Outsourcing is bad for America....
- Thread starter chess9
- Start date
either way it is a moot point, no matter what penalties are placed on companies it is still far cheaper for them to outsource....evolve or die.
Hmm....If every job outsourced was removed from the "costs" column of their balance sheet by the tax code, I suspect they wouldn't be too eager to ship jobs overseas. But, there are other ways....
-Robert
-Robert
Heh, instead of just being able to write off the cost of the jobs (same as for American employees), as a side benefit by outsourcing companies can eliminate FICA and social security tax. Did I just come up with the solution to the social security & medicare budget?
How so fair Bozack? Evolve as in 'work for pennies' or evolve as in 'Magically multiply our brain matter size until paying $8/hour abroad is no longer attrative'?
what bothers me is that companies here are willing to outsource a bunch of jobs just to save 10-20%. perhaps eventually india's income will rise to eliminate the cost advantage (doubt it). but india's growth rate now has overlapped china (10.4% vs china's blazing 9%). now the two most populous countries are growing 30% GDP in the next 3 years alone.
You are less cynical than I am. I think in many cases the outsourcing may actually COST MORE than doing things in-house, it is done because it is the "in" thing to do.
While I personally am not fond of outsourcing and agree with the author, Robert Reich, the former Labor Secretary under Clinton, seems to think it is OK.
Well well well, a Professor coming out and saying what I have been saying here ad nausium for how long now?
"Cost reductions and other benefits provide a strong incentive to outsource jobs. A company that decides to move its production overseas cuts its costs in many ways, including the following:
Extremely low wage rates
The circumvention or avoidance of organized labor
No Social Security or Medicare benefit payments
No federal or state unemployment tax
No health benefits for workers
No child labor laws
No OSHA or EPA costs or restrictions
No worker retirement benefits or pension costs
Besides cutting costs, there are other benefits to exporting jobs, including the following:
Tax incentives provided by our government
Incentives from foreign governments
The creation of new international markets for the company's products (which ultimately empowers the company to turn a deaf ear to this country's problems and influence)
The continued benefits of our legal system and the freedoms that we provide
The net effect of all of this is lower costs, higher revenue, higher profits, higher stock prices, bonuses for management, and the creation of wealth for a subclass that benefits from low taxes at the expense of the rest of us.
MadRat
Lifer
- Oct 14, 1999
- 12,008
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I think its more of a PRIVACY and SECURITY issue for certain aspects of outsourcing. Some programming is better left outsourced. I want no tax or business management software used by the government and publically-owned corporations outsourced for security reasons. If you aren't watching this play out from the security side of the argument then I pity your company - its secrets are long since lost for sure.
zephyrprime
Diamond Member
- Feb 18, 2001
- 7,512
- 2
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I believe that the problem is really due to 2 things:
size of the outsourcing phenom
& currency
In theory, the whole innovation argument is valid but like so often happens in economic analyses, the proponents somehow assume that the end equilibrium state can be attained with a snap of the fingers. I think economists need to learn a lesson from the science of heat transfer and realize that the road to reaching equilibrium is the larger part of the issue than the fact that equilibrium will inevitiably be reached.
In reality, innovation is much much harder and slower than outsourcing. So, this fact produces a short term disequilibrium between the nation that is outsourcing and the nation being outsourced to. If the oursourcing nation is much more populous than the nation being outsourced to by a factor equal the ratio of the difficulty of innovation/difficulty of outsourcing, then there is no problem. But in the current situation in the US, the nations we are outsourcing to are much more populous than ourselves.
So to address this problem, the natural thing to happen would be for the currency of the US to fall relative to the nations we are outsourcing to. This would solve the problem. But because the nations we are outsourcing to are smarter than us, they prevent this from happening by pegging their currency to the dollar. This cannot be done indefitely by these countries while also maintaining the growth rates. Eventually, it will be possible to force a run on the bank like Soros did with the Baht.
size of the outsourcing phenom
& currency
In theory, the whole innovation argument is valid but like so often happens in economic analyses, the proponents somehow assume that the end equilibrium state can be attained with a snap of the fingers. I think economists need to learn a lesson from the science of heat transfer and realize that the road to reaching equilibrium is the larger part of the issue than the fact that equilibrium will inevitiably be reached.
In reality, innovation is much much harder and slower than outsourcing. So, this fact produces a short term disequilibrium between the nation that is outsourcing and the nation being outsourced to. If the oursourcing nation is much more populous than the nation being outsourced to by a factor equal the ratio of the difficulty of innovation/difficulty of outsourcing, then there is no problem. But in the current situation in the US, the nations we are outsourcing to are much more populous than ourselves.
So to address this problem, the natural thing to happen would be for the currency of the US to fall relative to the nations we are outsourcing to. This would solve the problem. But because the nations we are outsourcing to are smarter than us, they prevent this from happening by pegging their currency to the dollar. This cannot be done indefitely by these countries while also maintaining the growth rates. Eventually, it will be possible to force a run on the bank like Soros did with the Baht.
MadRat
Lifer
- Oct 14, 1999
- 12,008
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I was figuring something along those lines. Eventually the source of the outsourcers becomes too expensive and they too become left behind, whereas the customer of the outsourcers becomes the sole real benefactor and the sole reaper of benefit. So in the long term, if there is no security breach as far as intellectual property would go, then technically the people that do the work bleed themselves dry. Unfortunately, with deferred taxation currently in effect left unchecked our national interests are left behind by our former U.S.-bound companies. So where the U.S. should benefit they will not.
zephyrprime
Diamond Member
- Feb 18, 2001
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Yes, but there is definitely a technological transfer in place. Not just the nuclear cloak and dagger stuff but also mundane manufacturing technology and business practices. The chinese are bleeding themselves dry right now but your point about the debt by the same process is very worrying. IF growth doesn't continue but a whole lotta debt is committed trying to get growth, we may end up in the same nasty situation the Japanese were/are in. A lot of debt is owed but insolvent non-growing debters aren't liquidated and continue to service their debt thereby causing deflationary forces.
So what you're saying is that America should outlaw all these things so our citizens can compete with the world. Then we could insource all the jobs we lost and have 110% employment levels!
Who here suggested that? He merely stated the advantages from the perspective of corporations. In my opinion, I believe that if we want to have the type of globalism that right-wingers have wet dreams over, we not only need to globalize jobs but also globalize worker protections, rights, and benefits. Hiring these people as dirt-cheap labor does no one good in the long run.
this is the most retarded thing I have read this week....we cannot "globalize" workers protections and such, to suggest such is assinine...we could stipulate that all companies which import to the US or are located in the US must always employ people covered under said protections, but at best you will see companies stop importing to us or them trying to lie and say they offer protections and then we would have to try and police it.....
personally I agree with dirtboy, as it stands now we as a nation cannot compete, our work isn't that much better to justify the higher cost, plus due to labor regulations it costs companies alot more to employ people that live here vs. outsourcing...if you could mandate that all other nations raise their bar with re. to benefits and protections then that would be one solution, but the fact is that is impossible.
Ah yes, you and the db supporting human slavery and dangerous work conditions like the Chinese have thousands of people lose their lives or seriously maimed on the job for 25 cents an hour.
Sure we could do the same thing here, let's race to the bottom, would help with population control at least.
And how are you going to do that??? Hmmmmmmmmm......? I'm still waiting. Are you going to invade all these countries and force their governments to do what we want?
Oh wait, you're not going to change them. People will enact change when they want it. We wanted all these changes and we got them. Then manufacturing jobs started leaving. Then the telco industry started dropping high speed data lines all over the place and now we can outsource low end tech jobs.
It's called survival of the fittest. If someone is willing to work without health benefits, then they are more likely to get a job because it will cost an employer less. Deny that will you? Try running a business for a day.
Other people are willing to take our tech jobs because they have no other choice. Over time, they will begin to demand more rights. Just because it doesn't happen today or when you want it to happen, doesn't mean it won't. There's a huge difference in intelligence between someone who assembles shoes and someone who write code. The smart ones will seek change down the road.
In the meantime, you just gotta face that this is the way things are.
You get all excited about high paying tech jobs, but ask yourself how many Mom & Pop stores, the ones you claim to love and want to protect so badly, have gone out of business due to Internet retailers who undercut their prices. I don't see you complaining because you are too busy cashing your big paycheck.
Don't point your finger at me. I was just expanding on your suggestion. You were the one who said we don't need laws to protect people any more.
- Mar 20, 2000
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Originally posted by: SuperTool
I guess we all gotta give up our health benefits and agree to work for $3/hr to keep our jobs
unless we can do like the unions did in the early part of this century and coerce the foreign gov'ts into siding with us then we'll have to wait around for their own people to do so.
Originally posted by: ElFenix
Originally posted by: SuperTool
I guess we all gotta give up our health benefits and agree to work for $3/hr to keep our jobs
unless we can do like the unions did in the early part of this century and coerce the foreign gov'ts into siding with us then we'll have to wait around for their own people to do so.
I don't remember such a thing happening in the last 4 years. Refresh my memory please.
I remember Spain's govt siding with Bush without having their people do so, but I don't remember the union angle.
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