Questions for opponents of outsourcing

This was a great thread, most of my comments have already been mentioned by others, however I might add that all the new jobs that have been created in the US are pretty much low paying jobs, which means that americans are having to work two jobs to keep their homes an Johnny in college that's if they could afford to get him into college.Tele-marketing jobs long a staple for stay at home moms are now being done by India. Many hospitals are now outsourcing their X-ray , cit an Mri's to be read. All at a cost much less then american make. It's not going to matter if the priduct is cheaper, if you can't afford to buy it.

Originally posted by RANT
There's no such thing an a SANE outsourcing fan, they are simply pro-business. Call it a necessary evil if you must.

I disagree. I don't consider myself pro-business, simply pro-economy.

Great, there's some logic to that. Some good logic actually. But it doesn't change the fact it SUCKS...

No, it doesn't. But there has never been an economic system in history where what's best for the economy happens in a way that's painless for all.

And in the case of the baby boomers, ALOT were told why bother with college...you can make a nice life for your family servicing insurance customers (or whatever) in now extinct service jobs.

These people aren't children. They are/were grown adults who can make decisions for themselves. Life is about taking risks. No-one complained when the decisions were rewarding for some time. People are at times lulled by prosperity into thinking that their comfort is guaranteed by some kind of welfare state, and that talk of the market is just ceremony. It is times like this when they are corrected.

And no amount of logic, or well thought out explanations of what's good for Wall Street will ever change the opinion of the unemployable 50 year old textile mill worker or super specialized programmer now working at Wal-Mart or anyone else that's just been kicked in the teeth for doing absolutely nothing wrong that...

They haven't been kicked in the teeth. They made their own decisions. That's not to say that society shouldn't help people to retrain themselves, but that wasn't your point, so the bottom line is that they haven't been kicked in the teeth.

And the thought that whole generations of southerners and midwesterners that made their livings in mills and plants manufacturing the very essense of this nation are being compared to the "silly" practice of elevator operators...

Aren't you just denigrating the elevator operators, for whom you previously expressed sympathy, when you say this? Why is the comparison disgusting?

So spruce it up all you like, but the practice of outsourcing remains emotionally and intrinsically abusive to it's victims...

Your entire post seemed nothing but emotional to me. There's nothing wrong with being emotional, but it is irresponsible to cling to emotional statements and ignore how the world really works.

[edit on 7-7-2004 by HeirToBokassa]

Originally posted by izzi
...I might add that all the new jobs that have been created in the US are pretty much low paying jobs...

I can see why people would be upset with this. I wouldn't blame this on outsourcing, however, because by the arguments I made earlier the effects would have happened whether or not outsourcing in its present form had been allowed to happen. The effects on the American economy would be worse if the response was protectionism and withdrawing from the global economy. I feel that people are rightly expressing their dismay at the current situation but at the same time ignoring what would happen if the policies they suggest (e.g. "taxing the hell out of" American firms that outsource) were adopted. I described what would logically happen in the first post.

It's not going to matter if the priduct is cheaper, if you can't afford to buy it.

But it matters if the American product is cheaper, or if as a result of protectionism, foreign companies take global market share away from American ones, because American workers would suffer if that happened. I think it is underestimated by many exactly how much the American economy benefits from global trade.

Im a strong supporter of outsourcing on the basis of having the free economy determine what is economically viable. Here is the simple truth of it: If the US would prohibit outsourcing, that would lead companies to move offshore entirely.

Further, since the U.S. cannot restrict what other countries do, it would place those remaining U.S. companies at a severe economic disadvantage when competing againt companies from those countries that permitted outsourcing.

I will jump in here as a personal recipient of domestic out sourcing. I am a computer programmer and have been a 'freelancer', 'consultant', or 'programming contractor' whichever you prefer, for the last 14 of my 24 years in the software industry. During my first 10 years at a large well-known computer company, they started to out source some of their programming projects to India. That company, though it is now about 1/5th the size it was when I quit in 90, still does international out sourcing. However, I have made a fairly decent living doing contract programming for many companies (including that company) since I went independent.

My typical contract job is an out sourcing job that I do because I have a particular skill or knowledge in an area that their programming employees lack or their employee programmers just have no incentive to get it done on time. I often describe my "employee competition" as programmers that are "retired at work". They generally don't have any strong desire to get the job done in a reasonable time frame.

Occasionally I bid on contract jobs 'against' the company's employee Information Technology departments. I charge quite a bit more per hour than the average employee earns (at least double and often triple), but I ALWAYS win the bid against them. If these employees are interested in keeping people like me from getting their projects, why don't they get off their proverbial rear ends and get the work done?

One benefit I have, is that I am a 'one-man show'. I have very little overhead and no employees of my own and I can always get the job done on time since I have no one interfering. Jobs the size I do (my typical contract is 6 months to 3 years times one programmer) would typically not be feasible to send overseas. So I am not too worried about the India threat.

Most of my jobs are out sourced from local companies ( < 1 hour drive) that have programmers on staff. If these programmers lose their jobs because I do a better job for less total cost and on schedule, I don't feel that is any different than if that programmer lost his/her job because the new guy/gal in the next cubicle produced more and replaced them. Whether the money stays in the company to support the company's overhead or comes to me, I couldn't care less. Usually it is the overhead manager that gave me the project, so he/she must see some reason/benefit in doing it.

No company in its right mind would out source a project if their employees were a better value than the out sourcing agency/company. A highly productive and efficient department will keep its work. Out sourcing, especially to an overseas outfit, is not a cheap thing to do. There are many expensive and time consuming tentacles wrapped around it. When this happens, I have to believe that this decision was made only after significant study and thought.

Personally I believe the decision to out source a software project overseas is really stupid just because it never seems to work like the "salesman" said it would. But I also believe these decisions would not be made if the domestic employee competition was stepping up to the plate and getting their work done. If these same employees were working to keep the overseas out sourcing an uneconomical decision, then I'd be looking for work too. That would be fine. If there wasn't a big need for people like me, I sure wouldn't be doing it.

If this productivity increase was the general case, then our country's economy would be way better than it is now, too.

I called a Dell support rep (in India) to help with a computer problem - they suggested I reformat my hard drive - and took over 40 minutes to draw that conclusion. I hung up and called until I got someone in Round Rock near Austin, TX. I told them about my previous conversation with "Jason" from India - we both laughed and he fixed my computer with a couple of suggestions.

From what I have read about this issue, the scariest part is that the proponents do not know where the new jobs for the displaced workers will come from. There is a hope that there will be some new technology or technological enhancement that will lead the next boom, which would also fit with where we are in the fifth Schumpeter wave. The jobs for the displaced would be brought about by the tech change. There is an argument that this is what happened in the 1990s. Here is a somewhat old article from the Economist that would support this view and gives a brief description of Schumpeter and his waves.

www.hi.is...

"It is still too early to say what combination of new technologies will unleash the world's next great surge of economic activity."

As a son of an autoworker who made it through the recession in the early 80s (kidney beans and hot dogs for that special Saturday night dinner), my heart is against offshoring. However, having sold out to the corporate world and studied all of the business doctrines/theories on the way to a master's in business, my head can see some of the unemotional/objective logic in offshoring. And that is what it is. An unemotional, objective decision to reduce costs to reward the shareholders. Unfortunately, the displaced workers are rarely the shareholders who will benefit. It would be easier if there were some sort of safety nets, beyond working at Wal-Mart. (As an aside, Jon Stewart had a great comment about why Wal-Mart pays so little. He wondered where a person who is paid so little would go to shop...)

The theory of comparative advantage says that we should ship the jobs elsewhere to focus on the job that creates more value. Here is an example. A lawyer does his lawyer work and spends some time filing files. He files faster than his secretary. Even though he files faster than his secretary, it would be best to let his secretary file, so he can spend all of his time working on lawyer work. He will create more value for himself and for his secretary.

If we apply this to offshoring, how are we better off? Where are we creating greater wealth or value by sending these jobs overseas? Looking at our trade defecit, the wealth we are creating for others is not being spent on our goods. Unfortunately, the new manufacturing jobs created under Bush (i.e. burger flippers, restaurant workers), do not create tradable items.

This issue appears to be another one of those with no right answer for everybody.