Dems on outsourcing

[WhipperSnapper]

Originally posted by: HombrePequeno
On outsourcing...well I don't see any reason against it. I'm fine with giving a Chinese worker a job because that person in China is just as deserving of a job as an American that wants to get paid 3 times as much. The best way to help out poorer countries is by allowing them to have jobs, not by throwing a bunch of free/cheap food at them. Obviously we can't compete in the manufacturing sector with a country that's average wage is 1/5 of ours. We need to chalk manufacturing up as a loss simply because it's not going to be good for us in the long-run to try to keep it afloat by putting up a bunch of barriers to protect it. There will always be a market for actual American made products which means there will always be some manufacturing that will be needed. However, we need to promote education so that we can compete in the skilled labor market. We need to start pushing for people to get science degrees instead of things like Communications and Sociology.

Don't you have a sense of rational economic selfish interest? Do you see how it might be in your selfish interest that your relatives, friends, and neighbors not suffer poverty and a poor job market?

As for getting science degrees--ROFL! America already has a very large oversupply of scientists, and this is coming from a guy with an MS in chemistry. We have a huge number of severely underemployed Ph.D.'s in the sciences called postdoctorates. That's right--we have an OVERSUPPLY of scientists! (In the trenches of science, people sometimes refer to the notion you bought into, the notion that we need more scientists as "The Myth".) So, after spending 4 years getting you bachelor's and 5 (more likely 6) years getting your Ph.D. your reward is...not middle class prosperity, job security, and status, but...you get to work a gypsy scientist position called a postdoctorate. You'll have a 2 or 3 year position with little job security and often no benefits that requires you to work about 65 hours a week for perhaps $30,000. Woohoo! (In the meantime, as you're working on your postdoc, at least during better economic tmes, your friends who went to medical school or graduated in other fields will (would) be using funny words like 401K, IRA, mortgage, SUV, planning for retirement, Carribean vacation, etc.) Shortage of scientists? Tell that to the postdocs!

 

[WhipperSnapper]

Originally posted by: HombrePequeno

The fact is that there is huge demand for technical jobs now and Americans obviously aren't filling the void. There are tons of immigrants getting degrees in the fields of engineering and science related fields and these could be filled by Americans if we promoted them a little better.

Do you really think Americans are that insensitive to supply and demand? The education establishment has been bending over backwards for decades to promote science as a career.

If Americans are fleeing the sciences and engineering it isn't because they don't want to work as scientists and engineers, but rather because they don't perceive that they'll find appropriate work as scientists and engineers--at least not for solid middle class wages. If we stopped taking in immigrants and stopped importing foreigners on H-1B and L-1 visas and did what we could to combat outsourcing in this area, then perhaps Americans would be interested in those fields again.

How about the computer job market? Tens of thousands of Americans were laid off as their jobs were offshored. The end result has been a justifiable decrease in computer science enrollments.

Even if this doesn't help, eventually the average incomes of these coutries will raise to where it isn't as profitable to move the jobs overseas.

"In the end, we are all dead." Yeah--eventually the average income in China and India (population of about 2.4 billion people combined, mostly impoverished) might rise to current American middle class standards, but how long will that take? It will probably take over 100 years if it happens at all. That's nice, but it doesn't do you any good if you're going to spend the bulk of your adult life living in the next 50 years.

Zebo: Thanks for the mature response. Anyway, our economy is what, 85% service oriented jobs? Our economy has been moving away from manufacturing since the 1970s and it will continue to do so. Our economy seems to be doing fine right now and has been growing for the past 30 years so I see no reason to worry about further allowing our manufacturing sector to shrink.

If the economy is fine then why hasn't employment growth kept pace with population growth? Why haven't the supplies of middle class and upper middle class college-education-requiring jobs kept pace with the population growth? (If you look beneath the Bureau of Labor Statistics stats, the majority of the new jobs don't require any college education and are lower class jobs, many of which are presumably being taken by illegals.) If our economy is fine then why does our federal government continue to have a budget deficit and why has our trade deficit increased dramatically every year for the past number of years?

It's possible that the nation is in the "peak" of the economic cycle right now, masking the overall downward trend. It will get ugly when the next recession hits. Then we'll really get to see the state of our hollow debt-driven economy unmasked.

 

[Zebo]

Zebo: Thanks for the mature response. Anyway, our economy is what, 85% service oriented jobs? Our economy has been moving away from manufacturing since the 1970s and it will continue to do so. Our economy seems to be doing fine right now and has been growing for the past 30 years so I see no reason to worry about further allowing our manufacturing sector to shrink.

Not true. America makes lots of stuff still thank god. From high value added pharmacuticals to construction. From weapons systems to the auto industry which 1/6th of american jobs are associated with. All pay relativly high, even construction which is mainly filled with unskilled labor compared to unskilled sevice jobs. Where I live people want to work for Lockheed or Ratheon not Walmart or wash cars. Then there are quasi-maufacturig jobs such as auto body guys. Higher paid service jobs for the most part are to service a manufacturing endevor excluding medical professionals or government wonks such as MBA's F&I guys, accountants, designers etc. Manufacturing is by no means dead but it's not keeping pace with what we consume.

Interesting you pick the last 30...The past 30 years has been very bad for most americans (just look at the gini index) as manufacturing has not kept pace with our appitite we have gotten record levels of consumer debt which any depression would leave most americans homeless, car less w/o a pot to piss in as the banks come to collect. And form being the worlds creditor to the worlds debitor as foriegners buy our assets (companies and land) for the instruments of debt they don't buy. Wealth has become more concentrated than ever before which is the prime charachteristic of third world nations. Mexico etc has several billionaires while the rest of thier nation is myrid in poverty. This is not by accident and we are headed the same direction. I've been to several third world counties including the philippines and Mexico and honestly I've seen poverty in the united states which rivials them. Many areas in the country are unsafe to even go in and homeless everywhere. I never seen a homeless guy in the 70s or 80's, now they are everywhere even rich cities like San Clemente or Newport.

 

[Zebo]

"In the end, we are all dead." Yeah--eventually the average income in China and India (population of about 2.4 billion people combined, mostly impoverished) might rise to current American middle class standards, but how long will that take? It will probably take over 100 years if it happens at all. That's nice, but it doesn't do you any good if you're going to spend the bulk of your adult life living in the next 50 years.

lol. If it were only that simple I still would'nt wait 100 yrs I suprised most buy into this just based on that premise. Not to mention it will be a cold day in hell for a chinaman ever buys a US product with the nationalism they've fermented to keep thier people in line.

But it's much worse than that...In reality resources are limited which means as they rise with he trinkets they sell us we have no choice but to accept less. oil prices you see now. What you don't see is mineral pricing...America is blessed with having awesome resources but in global economy that means less since anyone is free to deplete them on the open market. Those who have wealth will get first access. As should be apparent by now Americans wealth is going down the crapper where weekly companies get bought when congress is'nt stopping it and record consumer and govermental debt.

 

[Zebo]

Originally posted by: WhipperSnapper

Originally posted by: HombrePequeno
On outsourcing...well I don't see any reason against it. I'm fine with giving a Chinese worker a job because that person in China is just as deserving of a job as an American that wants to get paid 3 times as much. The best way to help out poorer countries is by allowing them to have jobs, not by throwing a bunch of free/cheap food at them. Obviously we can't compete in the manufacturing sector with a country that's average wage is 1/5 of ours. We need to chalk manufacturing up as a loss simply because it's not going to be good for us in the long-run to try to keep it afloat by putting up a bunch of barriers to protect it. There will always be a market for actual American made products which means there will always be some manufacturing that will be needed. However, we need to promote education so that we can compete in the skilled labor market. We need to start pushing for people to get science degrees instead of things like Communications and Sociology.

Don't you have a sense of rational economic selfish interest? Do you see how it might be in your selfish interest that your relatives, friends, and neighbors not suffer poverty and a poor job market?
!

No they are clueless to the symbiotic relationship. It's like playing chess with a 10 year old, one move at a time you must walk them though showing relationships along the way explaining cause and effect.

Slavish devotion for free-trade did'nt come easy as companies and thier bankrolled "think-tanks" haves spent trillions to cultivate it and it won't leave easy I'm afriad.

 

[homercles337]

Originally posted by: HBalzer
This is true and I?m not saying take away Healthcare but the unions have to except that Healthcare costs are rising and they will have to pay a higher percentage. They also have to except that pension plans are generally a thing of the past. You can?t blame or punish businesses for doing smart business or America won?t just loose some jobs to outsourcing it will loose whole companies.

You just dont get it. No more pensions and companies load down their workers by forcing them to pay for their healthcare. This forces the workers into an even lower income bracket than had. Companies that practice this model should die anyway.

Not wanting to be the grammar/spelling nazi, but its accept, not except. These types of mistakes are acceptable when english is your second language, but in your case im sure its not.

 

[homercles337]

Originally posted by: WhipperSnapper

Originally posted by: Aisengard

Currently, Americans require a higher wage than the rest of the world simply because the standard of living here in America is that much higher than the rest of the world. I don't think you can blame companies for maximising their profit by getting the same productivity for a fraction of the cost overseas than what you'd get here in America.

Outsourcing is simply an adjustment of the American job market to the global one. This means that, yes, to get those higher wages you are going to have to earn them. Workers also need to adjust to the global job market in order to keep their wages, and convince the company that they are worth it. Unions help those workers keep their jobs (they hold companies morally accountable to their workers, gasp!), but there is only so much Unions are able to do. You gotta keep up your education for your whole life, or you're going to be left behind.

It's also an adjustment of the American standard of living. Even knowledge-based jobs are being outsourced, not merely factory jobs. Just about anything that isn't nailed down. Engineering work, science research, R&D, computer programming, financial analysis, architecture, animated cartoon drawing, legal work, interpretting the results of radiology tests, etc.

It's basically a merger of our economy with the billions of impoverished people in the third world, and the results will be predictable and unsurprising. Simple economic concepts (like supply of labor and demand for labor) dictate that the end result of a dramatic increase in the supply of labor (ie, 2.4 billion people) relative to a relatively static amount of demand for labor will decrease the price point (wages, standard of living). The result--the American middle class will be reduced to a third world standard of living.

It won't matter if you have five Ph.D.'s. (Heck, people with Ph.D.'s in science are working at 65 hours/week $30,000/year gypsy scientist positions called postdoctorates, often with no benefits.)

BTW--regarding education--what we are seeing today is an Education Arms Race. Everyone wants to go to college! In the past you could earn a secure middle class income with a bachelor's degree. Now everyone's getting masters degrees and professional degrees, etc. Sadly, education does not create jobs (except for people in the education fields). If the economy only offers knowledge-based jobs for 20% of the populace and 80% of the populace obtain bachelor's degrees in useful fields, it means that 60% of the populace will be overeducated and underemployed. In the meantime, the wages for the knowledge-based jobs will decrease because of the huge supply of people willing to work them.

I couldnt have said it better myself. I just accepted a job that required a bachelor's (master's preferred) and i have a phd and 3 years of postdoc experience. And the salary reflects this fact. You fools that think outsourcing is a good thing will see it bite you on the ass if you let this admin continue unabated.

 

[Fern]

Pelosi mentioned Democrats' opposition to outsourcing. She said Democrats will end tax subsidies for companies that send jobs overseas.

Can anyone provide a specific Internal Revenue Code section which provides a tax benefit for companies that outsourse?

I'm a CPA and I've never heard of it, except in statements by politicians. However, that's not to say it isn't in the Code somewhere, it is huge.

Nah, never nind. There is no such thing. After reading through many sites I see that it has to do with Foreign Tax Credit provisions. The purpose of which has nothing to do with rewarding companies for outsourcing jobs.

The FTC provisions are mostly unique to the US because of it's "piggishness" in tax theory. There are two theories employed by countries in the world taht have tax systems: (1) You tax income arising from within your borders or country, or (2) You tax the income earned by your citizens (or corporate entities) wherever they may be.

The US is the only country I know of that employes BOTH theories. All the European & Asian countries I have ever worked in employ only item 1.

So, if a US company does business overseas, the European country will claim, and have, a right to tax those porfits arising from within its borders. Because the US employees #2 above, it also claims tax on the income earned within the foreign country. Hence, the same $ of profit is taxed by two countries.

The FTC provsion allows US companies to NOT have double taxation. Which would kill them.

So, it's really a big stretch to say our tax laws give breaks to employers for outsourcing jobs, and mighty disingenuos as well. Take away the FTC (to eliminate this so-called tax break for outsourcing), and all you are doing is prohibiting US companies from doing business abroad. That would be monumentally stupid.

This drivel (bogus assertion that tax law rewards outsourcing) would go away if all countries employed the same tax rates. Or the US stopped taxing profits arising from outside its borders. But outsourcing will not diminish until all countries have the same labor costs. Good luck with that. Countries wage "war" with one another not only with militarily, but economically as well.

Fern

 

[Engineer]

Originally posted by: Fern

Pelosi mentioned Democrats' opposition to outsourcing. She said Democrats will end tax subsidies for companies that send jobs overseas.

Can anyone provide a specific Internal Revenue Code section which provides a tax benefit for companies that outsourse?

I'm a CPA and I've never heard of it, except in statements by politicians. However, that's not to say it isn't in the Code somewhere, it is huge.

Nah, never nind. There is no such thing. After reading through many sites I see that it has to do with Foreign Tax Credit provisions. The purpose of which has nothing to do with rewarding companies for outsourcing jobs.

The FTC provisions are mostly unique to the US because of it's "piggishness" in tax theory. There are two theories employed by countries in the world taht have tax systems: (1) You tax income arising from within your borders or country, or (2) You tax the income earned by your citizens (or corporate entities) wherever they may be.

The US is the only country I know of that employes BOTH theories. All the European & Asian countries I have ever worked in employ only item 1.

So, if a US company does business overseas, the European country will claim, and have, a right to tax those porfits arising from within its borders. Because the US employees #2 above, it also claims tax on the income earned within the foreign country. Hence, the same $ of profit is taxed by two countries.

The FTC provsion allows US companies to NOT have double taxation. Which would kill them.

So, it's really a big stretch to say our tax laws give breaks to employers for outsourcing jobs, and mighty disingenuos as well. Take away the FTC (to eliminate this so-called tax break for outsourcing), and all you are doing is prohibiting US companies from doing business abroad. That would be monumentally stupid.

This drivel (bogus assertion that tax law rewards outsourcing) would go away if all countries employed the same tax rates. Or the US stopped taxing profits arising from outside its borders. But outsourcing will not diminish until all countries have the same labor costs. Good luck with that. Countries wage "war" with one another not only with militarily, but economically as well.

Fern

I don't think she is saying that there are foreign tax credits, etc. I think she is saying that there are "domestic tax credits" for various corporate items and if you outsource, you will lose those domestic credits. At least that's how it looks to me.

 

[Fern]

Originally posted by: Engineer

Originally posted by: Jhhnn
The whole notion that unions are fueling outsourcing is absurd. Chinese and Indian workers get by on such low wages and benefits that even American minimum wage no benefits workers can't compete. Even well-educated professionals can't compete against their Indian counterparts in exportable jobs. Chinese consumer goods, for example, are often ridiculously cheap- so much so that American energy costs alone preclude competition against them...

The whole phenomenon is much more closely tied to the exchange rate, and to the extreme measures used to support the false high valuation of the dollar. So long as the Bush Admin and Repub congress are willing to finance the exportation of American jobs with tax cuts for the wealthy and tax breaks to outsourcers, the trend will continue. You can't open a new factory in China for free- it takes capital. And so long as they're willing to create huge federal deficits to soak up overseas dollars, the false high valuation of the dollar will continue to provide the incentive to outsource...

Not to mention that very low tax rates on huge incomes actively encourage looting and greed. With a properly progressive tax structure, the financial elite is faced with a choice- they can pay employees more, invest more in their companies, or pay more in taxes, because they can't keep it all. Under the current tax system, yes, they can virtually keep it all, paying only the 15% capital gains rate on huge incomes...

Yeh, sure, the value of the dollar will self-correct, eventually, but not in a gradual way. Current efforts to stretch things to the breaking point will accomplish exactly that...

I've been arguing the very points you make above to my coworkers for months. I agree 100% with your analysis.

$3.00 per day = middle class in India yet not even one hours worth of minimum wage in the US. Hard to compete with unfair wages....not to mention the failure of many of the countries (such as China) to drop tariffis on US made products when the US doesn't have the same tariffs (or none at all) on products from those countries.

Sorry to see you guys agree with above. Too many aspects are erroneous to a significant extent. Interesting analysis, but inaccurate.

With a properly progressive tax structure, the financial elite is faced with a choice- they can pay employees more,(1) invest more in their companies, or pay more in taxes, because they can't keep it all. Under the current tax system, yes, they can virtually keep it all, (2)paying only the 15% capital gains rate on huge incomes...

See #1 bolded above. His premise would be logical, except for the fact that "investing" more profits in the company will NOT yield tax benfits. Write-offs (i.e., deductions) for expenditures in equipment, AKA section 179, is not available to the large corporations of which you speak. It is a benefit only for small businesses. While depreciation of said equpment is available to them, it is often spread over such a long time period as to constitute a small benefit when taken in context of their operations. Even worse if were talking about investing in infrastructure. Biulding's are written-off (depreciated) over a period of 38.5 years. That's a longer period than the mortgages. So no, under the current system they "can't keep it all" as you have stated.

Any other type of "investment" you may be speaking of will only offer even less of a tax benefit than the depreciation I mentioned above.

See #2 above. Corporations don't pay 15%. People like you and your parents who buy & sell the stock of such corporations pay the 15%. Not the corporations themselves. The federal tax rate on these corporations is 35%. Then there's state, which varies, but 10% would be a reasonable average. Then there are the many "hidden taxes" non-tax professionals are unaware of. CPA organizations and economists place these as approximately equal to the combination of fed & state income taxes.

As far as the above claim taht "it's" tied to the falsely high exchange rate, well IMHO your missing "the forest for the trees". You're gonna see it under either Repub or Dem admins: Guys it's the bankers. If the value of the dollar were to fall as time progresses, who really takes in the "shorts", so to speak?

It's the bankers. Mortgages & loans customarily have the repayment schedule stated in "raw" dollar terms. If I made a loan last year, and can use "cheaper" dollars to repay it, I as the borrower get an advantage, the banker gets hosed. It gets prety complicated, but exchage rate support, like using interest rates to control inflation, are just "tools" used to protect bankers.

Furthermore, in the end, you'll find anything that puts an upward pressure on wage costs (or any domestic costs) will only fuel outsourcing.

Fern

 

[Fern]

Originally posted by: Cerb

Originally posted by: sumyungai
Dems want to raise the minimum wage, but wouldn't that cause inflation? If the minimum wage worker makes a higher minimum wage and prices rise, what does that solve?

No. The Federal Reserve causes inflation. Your money is a representation of debt, not something substantive.

The Federal Reserve is composed of "bankers". Bankers abhor inflation. When & if they "cause" inflation I guarandamtee its an accident/mistake.

Fern

 

[Fern]

Originally posted by: Engineer

Originally posted by: Fern

Pelosi mentioned Democrats' opposition to outsourcing. She said Democrats will end tax subsidies for companies that send jobs overseas.

Can anyone provide a specific Internal Revenue Code section which provides a tax benefit for companies that outsourse?

I'm a CPA and I've never heard of it, except in statements by politicians. However, that's not to say it isn't in the Code somewhere, it is huge.

Nah, never nind. There is no such thing. After reading through many sites I see that it has to do with Foreign Tax Credit provisions. The purpose of which has nothing to do with rewarding companies for outsourcing jobs.

The FTC provisions are mostly unique to the US because of it's "piggishness" in tax theory. There are two theories employed by countries in the world taht have tax systems: (1) You tax income arising from within your borders or country, or (2) You tax the income earned by your citizens (or corporate entities) wherever they may be.

The US is the only country I know of that employes BOTH theories. All the European & Asian countries I have ever worked in employ only item 1.

So, if a US company does business overseas, the European country will claim, and have, a right to tax those porfits arising from within its borders. Because the US employees #2 above, it also claims tax on the income earned within the foreign country. Hence, the same $ of profit is taxed by two countries.

The FTC provsion allows US companies to NOT have double taxation. Which would kill them.

So, it's really a big stretch to say our tax laws give breaks to employers for outsourcing jobs, and mighty disingenuos as well. Take away the FTC (to eliminate this so-called tax break for outsourcing), and all you are doing is prohibiting US companies from doing business abroad. That would be monumentally stupid.

This drivel (bogus assertion that tax law rewards outsourcing) would go away if all countries employed the same tax rates. Or the US stopped taxing profits arising from outside its borders. But outsourcing will not diminish until all countries have the same labor costs. Good luck with that. Countries wage "war" with one another not only with militarily, but economically as well.

Fern

I don't think she is saying that there are foreign tax credits, etc. I think she is saying that there are "domestic tax credits" for various corporate items and if you outsource, you will lose those domestic credits. At least that's how it looks to me.

I'll try again. She is saying that there are Tax breaks for companies which outsource. I'm saying she's talking about FTC's, she's not saying that, she's talking FUD

I have seen this oft repeated, yet have never actually seen such a thing in tax law.

EVERY website I searched for such a tax break spoke of the same thing - Foreign Tax Credits.

If I'm correct in that's what she, and others who make this claim, are talking about. My above remarks stand.

If someone wants to assert that it's not about FTC's, please provide a link, or even better, name the code provision authorizing a tax break for outsourcing.

Mixing politics and accounting/tax is just as bad as mixing politics with science or religion.

Fern