An Independent Study on Offshoring IT? 642
vsprintf writes "What are the real effects of offshoring on the U.S. technology sector? Pick your economist on the subject. The Bush administration's Gregory Mankiw says it's all good, and exporting jobs is just a new way to do trade. In Congressional testimony, Ralph Gomory says a little bit is okay, but too much is bad, while Herman Daly says it's just plain bad. The ITAA's paid mouthpiece, Harris Miller, says it must be good because IT workers in India wear Nike tennis shoes. At last, it appears the IEEE-USA has persuaded Congress to pay for an independent study to determine how offshoring really affects U.S. IT."
Nike shoes (Score:5, Interesting)
Re:Nike shoes (Score:4, Interesting)
Re:Nike shoes (Score:4, Insightful)
Re:Nike shoes (Score:3, Insightful)
Re:Nike shoes (Score:4, Insightful)
If this is at all true, then clearly there must be some way in which Indians purchasing shoes made in Indonesia is beneficial to the average US citizen. The question is, outside of the vanishlingly small minority of the population who are either Nike execs or large Nike shareholders, how does the US (taken here to mean the majority of citizens thereof) benefit?
Re:Nike shoes (Score:3, Insightful)
Re:Nike shoes (Score:2)
Re:Nike shoes (Score:4, Insightful)
If you declare a six figure income, the government will take 40-50% of it. But most people earning that sort of money can afford the services of an accountant who can give them advice on how to make six figures look like five.
Re:No, it is not enough (Score:3, Interesting)
Isn't that communism? No offense, but I have seen communism with my own eyes and I will take the hellishly evil capitalism you are talking about over communism as implemented in the historical Soviet sense
Perhaps the problem isn't that the government isn't taking enough money - it is that the money that the government takes isn't being spent in an economically responsible manner.
See also : The Big Dig, a $17B (that's
Re:Nike shoes (Score:5, Insightful)
For a low range in the six figures this is true, but as you progress towards the richer and then the wealthy, the actual percentage of assets paid in taxes drops dramatically. And let's face it, the people making money from off-shoring aren't in the low range of 6 figures. This is because most of the money the federal government gets from the rich and the wealthy comes from capital gains tax (the sale of shares) or dividends tax. The bush tax cuts have dramatically reduced [turbotax.com] these. Also, you have to actually sell your shares or get dividends for this to kick in. If, like Bill Gates, you keep your fortune in paper, then you are not taxed at all.
Also, lately there has been a wave of corporate off-shoring (also known as inversion), where you reincorporate in a tax shelter (like the tax-free bermuda), so that you pay dramatically less taxes. It's part of the reason why 60 percent of US corporations didn't pay any taxes between 1996 and 2000 (microsoft being one of those 60 percent).
But it is dumb to say that the average Joe in the US gets no benefit if some rich honcho makes a few billion bucks from some folks in India.
Objectively true, some of that money does flow back to regular people. But more is lost by off-shoring than comes back in corporate profits, since only a percentage of the profits gets spent or reinvested inside the US.
Re:Nike shoes (Score:2)
Re:Nike shoes (Score:3)
Without manufacturing or thinking jobs, what can we possibly be doing to keep ourselves relevant in this situation? The so-called "Bollywood" proves we can
Re:Nike shoes (Score:4, Insightful)
Second, in EVERY wave of outsourcing in the past, both the government and the corporations have been there to provide retraining programs and a safety net for those between whole new careers. Low rate loans for returning to college, placement support for finding the displaced people new jobs. When textiles were lost long ago, these people who operated looms and presses were retrained to operate other machinery and moved into better paying jobs. When the manufacturing sector really started to bite the dust, you could open a paper on just about any given day and see articles about what the government was doing for you, and articles about how this company or that company was offering its laid off workers workshops in moving up to higher-paid white collar positions.
Each time, this was hailed as an advancement for the people being displaced. Sure, it sucked for them at the time, but they had something to look forward to, and help in getting from where they were to where they were going.
When the dotcom boom died, there was still the corporate placement efforts, but the government had largely quit caring. People lined up for unemployment, but damned if you could get a scholarship or a loan to learn a new profession. The dot com bust was a correction of an over-saturated sector of the economy. Now that its corrected though, we're asked to tolerate additional losses.
Are we given some light at the end of the tunnel? Are we moving up? No, instead we're told to smile when we say "would you like fries with that?" and that in the long term after we're all dead, things will be OK. Better paying jobs? Doing what? The best answer so far is that the cream of the crop will float to the top and hold onto jobs paying better than ever, the rest? Well, they can go pump out people's toilets. Assuming of course they can get retrained for that, given the apprenticeship and licensing barriers of entry into plumbing, carpentry, and electricial work in most states. The worst answer so far, which nearly everyone offers is "I don't know." What can Americans do to have a stable non-outsourceable income now that all production industries have left? "I don't know."
The difference really is in the hoping. Before, people could aspire to something better and were at least given a good show of it. Now, we're all bitter cynics without even hollow promises of a better future.
Re:Nike shoes (Score:3, Insightful)
Re:Nike shoes (Score:5, Funny)
You're forgetting the basketball players and other sports-models paid millions to promote them. Thus there will be a cashflow into the US gold jewellery, steroids, cocaine, and call-girl industries.
How's that? (Score:4, Insightful)
Re:How's that? (Score:3, Interesting)
I saw this show on PBS that describes how corporations use tax shelters using the tax law loopholes. If they really paid actual taxes, every citizen in USA would be paying about 15% less tax. You can watch the full show online here:
http://www.pbs.org/wgbh/pages/frontline/shows/tax
The fallacy (Score:5, Insightful)
The big fallacy in all the economists' arguments for offshoring is right here: "US GDP increases, so that must be good for the US."
But what's really happening is this: incomes of a few CEOs go up from (say) $1M to $2M, while incomes of 10 times as many engineers go down from (say) $100k to $20k. That's a gain in money terms, but it's very bad for 90% of the people affected. So, it's bad for the USA.
Re: (Score:2)
Re:The fallacy (Score:3, Informative)
PC's didn't become mass-consumables until they started being largely made overseas (except for the processors). There would have been much fewer computer programming jobs without offshoring.
The economic arguments for free trade are sound and they are pretty much laws at this point. When an industry is off
Re:The fallacy (Score:4, Insightful)
This is probably the most unintentionally funny thing I've read in this whole comment list. While it is true that other countries send their people here, are you not aware that due to the rising costs of US healthcare, upper-middle-class people in the US routinely leave the country for major elective surgeries (and some other non-critical surgeries where travelling half a day isn't a problem), to have them done by American-schooled foreign doctors in modern facilities (largely paid-for by these American patrons) in other countries where expenses are lower? How long before the rich people around the world realize that they're paying too much?
As for earning wealth, what exactly does a CEO do that merits their "vast" wealth? They don't create new products for their company to sell, they don't market these products to people, and as Enron has proven, they don't even take the fall when their corporation does something illegal. To me it seems that they play golf and find new people to trade board positions with, and to promise to vote each other big raises at the next board meeting.
Re:Nike shoes (Score:3, Interesting)
Re:Nike shoes (Score:2, Interesting)
Ah, the ironies' of globalisation!
But Nike is an American company, no?
The buyer in India spend money on the Nike shoes, Nike pays the labourers in Indonesia, and pockets the difference.
Some share traded on the American stock market incrases in value, and Americans are happy.
Re:Nike shoes (Score:2, Insightful)
Re:Nike shoes (Score:2)
It lowers IT costs for US companies. (Score:2)
I thought that was self evident, but many people here in
Re:Nike shoes (Score:2)
The race for the bottom (Score:5, Insightful)
The rest of us will be left with nothing to do and it won't matter if goods and services are cheaper if you don't have a wage to pay for them.
Meanwhile the Indians etc. will be undercut by the Chinese and they'll be undercut by someone else.
Where does it end?
Re:The race for the bottom (Score:4, Funny)
It all ends when the world abolishes money and robots perform all our manual labor! In the end we should all be better off :)
Re:The race for the bottom (Score:2)
Re:The race for the bottom (Score:2, Insightful)
But the have nots will always outnumber the haves by a huge margin right?
When too few people have too much, it is time for a riovolution!
Re:The race for the bottom (Score:4, Insightful)
And that, is our future less than a century from now, I'm afraid.
Eventually the corporate oligarchy will be overthrown by sheer weight, as we outnumber them.
The tech industry is the LAST (and pinnacle) wave of the industrial revolution. Lose those jobs and the middle class is gone forever.
Re:The race for the bottom (Score:2, Insightful)
Re:The race for the bottom (Score:2)
Not much of a surprise - not built to meet the challenges encountered today. Although, too plain clear for many to see.
CC.
Re:The race for the bottom (Score:2, Informative)
An other idea would be (this just a personal opinion): most probably the lowest quality (e.g. untalented) workers will be fired first, so what we see is a bunch of people who demand money for their very few merits.
Re: (Score:3, Insightful)
Re:The race for the bottom (Score:2)
More wealth - for whom? (Score:5, Insightful)
You are correct to remind us that capitalism is not a zero-sum game; wealth is created. It is unevenly distributed, but still, most people have gained in the past. If your boss increases his own income by $100k and increases yours by $5k, well, the bottom line for you is a gain of $5k.
Now, that is changing. Today's CEO is greedier than Carnegie or Rockefeller or J. P. Morgan were. To increase his personal income by $1M, today's CEO will destroy the careers of dozens of engineers. They are not being replaced by automation, which increases the productivity of other American workers. They are being replaced by Indians and Chinese. To economists, it's a gain if one man gains $1M while 10 others lose $80K each. In the real world, it's a disaster for our society.
One possible way to attack the problem, without unduly restricting the economic freedom which helps the whole world to progress, would be to recognize what these CEO's are doing. They determine their own salaries, in reality. A CEO who takes home more than 40 times the median salary of employees in his company is basically a thief. "Compensation" in excess of 40 times the median salary in the same company should be regarded as prima facie evidence of theft.
Re:More wealth - for whom? (Score:4, Insightful)
That one person's work can be worth more than another's is obvious, IMHO. That it is worth THAT MUCH more (your example is 40X, I'm not going to quibble about numbers) indicates to me that the CEO is grabbing money. I would argue that the CEOs have formed a sort of club, and in that club they can all raise their own pay, and that they have done so completely out of line with what they're producing.
Even failing companies have highly paid CEOs with golden parachutes. If the CEO were worth THAT much, the company wouldn't be failing. Even when a CEO gets dumped, he gets a severance package that exceeds my life's earnings.
The disparity is not the issue, the magnitude is.
Re:The race for the bottom (Score:5, Insightful)
That would be true if the other factors were globalized at the same time, the way they are in the US. Education, labour rights, workplace environment, worker protection, social development, freedom of movement, etc.
For the moment, it's hardly as if people can move to a place where there's a lot lower cost of living and follow the jobs. Instead they have to wait for equilibrium to be reached, and those other countries to evolve, until they lose the jobs in question, whereupon another labour pool gets exploited for a certain period.
Wealth everywhere does not increase from that. Wealth gets concentrated to the abusers of the situation, and a miniscule amount (as small as is possible to maximize profits) gets redistributed to the exploited labour pool.
The problem with globalization is that it's not going far enough. Opening markets should be accompanied with freedom of movement and balancing social systems.
Otherwise we end up with the current exploitation system that ultimately will benefit only a few individuals.
Re:The race for the bottom (Score:5, Insightful)
The previous post by jsebrech was much closer to what actually happens: corporate execs and shareholders benefit from outsourcing, the average American does not. There is some benefit to a person holding a retirement plan, sure, but do you really think that a 2% rise in your well-diversified , oh, say, $70,000 stock portfolio due to outsourcing will offset the $90K job you just lost because they outsourced you? And I'm not even getting into externalities here, such as unemployment insurance to be paid, broken marriages because of increased stress, lost tax revenue for the government, etc. etc.
Losing lots of jobs is, I'm sorry to say, a big deal. Especially when no new jobs are being created to replace them, at the same general salary level. The only way for outsourcing to not be a zero-sum game is for them to be able to move to India to keep their same jobs. That's classical economic theory. In order for labor and capital to balance, they must be allowed to seek equilibrium. But while capital is allowed to move freely, labor is not. If your annual income is less than seven figures, outsourcing is most likely a zero-sum game for you at this point.
Re:The race for the bottom (Score:4, Insightful)
That's the risk you run being in a footloose sector. There are no physical requirements for the IT work being offshored, so there are no reasons for it to stay anywhere. The person who offers the best deal (note: not necessarily the cheapest) gets the business. It's not just charging a low price that gets these companies the IT work, but a certain guarantee of quality. If the US can't compete financially, then it must add some value that can't be added somewhere else.
It's the free market at work. Something the US has been pushing on everyone for a long time. Something about cakes and eating springs to mind ;)
Re:The race for the bottom (Score:5, Insightful)
Your glossing over the fact that countries like China artificially manipulate their currencies and wage rates, and have a dramatically lower cost of living. It will simply be impossible for anyone living in a developed country with a free floating currency to complete against them in any field outside of the service sector. If you want to rant about free trade then China has to let their currency float. Until they do they are going to steal the rest of the world blind.
Amazingly enough the U.S. is evolving to nothing but service sector jobs for precisely this reason.
To put it another way, if a Chinese worker and an American worker are equally educated, equally qualified and equally hard working the Chinese worker will win everytime.
Now lets turn to an area where the U.S. did have an advantage. If a creative mind in the U.S. invents something and patents it, or a company invests a bunch of money developing a complex and innovative device. This is a one of a kind device that would insure the company financial success especially with the backing of a patent. You see patents are bad in software but they are priceless in the hardware world. What does China do. It buys the device, reverse engineers it for a fraction of what it cost to develop originally. They sell a knock off for half the price and the American company goes out of business.
Another path to the same demise, an American company has over the years developed a huge portfolio of intellectual property, a dumbass CEO decides he wants to exploit cheap labor and offshore the manufacturing of the products based on the IP. When he does his IP is quickly stolen by an employee and a competing company pops up owned and operated solely by the Chinese and they again bury the American company.
All in all I agree America has spent all its history singing praises of free markets so they should live and die by them, but if you are going to have them they have to be really free, which means freely floating currency and wages along with intellectual property protection. We don't have free trade today, we have trade completely stacked in favor of America's competitors. Unfortunately the Bush administration is to stupid to realize this is going to bury the U.S. in the end. All they see at the moment is cheap labor and improved profitability for corporations who are off shoring. Republicans are generally dumb enough to think thats all that matters.
It should also be noted that Bush's labor secretary is, I think second generation American. Her family is from China. Intestingly enough they make their family fortune in container shipping from China to the U.S. Isn't it interesting the Labor Secretary who should be looking out for the welfare of American workers actually has a personal conflict of interest in favor of off shoreing. Of course she isn't heading the Labor Department to look out for American workers, she is entirely there to drive down wages and improve corprate profitability, for example through the new overtime rules designed to deny overtime pay to millions of American workers.
Re:The race for the bottom (Score:4, Insightful)
Well you are correct that Democrats are about as much to blame as the Republicans. They were integral to America's destroying its economic base through the WTO and NAFTA. The WTO might have worked if it had led to really free markets and fair trade but its resulted in American markets being nearly wide open while places like China are maintaining massive barriers and are engaging in wholesale cheating. They know they can get away with it as long as American CEO's are turning a profit. When China has achieved world economic dominion and they don't need American companies any more those CEO's are going to rue the day they sold out America to China, but of course they probably wont because by that time they will probably be rich and retired to a life of luxury so why should they care as long as the gate on their gated community works to keep out the starving people they sold down the river.
The only thing in the Democrats favor is they've realized now it was a mistake and are backtracking. The problem with the Bush administration is they are still singing praises of the current trends, and are encouraging it to accelerate in face of the obvious evidence its going to devestate the U.S. economy in the long run. It is a tribute to blind stupidity driven by short term greed.
They fail to realize that, in China's case in particular, this is warfare, economic warfare designed to defeat the U.S. and Old Europe, something that would have been difficult or impossible to do militarily, but is proving to be child's play to do economically. China has already started to try to dictate to the U.S. about policies and arms sales to Taiwan. In the not to distant future they will be able to blackmail the U.S. in to doing anything they want by the simple threat of stopping the container ship traffic from China to the U.S. Even more so if there is eventually armed conflict between the U.S. and China, the U.S. will realize it was a mistake to move all of its machine tools and steel mills to China. The U.S. wont be able to manufacture anything. It will wake up one day and realize the last machine tools were sent to China and it will take years to rebuild the U.S. industrial base, from scratch, in a time of crisis. Having machine tools and being able to build machine tools is pretty important to a manufacturing base.
"Also, given the fact that China is where U.S. companies are looking to move jobs wouldn't it make sense to have someone with some Chinese ties directing the American job market in hopes to maybe fight fire with fire?"
I could see you making this argument for Commerce Secretary. I don't see anyway you can rationalize it for Labor. Its just a basic indicator the people who appointed her are openly hostile to working people. Everyone knows they are, its not like its a secret. Your union comment is just classic Republican rhetoric. Fact is working people should have a shot at making a living and surviving, unions, CEO's and you be damned.
Re:The race for the bottom (Score:4, Insightful)
Re: The race for the bottom (Score:2, Insightful)
> Yes, it'd be better if companies just wait to go out of business rather than try to remain competitive.
It's a Tragedy of the Commons problem. If one company outsources, it's business savvy; if they all do, it's economic collapse.
Notice that consumerism accounts for ~2/3 of the US economy. When consumers don't have any money, that prop of corporate megabucks will fall.
Of course, the USA has surely been living an unsustainable dream for the past century or so. Maybe all this is just the first phase
Roger, you should change your password (Score:2)
The percentage of people holding EITHER went down massively over the past 3 years... your argument makes no sense.
Re:Roger, you should change your password (Score:3, Insightful)
you CAN'T pay into insurance of a 401K when you don't have them.
If you paid any attention to the news, you'd know that less and less people have insurance and less and less people have 401ks. Less people can afford insurance (esp health insurance) and companies offer less perks. The "benefits" you are touting are already going to fewer and fewer people.
It's nice to read the whole fucking message before you go off on your little tirades. If you did you would of realize THAT is how your arg
Mankiw is such a hypocrite (Score:4, Interesting)
Re:Mankiw is such a hypocrite (Score:5, Informative)
For an economically-informed discussion of outsouring, see this article [foreignaffairs.org] by Daniel Drezner [danieldrezner.com].
De-skilling (Score:4, Interesting)
I maintain the major problem is gradual de-skilling. If potential software engineers simply see that their future jobs are likely to go offshore, they will not go into the profession. Software is still a somewhat apprentice based profession in that you usually require some coding skills before becoming team leaders or designers and then development managers and CIOs or CTOs.
If you are pulling away base support in the profession, then de-skilling will gradually move up the ladder. More jobs,more high-powered jobs will move offshore until wage parity ensues. By then, it's too late, corporates will have followed the skill base. An industry responsible for (a rough guess) 15% of Western economies will have moved elsewhere.
And you can't compare the software industry to manufacturing. Software is not manufactured and, so far as I can see, will not be manufactured for at last 25-30 years. But guess which countries will reap the benefit of writing the code manufacturing software?
And of course.... (Score:2)
Smell the coffee folks, what may be working against you now may be your blessing in the future.
Global markets and competition are here to stay. You either get used to it and act in consequence or will be left behind with your unemplyment benefits.
Coming full circle or selling tomorrow ?. (Score:5, Insightful)
What I'm personally seeing is that the US/EU companies are firing the junior programmers and keeping the senior architects due to outsourcing to India. The effect of this is to essentially cut out the entire next generation of software architects because they do not get enough experience (and often quit IT totally).
If you were a selfish nationalist , they are selling tomorrow for today. But if you were a Capitalist nation , it makes perfect senseDon't dish it out , if you can't take it applies for Capitalism as well. (think of this as payback for all the agent orange and napalam used in name of Capitali^H^H^HDemocracy)
The real sad part is that actual losers in this nothing to do with the past events which built up to this (and neither will those of the future).-- 250 USD per month and 70 hour weeks does not a sweatshop make.
Re:Coming full circle or selling tomorrow ?. (Score:3, Interesting)
Actually, we are losing our senior ppl as well. But what you are saying about IT here is essentially correct.
I find it funny that when I went to school (Colorado State University), I was #1 in all my classes. But my competition were the Indians and Chinese, not Americans. As a nation, we have gotten lazy and and are paying the price.
Re:Coming full circle or selling tomorrow ?. (Score:3, Interesting)
What I'm personally seeing is that the US/EU companies are firing the junior programmers and keeping the senior architects due to outsourcing to India. The effect of this is to essentially cut out the entire next generation of software architects because they do not get enough experience (and often quit IT totally).
I don't know that that's what will happen. Maybe what it will lead to is a realignment of software engineering as a discipline, along the lines of other engineering disciplines. When US com
Re:Comin...selling tomorrow ?.- You sorry fuck (Score:5, Insightful)
However I do think that this was exactly the thinking that led the senior brass in Washington to send them there. The Vietnam war (and the Korean war too) was prosecuted because the rise of communism was seen as a threat to the American way of life - in other words a threat to Capitalism.
Unfortunately America preaches capitalism and free market economics all the time but is very two-faced about this kind of stuff. Massive subsidies to domestic industries and sanctions against foreign industries is directly contrary to these ideals.
Interference in the affairs of other nations is rarely welcomed, whether that is done through economic means or with a gun. The US doesn't like it when other nations try to interfere with its own internal affairs. For some reason though they seem to think it's perfectly OK for them to interfere with the affairs of others.
When you behave like that payback is inevitable - another name for this concept is Karma.
Re:De-skilling (Score:3, Interesting)
Easy answer (Score:5, Interesting)
a moderate outsourcing is good for everyone, it opens new markets because it helps to develop. Massively outsourcing, produces huge trade deficits and basically only shifts money.
What currently happens is following development, currently everybody thinks that companies can produce cheaply and sell expensive here. That only works as long as people have money. The long term trend goes towards crash of the monetary system in the west, or at least in the US, with trade deficits which are enourmous. The classical example of this was Argentina in the nineties, basically a classical example of a country which did not produce anything inshore but imported everything. The crash was imminent, and came around 2000-2001.
What currently happens is that some people thing a patent system which basically acts as a highway robbers tool might help. This might delay things but only for a certain period of time. Once the production is gone entirely, the research also will follow and with it the so called IP holders (which shift overtime, since patents run out), unless the current patent system crumbels under its own weight, because of the massive abuse which is currently happening before.
So what would be the solution. Simple, try to keep certain core industries and research in the country, and do moderate outsourcing which opens the doors for the wealth of everybody. But for heavens sake, keep some industries and research in the country or at least in the monetary zone.
Re:Easy answer (Score:2, Insightful)
Not so simple, I suspect. Who do you stop from outsourcing? Specific industries or govt. departments only? By amount? Since the bulk of IT growth in the last couple of years in the UK has been from govt. IT contracts, I can't see the govt. deciding
Good for business, bad for the people. (Score:2)
Re:Good for business, bad for the people. (Score:2)
This kind of thinking is crap. It might have been true 20 or 30 years ago, but it isn't true anymore. Just because money is flowing into a corporate entity doesn't mean its automatically going ANYWHERE, let alone to citizens and workers that desprately need it to survive.
I wonder if they are considering the worst part (Score:4, Interesting)
After all, how often does the federal government do anything to protect small businesses or individuals from being destroyed by large businesses?
They are more likely to protect the big businesses from being mistreated by small businesses.
For example, the whole patent system is nothing but protection of big business from small businesses and individuals.
When it comes time for important contracts, who gets the contracts, the big business or the small business? From what I see, it doesn't matter at all if the small business has much greater expertise in the matter.
So if the big business can make money by moving some activities overseas, everything is just fine with Congress.
As long as the big corporations and those corporations with friends in Congress make tons of money, nothing else matters.
Of course, there is a bigger issue that everyone ignores.
When we export jobs, we are exporting vital expertise. After those who used to do the work are no longer up to date, we lose the ability to do the work ourselves. We're not there with software development and it will take a while, but it is forseeable that at some point we won't have the expertise we need to handle emergencies.
So what happens when China declares war against us 40 or 50 years from now? What do we do after they cut off our access to the exepertise we will need to win the war?
Include all the manufacturing that we no longer have the capability of doing without a long lead-time, and we're going to be in serious trouble.
Our chances of prevailing against China will be about like Poland's chances against Germany in the early days of World War II.
It looks to me like we're well on our way to losing the next WOrld War.
Re:I wonder if they are considering the worst part (Score:3, Funny)
Re:I wonder if they are considering the worst part (Score:3, Insightful)
And you just hit upon the cause of 95% of the problems in the U.S. today.
The U.S. essentially has a ruling class. Elections won't change a thing because the U.S. Corps. have bought off both sides.
The only way to fix it is to throw the Corporate influence out of government... good luck trying to do it.
Re:I wonder if they are considering the worst part (Score:2)
War against Amerika (Score:3, Insightful)
Why should they want to invade, if all knowledge has left the USA because of heavy outsourcing and all that is left are a few hundred million people whose major skill is to ask if one want fries with the order?
Seriously, that is one of the most ridiculous arguments I heard against outsourcing. Brain-drain and loss of skill are serious problems, but before worrying about chinese supertanks and missiles, one should be concerned abou
hypocritical (Score:5, Insightful)
Then, when they actually do, and start reaping some rewards from it, you start acting like it's the second coming of antichrist.
So what do you suggest? Stop outsourcing, stop manufacturing abroad? Are you also then prepared to accept the trade retaliations from the rest of the world? Some people applauded your steel tariffs as something good. Of course, the US ended up losing a lot more money - and more jobs - total than it saved in that particular sector by postponing an inevitable restructuring.
Outsource "IT"? Obvious Answer.... (Score:2, Insightful)
If the question or design is simple then it is simply begs for a commodity-based result -- an answer or drawing. This is not to say that the people working on these problems are simple, it's just an issue of language, culture, and time-zone barriers.
America and the UK have proven themselves to be at the forefront of technology -- constantly improving on older developments; driving in directions yet unforseen. This happens daily, and in every secto
Pay for an independent study...? (Score:4, Interesting)
Call me naive, but surely there's no such thing as an independent study? After all, someone's paying for it and usually the someone who's paying for it has already got an opinion. I've yet to see an "independent study" which didn't favour the organisation paying for it.
Economists look at half the picture (Score:2, Interesting)
However, economics, and particularly the classicial sort of economics, is not very good at sorting out what happens to the distribution of income within each economy. And, as several posters have pointed out,
hmm.. (Score:5, Interesting)
More to the issue, I'm not sure what decides the level of outsourcing - "some", "moderate" or "massive". Even when offshoring wasn't happening, a lot of companies prefered "outsourcing" - subcontracting their IT needs and business to specialist companies who had the skills and knowledge to fulfill them, leaving the parent organization free from the usual worries of delivery, quality, acceptance etc. So if the same happens now, it's bad? Because there is growing fear of losing jobs? Surely, the involved professionals would be smart enough to know that economics drives a business, not preferences!
Further, if the products of US-based companies are used/consumed by people elsewhere, from the (less) money earned from US companies, surely the profits are going back to USA. So the article gave an example of Nike. I'm sure more parallels can be drawn without stretching the imagination too far!
Finally, if the cost of building a product, be it software, is relatively less (and so is the cost of maintaining it), then the cost of direct users/consumers would be much lesser. Say, if the Air-traffic control systems cost less to build and operate, it would lead to less fees towards airlines, which means they can cut costs further and offer cheaper tickets.
And contrary to what another poster mentioned, yes, the corporates may follow the skills, but why would they distance themselves from consumers? They have nothing to gain there, if there is a growing resentment against their products/services. And if they decide to not pursue offshoring, they stand to lose considerable market share simply due to the cost-benefits offered by the competitors. So, from their perspective, its a downward spiral.
Outsourcing is happening. Live with it. Some jobs are going elsewhere. Sure. Are those the best jobs? Surely, it gives the professionals in the developed world better jobs (creative as compared to monotonous, boring, trivial).
Maybe this brouhaha is there because IT professionals have a bigger mouthpiece, and a cheaper and far easier means of voicing their concerns.
Re:hmm.. (Score:3, Interesting)
Japan does not manufacture for the US, Japan manufactures for Japan and sells to the US. That is a major difference.
Re:hmm.. (Score:2)
That is both myopic and naive. Guess what, as much as all the economists in the world like to tell you they know what will happen and they know what is good for the economy, they don't really know, and are just guessing. The only thing is if they tell you they are guessing, they would be out of a job.
Economics is a science, but it is probably
It is good, but for none of the reasons stated (Score:4, Interesting)
Think about it, on balance the really enormous social result of the various industrial revolutions that took place in and around the nineteenth century was the end of slavery. Slavery ended because it could, not because it should. This is true with so many things that are attributed to good will and heroic characters. That's all mythology.
This struck me the other day when someone was talking in a wide-eyed manner about all the things that would have to be done manually without industrial and agriculural machinery. The person kept using the pronoun "you" saying "you would have to do this by hand and you would have to do that by hand." I spoke up and said, no actually a slave would most likely have done most of the things you're referring to before the age of machinery.
So, if machinery and centralized power ended slavery, then IT probably will end work as we know it and this offshoring issue is really symptomatic of a huge evolution in society that is just beginning. And, of course, in the beginning the resistance will be enormous and it will still be here hundreds of years from now. In evidence I would introduce, among others, the confederate flag issue in the American South.
There is an entire world out there (Score:5, Insightful)
Oh but we will (Score:5, Insightful)
Problem...not everyone can live like the US...if they do...then we all die. There aren't enough resources to go around. 6 billion plus people all can't drive cadilacs. Not that we shouldn't raise the standard of living...but we need population control before that becomes a universal option.
Some people live in the desert and complain that there's no rain
Re:There is an entire world out there (Score:3, Interesting)
Off the top of my head? Ireland. Greece. Spain. Portugal. Italy. All largely peasant, subsistence economies at the start of the 20th century. These countries that have suffered dictatorship, revolution, and/or civil war during the last hundred years but are now stable, prosperous democracies.
Next question?
A basic fallacy... (Score:3, Interesting)
An action or transaction that results in monetary gain for the US cannot be construed as 'good'. Hardly anything innovative happens in the US that is of importance for the rest of the world. In fact the US has lagged behind in things like cellphones and bandwidth. And within the US, the patents system seems so messed up, true innovators can hardly be expected to stay motivated.
Money, like blood, needs to circulate. If it accumulates in just one place, it can lead to a heart attack.
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Globalization only works... (Score:5, Interesting)
1. Free trade of goods. Almost done. Shipping goods from country A to country B is cheap (even if some tariffs are applied).
2. Free movement of workforce. Countries all over the world have a limitation on this. You just can't go to work in an other country. Even in the EU it is not easy (lot of paperwork) to do so. Also, language and cultural differences make a person reluctant to move.
3. Free trade of knowledge. Patents and copyrights restrict the sharing of knowlegde. They should be eliminated entirely.
Big businesses want point 1 to be realized, but do not want point 2 and 3. Until point 2 and 3 become true, outsourcing is most probably bad for everyone.
Re:Globalization only works... (Score:4, Interesting)
As a regular guy I don't have the same choices. I can't decide to send my dry cleaning to Indonesia because it's cheaper. I only have local choices to buy things like milk and gas and those prices are all similiar and regionally based. And, as you mentioned, I don't have global choice as to where I can live and work... I am limited by laws that protect the jobs of citizens (present in all countries but no longer enforced in the USA... face it). Then you have the corps that DO have all these choices... especially when it comes to labor and raw materials.
So the economy is split. You essentially have a lower and an upper class.
Re:Globalization only works... (Score:3, Insightful)
2. Movement of employees - First off, it's very easy in the EU. There's almost no additional paperwork as compared to hiring a national. There are some problems with recognition of qualifications and social security but these can generally be sorted out. Companies REALLY want freedom of movement because it allows cheap laborers to move to domestic factories and qualified management to move abroad to run new factories/outlets.
3. Patents and copyright - patents are ope
Re:Globalization only works... (Score:2)
I have tried to work in the EU... believe me it's damn near impossible. They protect the jobs from their member countries FIRST which is logical. Every country has these laws, but thanks to dominance of our friend the American Corporation they are basically no longer enforced here. With "friend
Re:Globalization only works... (Score:2)
You are right, I made a mistake. I should write that the State itself does not want its taxpayers to go to a foreign country.
On point 3:
You are right about the original intentions behind the creating of the patent system. However, the patent system is widely abused nowadays. Applications are so vaguely described that even those in the profession cannot comprehend them.
About companies keeping their inventions secret, you imply that knowledge is scarce. This is not the case, knowledge is
Not just IEEE (Score:2)
I sat with other Washtech [washtech.org] members and tried to beat it in Jay Insley's head (democrat from Boeing, err Everet) that outsourcing was an area of concern, as well as H-1 and L-1 visas.
He tried to tell us that India would buy enough Boeing airplanes (he's head of some India Caucus or something other) and that H-1 visas were needed to help get unique talent like 7' tall Chinese basketball players.
After an hour of listening to us, something m
a new way for trade? (Score:2)
Hmm, I guess the trade deficit must be at an all time low [bbc.co.uk] then.
Yeah... (Score:2)
Now if you're a shareholder of Nike, then it may help you that Indian programmers are wearing Nikes. If you're the CEO of Nike it sure as hell is going to help you.
If you work in a Nike factory overseas it may well help you. But Indian programmers wearing Nikes aint going to help you when you're working in a McJob wishing you could afford to buy a pair of Nikes for your kid.
Never confuse what's good for large corporate shareholders wi
It's really going to be a vicious cycle.. (Score:2, Funny)
First, corporations outsource, and locals loss jobs/move to poorly salaried jobs.
They will have less spending power, and hence only able to afford cheap china branded imports etc.
Local businesses still employing expensive americans in manufacturing etc feels the heat since they just can't compete, so either they will go bust or outsource too.
More jobless.
The cycle continues.
Finally, one fine day China can just openly declare "we are going to take over Taiw
Here's and idea... (Score:2)
Protectionism (Score:3, Insightful)
Actually the west is moving away from free markets, just as the rest of the world has been perusaded to move towards them, so this is no surprise (examples patent and copyright laws deisgned to protet existing industry stuctures for fear of job losses, high regulatory burdens which criplle start-ups and small firms, heavy government subsidies for certain industries)
Outsourcing will fail or succeed where it should (Score:3, Insightful)
Programmers who are handed a function spec and expected to return with a function can be outsourced.
Creativity cannot be outsourced effectively. It lives where it lives. There may be creativity in the other country, but that's not outsourcing.
Most outsourced IT fails not due to the failure of the outsource employees, but due to the failure of the inside company project managers. As any consultant can tell you, the vast majority of people who think they know how to manage a project clearly do not. As a result, what gets sent overseas are poorly thought out specifications that don't properly describe the process the project manager intended, which itself never matached the user's need.
When I sit in a meeting with a project manager and an end-user constituency representative, 90% of the time I spend is reconcilliation of the ideas from both -- when they are quite sure they'd already done this "in the spec"
As long as there are bad specs and bad managers to watch over them, there will be jobs for local people with the chops to turn those into functional code.
-AP
Your guide to "The Churn" (Score:3, Insightful)
Offshoring by definition can't be good (Score:5, Insightful)
These megacorps want to get away without paying US wages, while at the same time, being dependent on a US consumer-supported MARKET to sustain their product.
Dell and HP, for example, aren't selling their expensive services and products to India. They are selling them to the USA and Europe.
Therefore, outsourcers depend on EVERYONE ELSE NOT outsourcing middle-class jobs, or else their market will ultimately collapse.
It's not just the corps that are betraying the American worker. Corporations will do anything allowed by law to make a buck. I don't have a problem with that, if business didn't make money, NONE of us would have jobs.
The traitor here is our government which does NOTHING to stop this practice, nor to even discourage it. Both parties are responsible. Both parties are beholden to the corps.
John Kerry gave some lip service to stopping outsourcing, but when you look at where his fortune comes from (his wife), mainly from OFFSHORING Heinz plants, one must wonder how serious he is about it.
The problem of outsourcing, like the IP cartels (MPAA/RIAA) are enemies that we can't vote out of power because BOTH parties are under their spell.
My solution to outsourcing is very simple.
Give all American businesses a tax credit equal to the salaries of all American citizens they employ inside the USA, minus the salary of all non-US citizens employed outside the USA.
This will allow outsourcers to play by the existing rules, while giving businesses who employ Americans a tax advantage over them.
There really won't be a loss in tax revenue, as all corporate taxes are illusory (all taxes get passed on to the customer), and it will help it, as it will encourage employers to employ more people and to pay higher wages.
Re:I'm confused (Score:3, Insightful)
Though maybe Clinton is unique in being able to accomplish this... he always seems to be able to get away with breaking the rules.
Re:I'm confused (Score:2, Funny)
Obviously you must be thinking about a different bush! Our current presendent does not consider IT workers part of the working class, they are IT workers.
Watch President Bush school us on stupid things such as Sovereignty [about.com]
Re:I'm confused (Score:3, Insightful)
I'm sure he did promise jobs.. what the government here does is promise jobs too. Except the jobs that ended were high paying middle class jobs, and the jobs that are arriving are $8-12/hr callcenter positions.
Now, I don't know about you, but I don't know too many little kids that go around saying t
Re:I'm confused (Score:2)
I'm sure he did promise jobs.. what the government here does is promise jobs too. Except the jobs that ended were high paying middle class jobs, and the jobs that are arriving are $8-12/hr callcenter positions.
By counting call center support jobs as "tech" jobs, North Dakota can state it has a booming tech industry.
Oddly enough, there is a huge problem with college graduates leaving the state.
PS: Election issues this year seem to be concentrating on a heterosexual-only marriage amendment to the
Re:I'm confused (Score:4, Insightful)
Bush's REAL consitutancy is the corporate class. Look at his decisions over the past 3 1/2 years and almost ALL of them directly benifit the corporate class. The rest of them benift pals in the radical religious right.
Because you like most geeks don't know shit. (Score:5, Insightful)
The primary job creation engine of the economy is the small businessman (or woman). Big corporations get the headlines because they usually affect people in larger numbers at one time. However their numbers are really not that meaningful when you look at the number of people employed in this country. There are 138 MILLION people working in the US.
How many jobs were outsourced? Now, looking back on history shouldn't we consider the 70s the age of outsourcing automobile workers? The 80s textile workers?
As for the job creation. The capital gains tax cuts and similar equalizing of the percentage of income tax benefit the small business greatly. I know, I have four relatives with small businesses who have grosses from as low as 500k to nearly 5 million. Guess what, they have more money and they did exactly what was expected, they hired to grow even bigger.
Now what will stop this? Simple, raising the taxes on the "evil rich". Sorry, the proposed plans will smack down more small businesses than anyone. The ones with the millions and billions have relatively no income and have the means to dodge nearly most forms of taxes.
In the end the only proper way to deal with taxation is by consumption. The rich consume in a very big fashion and the fairtax will accomplish that. http://www.fairtax.org
You are very confused about that. (Score:3, Interesting)
"How many jobs were outsourced? Now, looking back on history shouldn't we consider the 70s the age of outsourcing automobile workers? The 80s textile workers?"
YES! But this has been discussed before. Talk to people in the "rust belt" now.
"As for the job creation. The capital gains tax cuts and similar equalizing of the percentage of income tax benefit the small business greatly."
How? Most small businesses do NOT see much benefit from capital gains
American Citizens OWN America (Score:3, Insightful)
It is a government for the people and by the people, according to the constitution.