other markets. The consequence will be many US companies going out of business entirely. Numerous examples show that countries can go from wastelands to economic powerhouses in a few decades, and India is ahead of the pack already.

Besides, I also don't see any justification for calling these jobs "American jobs" in the first place. Just because the US happens to have been able to build a large industrial base when other nations were in shambles doesn't mean that that kind of extraordinary situation is a God-given right. Postwar US economic success was a lucky, but temporary, windfall. Americans, like the rest of the world, have to learn to live with real, tough competition from other nations and the real possibility of economic disaster--the US has no more found a "magic formula" for wealth than any other nation, even though many US politicians arrogantly proclaim otherwise.

Furthermore, it was primarily the US that dragged other nations kicking and screaming into the current system of globalization and the US has benefitted, and continues to benefit, handsomely from that system. Outsourcing is, in effect, at the very core of why the US wanted globalization in the first place: you get economic efficiencies from comparative advantage. It makes no sense to come back and complain about that the system is doing what it was designed to do now that it is actually starting to work as desired and as expected.

"Companies were... taken at their word"

[Abraxis]

Well, duh! If you ask the company, nobody is "replaced"-- departments just get downsized, and new divisions open up overseas doing the exact same job, but there is absolutely no corelation between the two... no sir!

About a year ago I was working as a contractor for a certain very large hardware/chip company. My immediate manager (an engineer) and über good guy wasn't "replaced" -- he was just sent to India to train somebody how to do his job, and then was send to the "redeployment pool" (laid off) a few weeks later as part of a massive downsizing of the department... nope, no replacement going on here!

How To Survive Offshoring (Recent Grads, README!)

[$criptah]

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.

Future of American IT Jobs

[trance9]

You can buy and sell IT JOB futures here:

http://www.ideosphere.com/fx-bin/Claim?claim=ITJ OB S

Includes a lot of links to BLS statistics and gives you some idea of whether you will have a job in a few years. If this claim trades above $0.50 then market participants expect the job market to expand; below $0.50 and it is expected to shrink.

Put your (play) money where your mouth is: You can get a high score in this game by predicting the future. If you really think all the jobs are going overseas sell sell sell.

It's kind of an experiment, and a non-profit/academicy/free thing so give it a whirl.

The way it should be

[jgardn]

Outsourcing is merely a product of freedom. If you want to stop outsourcing, make employees in the United States more competitive on the world market. We can do this by:

(1) Lowering or eliminating employer taxes. That's right, companies have the pay the government for the right to hire someont to work for them.

(2) Lowering or eliminating employee taxes. With lower taxes, employees will be willing to work for less.

(3) Reducing regulations surrounding employment. While employers are spending money scrambling to find ways to immunize themselves from RSI injury lawsuits, they are spending untold billions to consultants and for expensive products. This is one example of many thousands.

(4) Reducing the cost of living by reducing the cost of goods. The only way government can do this is by lowering taxes and by reducing regulations.

(5) Increase the value of our employees. Make reading a requirement for elementary school graduation. Make generally useful skills in the workplace (ethics, responsibility, hard-work, good attitude) requirements for high school graduation. Encourage studies in colleges, trade schools, and universities in math, science, engineering, and other profitable areas. Discourage the politicization of our college campuses and keep the focus on teaching and training. Make the cost of obtaining an education cheaper with less regulation and lower taxes.

When hiring someone in the United States is cheaper and more profitable than hiring someone in India, then we will stop outsourcing. President Bush is no more responsible for this phenomena than the Tooth Fairy is responsible for the bombs being dropped in Hiroshima.

In short, instead of complaining, compete!

Re:I am optimistic...

[WombatControl]

Excuse me but zero jobs should be lost to overseas workers. You know why? Because companies that do this should be taxed to hell and back for doing it. Make it so fucking unattractive that the companies will NEVER even consider a foreign worker cheaper than a US native. I have a feeling that the person currently running the show wouldn't ever think of THAT. Remember he's optimistic about furthering his "base" of the "have mores".

Yes! Let's do exactly that!

While we're at it, let's ensure that no policy t

Re: I am optimistic...

[MarkPNeyer]

Hear, Hear! I'm sick of hearing protectionist garbage, particularly on slashdot. I like to think of this as a place where intelligent people can debate ideas. It discourages me enough when some guy says that we should tax the hell out of companies who think about outsourcing, but then when people go and say this sort of thinking is Insightful? Give me a break! It makes me think of a bunch of Neanderthals with clubs sitting around in a cave. One of them stands up and says "GROG SMASH," and the others point and grunt approvingly - "Grog Insightfull!" they chant, and Mod him a notch.

Re: I am optimistic...

[Anonymous Coward]

Companies lobby the government for favorable treatment. Hell, Microsoft pays no federal taxes and it's the most profitable company and yet your mom and pop don't get tax breaks or incentives or abatements. Our conservatives believe in taxing workers, not businesses. In fact, handing them money through sweetheart deals. You're kidding yourself if you don't think businesses don't create "protectionist" policies to help themselves (but not workers, oh, no...)
If corporations have lobbyists, why shouldn't the av

Re: I am optimistic...

[mabhatter654]

It's not really outsorcing though. It's not like India has independantly built a grid-widget factory using Indian capital and research, staffed by Indian workers and run by India managers. It's not a native company that is competing to sell goods in the US that happens to score a better deal on a particular contract.

The current outsorcing situation is about US companies taking US money from profits of US sales to US customers for labor from US workers over seas...taking engineers, research, AND incident

Re:I am optimistic...

[nicedream]

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 [usatoday.com].

There must be something done to level the playing field, otherwise American labor will never be able to compete with countries that have much lower standards of living and little or no workers rights.

Re:I am optimistic...

[gcaseye6677]

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.

Re:I am optimistic...

[Shajenko42]

Assuming of course we actually have a free market. We don't. A free market assumes many buyers and sellers of the same product and perfect information; when you have just a few sellers of a product and disinformation in the form of advertising, you have something that does not at all resemble a free market.

Re:I am optimistic...

[nicedream]

The first company will then lower prices or watch the new competitor eat their lunch. That's the beauty of capitalism.

Your argument is nice in theory, but with all the outsourcing that has happened lately, shouldn't we be seeing a lot of decreases in prices? I haven't.

Workers "rights" != high living standards

[mangu]

There must be something done to level the playing field, otherwise American labor will never be able to compete with countries that have much lower standards of living and little or no workers rights.

I live in Brazil, where workers have many more "rights", or rather, entitlements, than in the USA. For instance, women have four months childbirth leave with full pay. Every worker has 30 days vacations each year, with full pay. Depending on the activity, some can retire with full pay after working for 20 years, it was only recently that a minimum age for retirement has been legislated. I know several engineers who retired in their early 40's. This list could go on and on, there are thousands of laws regulating labor in Brazil, starting from the Federal Constitution downward.

But this does not translate into a high standard of living. For one thing, it encourages illegality, if the alternatives are working outside the law or being unemployed, what would you do? Also, so many benefits do have a high cost. Taxes are sky-high in Brazil, and still rising. The minimum wage is equivalent to about US$80 / month, raising it would cost too much for the government to pay all the benefits to retired workers.

OTOH, even if there was a way to legislate against importing from countries with low standards of living, it wouldn't resolve the problem of outsourcing. Exchange rates still make a difference. If countries like China, India, or Brazil seem to have such low wages, part of it comes from depressed exchange rates. In Brazil a typical restaurant meal, for instance, will cost about US$4. You can buy a new car for less than US$5000, or a man's shirt for US$5.

Re:I am optimistic...

[Khomar]

I agree with what you are saying (especially the bit about a knee-jerk reaction). We cannot isolate ourselves and create an environment that stifles competition. And certainly attacking the high health costs and the sue-happy will help.

However, the problem I have with outsourcing and international competition is that it is not a level playing field. We have many requirements on companies that run in the US -- environmental standards, insurance requirements, minimum wage, etc. (I am sure that others can come up with even better examples) -- that many of the countries we are dealing with do not have. I agree with the parent poster in that I think there should be a tax to compensate for the differences in requirements for employees. How can we expect an American firm who has to spend millions to be environmentally friendly to be able to compete with an Indonesian firm with absolutely no attempts to be good stewards with the land?

This is not an easy problem, but I think attention needs to be given to the requirements on our companies. I do not propose that we lower our standards. Rather, perhaps we should require companies working in foreign countries to either meet our standards or apply a financial penalty for failing to do so.

Our countries companies cannot hope to compete with other countries given the current environment in America. Maybe this means that America itself needs to change to keep up.

Re:I am optimistic...

[Paulrothrock]

This is not an easy problem, but I think attention needs to be given to the requirements on our companies. I do not propose that we lower our standards. Rather, perhaps we should require companies working in foreign countries to either meet our standards or apply a financial penalty for failing to do so.

Perhaps we should renegotiate our trade agreements to include these things. Maybe withdraw from the WTO and NAFTA until these are worked out. (For example, require that Mexican trucks meet US emissions stan

Re:I am optimistic...

[jafac]

It's June, 2004, and I can't believe we're STILL arguing the BASICS of this complicated issue on Slashdot. Go to the archives and re-read all the previous threads on outsourcing. We've discussed these issues to death. It's offtopic.

The TOPIC here, is that the Bush Administration produced a report, which includes demonstrably false, and intentionally misleading information, which distorts the magnatude of the problem that this poses for America and our economy. Gee, Bush has never done anything like tha

Re:I am optimistic...

[EricWright]

Vote Bush/Cheney in '84 and you too can be optimistic and believe in the people of America!

I don't know about you, but I'll probably be dead in 80 years... I'm betting Bush and Cheney will be, too!

Re:I am optimistic...

[Rico_za]

You know why? Because companies that do this should be taxed to hell and back for doing it.
Fine, but be prepared to pay at least twice what you now pay for a lot of your consumer goods, including your PC, TV, clothes and most of what you can buy so cheaply at the mall or Wallmart. Why is it OK to outsource the manufacturing jobs so you can have cheap electronics, but when the job being outsourced is something you're trained / interested in, it's wrong?

Re:I am optimistic...

[elefantstn]

Excuse me but zero jobs should be lost to overseas workers.

Ah yes, the boundless economic ignorance that leads to +5 insightful on Slashdot.

An economy where no jobs are going overseas or coming back is a lifeless, growthless economy. Acting as if even one job moved overseas is somehow a problem does nothing but illustrate your own particular ideological blinkers, which prevent from thinking in any halfway rational way about complex topics like economics and globalization.

Excuse me

[MarkPNeyer]

"Comapnies that do this should be taxed to hell and back for doing it?"

This post betrays an utter lack of economic sense, and a complete disregard for individual rights. So you think companies should be taxed to hell for hiring employees outside of the U.S., and then Slashdotters think this idea is insightfull? What the hell happened to keeping the federal government out of private buisness? I see now that most of you slashdotters are all about personal rights, so long as those rights are yours and rights aren't given to other people who might use them in ways that you don't like

Your idea that "zero jobs" should be lost to workers overseas is completely, utterly, assinine. Anyone who thinks this sort of thinking is "insightful" needs to learn some basic economics. Everyone benefits when companies become more productive because their products are made cheaper. We have seen a net increase in the number of americans employed as a result of international trade, because those people in foreign countries who get jobs will now be able to purchase more expensive American jobs.

You really piss me off. Saying that we should tax the hell out of companies so that they keep all their workers here is mindlessly stupid from an economic viewpoint, and utterly unamerican. Is there any consitutional basis for controlling whom private companies wish to have for employees? No! Mind your own god-damned buisness. If you think too many companies are outsourcing, then start your own company with only american workers and american inputs, and see how long you last in a free market. The truth of the matter is that it's the American People who are pushing for outsourcing becuase they demand cheaper products. And why shouldn't they?

Re:Excuse me

[chrismcdirty]

Since the most vocal people about outsourcing are IT workers, I'd like to know how many others in the IT field are experiencing lower prices for licensing software libraries to use with their own product. How many of us consumers are experiencing lower pricing for the software we buy at Walmart, Best Buy, and Circuit City? I know I haven't seen much of a drop in prices for these, except for PC games which are an average of $40 now, as opposed to $50. As long as I (the consumer) am still paying the same pric

Re:I am optimistic...

[fiftyvolts]

You're idea of taxing companies for shipping jobs overseas has merit. Despite this, however, I am reluctant to go along with it. My concern is that the current state of the IT industry depends to a certain degree on the cheaper labor of programmers, etc. in countries that do not have the labor laws we enjoy here in the US. If the government begins taxing this practice will the impact force companies to hire American workers? Or, perhaps companies will fire more American workers to make up for the taxes. Or the company might just fold and leave all their employees without jobs.

I don't know enough about economics and business to make a conjecture about which of the above would happen, but they all seem like reasonable possibilities. Is there anyone with a MBA out there who can elaborate :D

As a side note I am an EE and, while I'm not one of the jobs most likely to be affected by the shift, it still makes me quite uncomfortable.

Re:I am optimistic...

[nelsonal]

If an overseas worker is considerably cheaper than an American one, if we eliminate the savings through taxation, overseas companies will simply form that capture the difference. Then the US company will evenutally go bankrupt (and wipe out even more jobs). Imagine how expensive a cheap Ford would be if all car parts were required to be made in America.
Realize that many technology jobs have been replaced by automation that lets a few people do work that many would have been required to do years ago. That's a much bigger factor than offshoring. If you want to protect yourself learn as much as you can about what others use your products to accomplish, even if you are no more efficent than an indian programmer in lines per hour, you have a tremendous advantage over him in making software that will do more for your company (because you can see how it is used).

A fable that I am stealing from an Econ prof goes as follows. Imagine a bright engineer announces a development that allows him to covert grain into cars. He buys tons and tons of grain, which goes into one end of his factory, and out the other end roll cars (at considerably less cost than Detroit can produce them). The machine is rather automatic, so while he doesn't hire too many people, there are a few jobs created in his machine. Everyone is amazed at his prowess, even Detroit who has to adjust to compete with this new competitor, they vow to become more efficent producers.
A few years after he begins operation a bright, hungry investigative reporter gets the scoop of his (or her) lifetime, the factory does not convert grain into cars, it's a cover on a large boat dock (grain is exported and cars are imported). After he blows the lid of the story his cars are taxed, protested, and disliked. Why would it be alright to convert grain into cars through an industrial process, but not alright to trade for it? That's why I'm a free trader.

The problem is not binary

[gminks]

There are so many levels to this outsourcing issue, it really is pointless to say we should always outsource or we should never ever outsource.

As anyone who has looked into this issue can tell you, there is not in most cases a one-to-one correlation between an American losing their job, and the job going offshore.

For instance, Microsoft is shutting down a major facility in the US [eweek.com]. They are also hiring in India [indiatimes.com]. Will the Microsoft jobs lost in the US be counted as jobs lost to outsourcing? Probably not.

Re:I am optimistic...

[Pxtl]

The problem with this attitude is that there are ways that first world nations should not have to compete. While cheaper cost of living is a sensible reason to outsource, loose labour laws are other reasons they outsource.

I mean, its one thing to outsource coders to India where its just like a programmer here - its another to outsource labour jobs to countries like Indonesia where they can treat child workers as abusable slave labour.

I figure there should be tariffs on outsourcing and importing - free tr

That's politics for you.

[khasim]

Not only do they incorrectly calculate the numbers, but they also don't use the correct numbers in the rest of the article.

It says we lost 3 million jobs since 2001.

But then it says we've gained back 1.4 million of those jobs recently.

But our population has been growing since 2001. What about the jobs that are needed to employ the new workers entering the workforce in 2001, 2002, 2003 and early 2004?

And what is the total pay for those segments of the population?

If I get outsourced as a sysadmin, and I take a job flipping burgers, then that's still ONE job. But the pay rate is very different.

It isn't just a matter of adding X jobs. They have to be in similar or better fields at similar or better pay.

Re:Don't strain yourself.

[king-manic]

How do you explain 5.6% unemployment? The same number that Clinton had that everyone called "great."

As a statistically trained person I'd like to point out that thats a agrigate number that is a generalization of the workforce. As such it doesn't mean dick. If 30% of all jobs switched from white collar to service, the unemployment woudl still be 5.6 but now the average income has drastically fallen.

The Great Hollowing Out Myth

[solarlux]

No, this debate runs much deeper than the current election. The editors of The Economist (a very respected magazine) have argued for years against the FUD by which special interest groups seek protectionistic economic policy. One quote from an excellent write-up [economist.com] from the publication:

Outsourcing (or "offshoring") has been going on for centuries, but still accounts for a tiny proportion of the jobs constantly being created and destroyed within America's economy. Even at the best of times, the American economy has a tremendous rate of "churn"--over 2m jobs a month. In all, the process creates many more jobs than it destroys: 24m more during the 1990s. The process allocates resources--money and people--to where they can be most productive, helped by competition, including from outsourcing, that lowers prices. In the long run, higher productivity is the only way to create higher standards of living across an economy.

Yes, individuals will be hurt in the process, and the focus of public policy should be directed towards providing a safety net for them, as well as ensuring that Americans have education to match the new jobs being created. By contrast, regarding globalisation as the enemy, as Mr Edwards does often and Messrs Kerry and Bush both do by default, is a much greater threat to America's economic health than any Indian software programmer.

What?

[Dr. Cody]

As another example, recently a government study pointed out that children who had breast milk has 30% fewer incidents of ear infections, allergies and Downs syndrome, compared to infants who used formula.

Wait a second there. Downs Syndrome is a chromosomal disease--the battle is lost the moment the ovum starts developing. How on earth can breast feeding help?

ANOTHER EXAMPLE

[jmulvey]

Here's more fuel to your argument:

http://www.nypost.com/business/23936.htm

WHAT ARE THEY SMOKING AT THE LABOR DEPT.? By JOHN CRUDELE

May 11, 2004 -- DON'T get too excited about all those new jobs that were supposed to have been created in April.

I'm not going to waste a lot of my precious space on this, but the bottom line is that most of the 288,000 jobs that the Labor Department says were created last month may not really exist.

They could be figments of statisticians' optimism.

Anyone who

Re:in the not so distant future

[mikael]

I wonder what happens when the next generation of Indian kids realizes he could be making $50k+ a year programming over here and they all start coming to America.

They did this years ago. The sole goal for many Indians was to get a Computer Science degree so they could get a job in the USA. The downturn in the IT market forced them to return to India, which in turn led to a large pool of unemployed engineers/programmers. This allowed the contract support companies in India to grow, thus causing the trend