Outsource? Of Course

[charrison]

linkage

Just before Christmas, workers at IBM got an early lump of coal in their stockings. The company announced plans to ship some 5,000 software-programming jobs to India. Although the trend toward outsourcing or offshoring has been going on for some time, the IBM announcement got people's attention. New York Times columnist Bob Herbert complained that globalization is now forcing white-collar service workers to follow "the well-trodden path of their factory brethren to lower-wage work, or the unemployment line."

Ironically, much of the move toward offshoring is the result of ill-considered efforts to keep software jobs in the U.S. Previously, companies had brought Indian programmers to this country to do their work under a program established in 1990. It provided these foreign workers with H-1B visas that allowed them to work here temporarily. But under pressure to save such jobs for the native-born, the number of visas allowed under this program was reduced from 195,000 to 65,000 in October.

So now, instead of having Indian workers come here, where they spent much of their earnings, companies are contracting with them to work in India, which is where they now spend their earnings. Rather than admit that they were wrong in the first place, the same people who demanded restrictions on foreign workers are trying to get new limits placed on outsourcing as well. A new report from the National Foundation for American Policy details this effort and the likely costs. These include higher taxes when laws are passed preventing state and local governments from utilizing cheaper foreign sources for information technology (IT) services.

...


A study by the McKinsey Global Institute found that workers freed up from routine tasks that have been outsourced are often redeployed within the company in projects generating greater value-added and jobs paying higher wages. It also found that companies engaging in outsourcing often established foreign subsidiaries that generate sales and profits for the home company. Adding it all up, McKinsey concluded that every $1 outsourced led to a gain for the U.S. as a whole of $1.12 to $1.14. The country where the outsourcing takes place captures just 33 cents of the total gain from outsourcing.

Another interesting article on outsourcing...

 

[ReiAyanami]

well if tech workers would just unionize, they could get $2 for every $1...!!

 

[zephyrprime]

This article is malarky. The number of IT jobs has shrunk by 12% since 2000 so why would there be any need to import more programmers? There's simply no demand. And how would an imported programmer, which still cost $50K compete with offshore programmers which cost $10K?

The article says that the loss of their former jobs allows for programmers to move up the value ladder. This is certainly true for some programmers but the vast majority are simply laid off. Why doesn't the aticle mention that?

There are only ~500,000 programmers in the United States so 65,000 allowed imports is a huge number. It's enough to turn over the entire population of programmers in only 7.7 years.

needed reform in the h1b visa

 

[dmcowen674]

Originally posted by: charrison
linkage

Just before Christmas, workers at IBM got an early lump of coal in their stockings. The company announced plans to ship some 5,000 software-programming jobs to India. Although the trend toward outsourcing or offshoring has been going on for some time, the IBM announcement got people's attention. New York Times columnist Bob Herbert complained that globalization is now forcing white-collar service workers to follow "the well-trodden path of their factory brethren to lower-wage work, or the unemployment line."

Ironically, much of the move toward offshoring is the result of ill-considered efforts to keep software jobs in the U.S. Previously, companies had brought Indian programmers to this country to do their work under a program established in 1990. It provided these foreign workers with H-1B visas that allowed them to work here temporarily. But under pressure to save such jobs for the native-born, the number of visas allowed under this program was reduced from 195,000 to 65,000 in October.

So now, instead of having Indian workers come here, where they spent much of their earnings, companies are contracting with them to work in India, which is where they now spend their earnings. Rather than admit that they were wrong in the first place, the same people who demanded restrictions on foreign workers are trying to get new limits placed on outsourcing as well. A new report from the National Foundation for American Policy details this effort and the likely costs. These include higher taxes when laws are passed preventing state and local governments from utilizing cheaper foreign sources for information technology (IT) services.

...


A study by the McKinsey Global Institute found that workers freed up from routine tasks that have been outsourced are often redeployed within the company in projects generating greater value-added and jobs paying higher wages. It also found that companies engaging in outsourcing often established foreign subsidiaries that generate sales and profits for the home company. Adding it all up, McKinsey concluded that every $1 outsourced led to a gain for the U.S. as a whole of $1.12 to $1.14. The country where the outsourcing takes place captures just 33 cents of the total gain from outsourcing.

Another interesting article on outsourcing...

Interesting? Is that what you are calling it now, I thought you would call it "Thrilling" since you and CAD love it so much, afterall it's only the LOW paying UNSKILLED jobs being shipped overseas and they'll be replaced with even more jobs here at an even HIGHER wage.

 

[charrison]

Originally posted by: zephyrprime
This article is malarky. The number of IT jobs has shrunk by 12% since 2000 so why would there be any need to import more programmers? There's simply no demand. And how would an imported programmer, which still cost $50K compete with offshore programmers which cost $10K?

The article says that the loss of their former jobs allows for programmers to move up the value ladder. This is certainly true for some programmers but the vast majority are simply laid off. Why doesn't the aticle mention that?

Unemployment in the IT sector is still only about 5%.

 

[charrison]

Originally posted by: dmcowen674

Originally posted by: charrison
linkage

Just before Christmas, workers at IBM got an early lump of coal in their stockings. The company announced plans to ship some 5,000 software-programming jobs to India. Although the trend toward outsourcing or offshoring has been going on for some time, the IBM announcement got people's attention. New York Times columnist Bob Herbert complained that globalization is now forcing white-collar service workers to follow "the well-trodden path of their factory brethren to lower-wage work, or the unemployment line."

Ironically, much of the move toward offshoring is the result of ill-considered efforts to keep software jobs in the U.S. Previously, companies had brought Indian programmers to this country to do their work under a program established in 1990. It provided these foreign workers with H-1B visas that allowed them to work here temporarily. But under pressure to save such jobs for the native-born, the number of visas allowed under this program was reduced from 195,000 to 65,000 in October.

So now, instead of having Indian workers come here, where they spent much of their earnings, companies are contracting with them to work in India, which is where they now spend their earnings. Rather than admit that they were wrong in the first place, the same people who demanded restrictions on foreign workers are trying to get new limits placed on outsourcing as well. A new report from the National Foundation for American Policy details this effort and the likely costs. These include higher taxes when laws are passed preventing state and local governments from utilizing cheaper foreign sources for information technology (IT) services.

...


A study by the McKinsey Global Institute found that workers freed up from routine tasks that have been outsourced are often redeployed within the company in projects generating greater value-added and jobs paying higher wages. It also found that companies engaging in outsourcing often established foreign subsidiaries that generate sales and profits for the home company. Adding it all up, McKinsey concluded that every $1 outsourced led to a gain for the U.S. as a whole of $1.12 to $1.14. The country where the outsourcing takes place captures just 33 cents of the total gain from outsourcing.

Another interesting article on outsourcing...

Interesting? Is that what you are calling it now, I thought you would call it "Thrilling" since you and CAD love it so much, afterall it's only the LOW paying UNSKILLED jobs being shipped overseas and they'll be replaced with even more jobs here at an even HIGHER wage.

So if the report is true, do have a problem with outsourcing creating more wealth for Americans?

 

[sandorski]

Originally posted by: charrison

Originally posted by: dmcowen674

Originally posted by: charrison
linkage

Just before Christmas, workers at IBM got an early lump of coal in their stockings. The company announced plans to ship some 5,000 software-programming jobs to India. Although the trend toward outsourcing or offshoring has been going on for some time, the IBM announcement got people's attention. New York Times columnist Bob Herbert complained that globalization is now forcing white-collar service workers to follow "the well-trodden path of their factory brethren to lower-wage work, or the unemployment line."

Ironically, much of the move toward offshoring is the result of ill-considered efforts to keep software jobs in the U.S. Previously, companies had brought Indian programmers to this country to do their work under a program established in 1990. It provided these foreign workers with H-1B visas that allowed them to work here temporarily. But under pressure to save such jobs for the native-born, the number of visas allowed under this program was reduced from 195,000 to 65,000 in October.

So now, instead of having Indian workers come here, where they spent much of their earnings, companies are contracting with them to work in India, which is where they now spend their earnings. Rather than admit that they were wrong in the first place, the same people who demanded restrictions on foreign workers are trying to get new limits placed on outsourcing as well. A new report from the National Foundation for American Policy details this effort and the likely costs. These include higher taxes when laws are passed preventing state and local governments from utilizing cheaper foreign sources for information technology (IT) services.

...


A study by the McKinsey Global Institute found that workers freed up from routine tasks that have been outsourced are often redeployed within the company in projects generating greater value-added and jobs paying higher wages. It also found that companies engaging in outsourcing often established foreign subsidiaries that generate sales and profits for the home company. Adding it all up, McKinsey concluded that every $1 outsourced led to a gain for the U.S. as a whole of $1.12 to $1.14. The country where the outsourcing takes place captures just 33 cents of the total gain from outsourcing.

Another interesting article on outsourcing...

Interesting? Is that what you are calling it now, I thought you would call it "Thrilling" since you and CAD love it so much, afterall it's only the LOW paying UNSKILLED jobs being shipped overseas and they'll be replaced with even more jobs here at an even HIGHER wage.

So if the report is true, do have a problem with outsourcing creating more wealth for Americans?

How many Americans and which Americans? There certainly are benefits to Outsourcing, but they are at the expense of the Working/Middle Class.

 

[charrison]

Originally posted by: sandorski

Originally posted by: charrison

Originally posted by: dmcowen674

Originally posted by: charrison
linkage

Just before Christmas, workers at IBM got an early lump of coal in their stockings. The company announced plans to ship some 5,000 software-programming jobs to India. Although the trend toward outsourcing or offshoring has been going on for some time, the IBM announcement got people's attention. New York Times columnist Bob Herbert complained that globalization is now forcing white-collar service workers to follow "the well-trodden path of their factory brethren to lower-wage work, or the unemployment line."

Ironically, much of the move toward offshoring is the result of ill-considered efforts to keep software jobs in the U.S. Previously, companies had brought Indian programmers to this country to do their work under a program established in 1990. It provided these foreign workers with H-1B visas that allowed them to work here temporarily. But under pressure to save such jobs for the native-born, the number of visas allowed under this program was reduced from 195,000 to 65,000 in October.

So now, instead of having Indian workers come here, where they spent much of their earnings, companies are contracting with them to work in India, which is where they now spend their earnings. Rather than admit that they were wrong in the first place, the same people who demanded restrictions on foreign workers are trying to get new limits placed on outsourcing as well. A new report from the National Foundation for American Policy details this effort and the likely costs. These include higher taxes when laws are passed preventing state and local governments from utilizing cheaper foreign sources for information technology (IT) services.

...


A study by the McKinsey Global Institute found that workers freed up from routine tasks that have been outsourced are often redeployed within the company in projects generating greater value-added and jobs paying higher wages. It also found that companies engaging in outsourcing often established foreign subsidiaries that generate sales and profits for the home company. Adding it all up, McKinsey concluded that every $1 outsourced led to a gain for the U.S. as a whole of $1.12 to $1.14. The country where the outsourcing takes place captures just 33 cents of the total gain from outsourcing.

Another interesting article on outsourcing...

Interesting? Is that what you are calling it now, I thought you would call it "Thrilling" since you and CAD love it so much, afterall it's only the LOW paying UNSKILLED jobs being shipped overseas and they'll be replaced with even more jobs here at an even HIGHER wage.

So if the report is true, do have a problem with outsourcing creating more wealth for Americans?

How many Americans and which Americans? There certainly are benefits to Outsourcing, but they are at the expense of the Working/Middle Class.

Are they? If American workers are put in better positions because of outsource, I am not sure how we are hurt by this. It would be interesting to seee the full report this article talks about.

 

[Bowfinger]

Originally posted by: charrison

Originally posted by: zephyrprime
This article is malarky. The number of IT jobs has shrunk by 12% since 2000 so why would there be any need to import more programmers? There's simply no demand. And how would an imported programmer, which still cost $50K compete with offshore programmers which cost $10K?

The article says that the loss of their former jobs allows for programmers to move up the value ladder. This is certainly true for some programmers but the vast majority are simply laid off. Why doesn't the aticle mention that?

Unemployment in the IT sector is still only about 5%.

Your basis for this? I'd have to do some digging, but IIRC it's over double that -- NOT counting thousands of former IT professionals who have given up and switched careers just to make ends meet.

 

[Zebo]

Maybe we should start posting "globalization" theory from the UAW bow? That's about how serious I take this Un-peer-reviewed, corporate funded study, drawn by someone with zero credentials.


Geez guys consider the source.

 

[charrison]

Originally posted by: Bowfinger

Originally posted by: charrison

Originally posted by: zephyrprime
This article is malarky. The number of IT jobs has shrunk by 12% since 2000 so why would there be any need to import more programmers? There's simply no demand. And how would an imported programmer, which still cost $50K compete with offshore programmers which cost $10K?

The article says that the loss of their former jobs allows for programmers to move up the value ladder. This is certainly true for some programmers but the vast majority are simply laid off. Why doesn't the aticle mention that?

Unemployment in the IT sector is still only about 5%.

Your basis for this? I'd have to do some digging, but IIRC it's over double that -- NOT counting thousands of former IT professionals who have given up and switched careers just to make ends meet.

It was in an article I read last week. Cant seem to find the bookmark, will post it when I find it.

 

[Bowfinger]

Originally posted by: charrison

Originally posted by: dmcowen674

Originally posted by: charrison
linkage

Just before Christmas, workers at IBM got an early lump of coal in their stockings. The company announced plans to ship some 5,000 software-programming jobs to India. Although the trend toward outsourcing or offshoring has been going on for some time, the IBM announcement got people's attention. New York Times columnist Bob Herbert complained that globalization is now forcing white-collar service workers to follow "the well-trodden path of their factory brethren to lower-wage work, or the unemployment line."

Ironically, much of the move toward offshoring is the result of ill-considered efforts to keep software jobs in the U.S. Previously, companies had brought Indian programmers to this country to do their work under a program established in 1990. It provided these foreign workers with H-1B visas that allowed them to work here temporarily. But under pressure to save such jobs for the native-born, the number of visas allowed under this program was reduced from 195,000 to 65,000 in October.

So now, instead of having Indian workers come here, where they spent much of their earnings, companies are contracting with them to work in India, which is where they now spend their earnings. Rather than admit that they were wrong in the first place, the same people who demanded restrictions on foreign workers are trying to get new limits placed on outsourcing as well. A new report from the National Foundation for American Policy details this effort and the likely costs. These include higher taxes when laws are passed preventing state and local governments from utilizing cheaper foreign sources for information technology (IT) services.

...


A study by the McKinsey Global Institute found that workers freed up from routine tasks that have been outsourced are often redeployed within the company in projects generating greater value-added and jobs paying higher wages. It also found that companies engaging in outsourcing often established foreign subsidiaries that generate sales and profits for the home company. Adding it all up, McKinsey concluded that every $1 outsourced led to a gain for the U.S. as a whole of $1.12 to $1.14. The country where the outsourcing takes place captures just 33 cents of the total gain from outsourcing.

Another interesting article on outsourcing...

Interesting? Is that what you are calling it now, I thought you would call it "Thrilling" since you and CAD love it so much, afterall it's only the LOW paying UNSKILLED jobs being shipped overseas and they'll be replaced with even more jobs here at an even HIGHER wage.

So if the report is true, do have a problem with outsourcing creating more wealth for Americans?

Without the specifics of the report, one can only speculate. Its findings are contrary to what I'm reading about wholesale white collar outsourcing (other than increased wealth for investors). I suspect their study is based on small-scale outsourcing of narrow functions, e.g., Help Desk or web design, usually to consulting firms or groups like IBM Global Services. That's not quite the same as shipping a broad range of jobs overseas.

Re. outsourcing increasing wealth, McKinsey has a vested interest in reporting financial gains; it's good for their business. Nobody outsources to lose money (though I've seen studies showing outsourcing's savings are overstated at best; some companies, e.g., Dell, are pulling back after discovering some of the hidden costs).

Anyway, outsourcing is all about cheap labor. Cheap labor means companies, and therefore investors, get higher profits. If they can't get cheap labor domestically, they'll get it overseas. As discussed before, that's good for the wealthy, not so good for workers whose jobs disappear. If the economy is booming, these displaced workers will mostly find new jobs. If the economy isn't, they remain un- or under-employed. It's more difficult to build a booming economy when a significant percentage of your potential customers are strapped for cash.

IMO, of course.


Edit: typo

 

[dmcowen674]

"A study by the McKinsey Global Institute found that workers freed up from routine tasks that have been outsourced are often redeployed within the company in projects generating greater value-added and jobs paying higher wages. It also found that companies engaging in outsourcing often established foreign subsidiaries that generate sales and profits for the home company. Adding it all up, McKinsey concluded that every $1 outsourced led to a gain for the U.S. as a whole of $1.12 to $1.14. The country where the outsourcing takes place captures just 33 cents of the total gain from outsourcing."

"established foreign subsidiaries that generate sales and profits for the home company"

and who are the only ones beniffiting from this? The few greedy Corp SOB's at the top. This is a sorry lame a$$ attempt of trying to prove more trickle down Bullsh1t.

More CAD & Charrison rhetoric that wages are going up amd more jobs being created than lost.
Prove it, where is the jobs? What is the Pay?
If it's so true it should be so easy to show.

 

[alchemize]

Originally posted by: dmcowen674
"A study by the McKinsey Global Institute found that workers freed up from routine tasks that have been outsourced are often redeployed within the company in projects generating greater value-added and jobs paying higher wages. It also found that companies engaging in outsourcing often established foreign subsidiaries that generate sales and profits for the home company. Adding it all up, McKinsey concluded that every $1 outsourced led to a gain for the U.S. as a whole of $1.12 to $1.14. The country where the outsourcing takes place captures just 33 cents of the total gain from outsourcing."

"established foreign subsidiaries that generate sales and profits for the home company"

and who are the only ones beniffiting from this? The few greedy Corp SOB's at the top. This is a sorry lame a$$ attempt of trying to prove more trickle down Bullsh1t.

More CAD & Charrison rhetoric that wages are going up amd more jobs being created than lost.
Prove it, where is the jobs? What is the Pay?
If it's so true it should be so easy to show.

Yes yes, it is very bad for large corporations to show a profit. We saw that from the 90's. Why all they did was pile all their gold coins in a vault and then swim in them!

 

[LunarRay]

Originally posted by: dmcowen674
"A study by the McKinsey Global Institute found that workers freed up from routine tasks that have been outsourced are often redeployed within the company in projects generating greater value-added and jobs paying higher wages. It also found that companies engaging in outsourcing often established foreign subsidiaries that generate sales and profits for the home company. Adding it all up, McKinsey concluded that every $1 outsourced led to a gain for the U.S. as a whole of $1.12 to $1.14. The country where the outsourcing takes place captures just 33 cents of the total gain from outsourcing."

"established foreign subsidiaries that generate sales and profits for the home company"

and who are the only ones beniffiting from this? The few greedy Corp SOB's at the top. This is a sorry lame a$$ attempt of trying to prove more trickle down Bullsh1t.

More CAD & Charrison rhetoric that wages are going up amd more jobs being created than lost.
Prove it, where is the jobs? What is the Pay?
If it's so true it should be so easy to show.

DM,
My simple math suggests that if folks that lost their jobs to outsourcing are working in other parts of the company it would seem to suggest that if they didn't out source to where ever they would have created more jobs. They could have hired replacements for the folks they moved up.

 

[zephyrprime]

Unemployment in the IT sector is still only about 5%.

It's about ~6%. link. The reason it's not 12% (+2%) is because so many of the laid off went to work in other industries.

 

[dahunan]

Originally posted by: alchemize

Originally posted by: dmcowen674
"A study by the McKinsey Global Institute found that workers freed up from routine tasks that have been outsourced are often redeployed within the company in projects generating greater value-added and jobs paying higher wages. It also found that companies engaging in outsourcing often established foreign subsidiaries that generate sales and profits for the home company. Adding it all up, McKinsey concluded that every $1 outsourced led to a gain for the U.S. as a whole of $1.12 to $1.14. The country where the outsourcing takes place captures just 33 cents of the total gain from outsourcing."

"established foreign subsidiaries that generate sales and profits for the home company"

and who are the only ones beniffiting from this? The few greedy Corp SOB's at the top. This is a sorry lame a$$ attempt of trying to prove more trickle down Bullsh1t.

More CAD & Charrison rhetoric that wages are going up amd more jobs being created than lost.
Prove it, where is the jobs? What is the Pay?
If it's so true it should be so easy to show.

Yes yes, it is very bad for large corporations to show a profit. We saw that from the 90's. Why all they did was pile all their gold coins in a vault and then swim in them!

YES.. they SURE spend money wisely ...
WorldCom
Enron
Global Crossing
Conseco
K-Mart
United Airlines
Adelphia Communications

 

[dahunan]

Originally posted by: zephyrprime

Unemployment in the IT sector is still only about 5%.

It's about ~6%. link. The reason it's not 12% (+2%) is because so many of the laid off went to work in other industries.

How much lower are the average wages in the IT sector

How many more temps are hired instead of actual "employees"?

How many more hours does the average IT worker give in his/her salaried position?

 

[dmcowen674]

Originally posted by: dahunan

Originally posted by: alchemize

Originally posted by: dmcowen674
"A study by the McKinsey Global Institute found that workers freed up from routine tasks that have been outsourced are often redeployed within the company in projects generating greater value-added and jobs paying higher wages. It also found that companies engaging in outsourcing often established foreign subsidiaries that generate sales and profits for the home company. Adding it all up, McKinsey concluded that every $1 outsourced led to a gain for the U.S. as a whole of $1.12 to $1.14. The country where the outsourcing takes place captures just 33 cents of the total gain from outsourcing."

"established foreign subsidiaries that generate sales and profits for the home company"

and who are the only ones beniffiting from this? The few greedy Corp SOB's at the top. This is a sorry lame a$$ attempt of trying to prove more trickle down Bullsh1t.

More CAD & Charrison rhetoric that wages are going up amd more jobs being created than lost.
Prove it, where is the jobs? What is the Pay?
If it's so true it should be so easy to show.

Yes yes, it is very bad for large corporations to show a profit. We saw that from the 90's. Why all they did was pile all their gold coins in a vault and then swim in them!

YES.. they SURE spend money wisely ...
WorldCom
Enron
Global Crossing
Conseco
K-Mart
United Airlines
Adelphia Communications

Parmalat - Has a lot of operations in the U.S. too.

 

[zephyrprime]

K-Mart

K-Mart just got whipped by walmart. They didn't do anything bad (I believe).

 

[Bowfinger]

Originally posted by: zephyrprime

Unemployment in the IT sector is still only about 5%.

It's about ~6%. link. The reason it's not 12% (+2%) is because so many of the laid off went to work in other industries.

OK, my mistake charrison. I must have been thinking of the combined rate rather than just the unemployed. That's not as bad as I thought.