It's gotten so prevalent that even the outsourcing is being outsourced.
A firm in India is performing offshore outsourcing services for at least one American pharmaceutical company.
Offshore outsourcing is, of course, the practice of hiring a foreign organization to perform some of the business functions of a domestic company.
There are many reasons why it takes place, but the prime motivation is lower labor costs. Another advantage for companies is the opportunity to avoid America's labor laws including those concerning overtime work, safety and health considerations, compensation for work related injuries and layoffs. In many instances environmental regulations that would apply in the United States are also avoided overseas.
And an added consideration that is gradually drawing our pharmaceutical industry to foreign shores is the desire to avoid the laborious process of obtaining drug approvals from Washington.
At this time, India is the prime beneficiary of the outsourcing phenomenon, being more than capable of providing the basic prerequisite of an inexpensive labor pool involving intelligent, skilled workers, although wage levels are rising. The population's knowledge of the English language also gives it a big edge, at least for the time being.
A recent report in the LA Times revealed that China is also marching into the process, and this could provide an added impetus to the trend. Retired New York Times Beijing bureau chief Nicholas Kristof, writing in his memoirs, reminded us of Napoleon's prophetic words: "When China wakes, it will shake the world."
Furthermore, no one can refute the fact that China is also well positioned to provide a highly intelligent and skilled labor force.
The outsourcing process usually starts with jobs in the field of information technology (data entry, computer programming and customer support). The criteria in such instances call for the work to be easy to set up and to be repeatable.
The potential, however, extends far beyond this narrow area. Pfizer has announced, for example, that it intends to transfer its extensive, highly-skilled research operations to India. .
The savings in labor costs can be significant. According to a Development Bank Research Bulletin dated 5/6/08, the minimum wage in China's highly industrialized Guangdong province is equivalent to about 50 cents an hour in U.S. Dollars. It's reported that a monthly income in China can be roughly equal to a one-hour wage for many workers in the United States.
And India is an even better deal for American companies. A report by Deloitte and Touche cites IMF data indicating that the typical monthly wage for manufacturing workers in China is 4.7 times greater than that of India.
And now it's reported that Africa wants a piece of the action. Egypt, Ghana, Nigeria, Senegal and South Africa are all reported to be more and more aggressive in their efforts to compete with India, and their labor costs are currently among the world's lowest.
All of this, of course, is bad news for American workers who are currently struggling with a recession which is threatening to become a generational event.
Economists will generally extol the benefits of globalization with its accompanying off-shoring of jobs, but they only seem to vaguely describe the inflation risks of the alternative, which is realistically called protectionism. However, with a nod to the independence of some of our own financial experts here on Gather, it should nevertheless be noted that most economists are either on corporate or government payrolls or are funded by grants from one or the other. It may be well to bear in mind that their opinions, which in times of crisis seem to flood our collective consciousness, may well be colored by conflicts of interest.
Despite this impediment to unbiased communications, however, some dire predictions have managed to seep through the media filter.
The McKinsey Global Institute estimates that the volume of offshore outsourcing will increase by 30 to 40 percent a year for the next five years. Forrester Research estimates that 3.3 million white-collar jobs will move overseas by 2015. The Gartner research firm has estimated that by the end of this year, one out of every 10 information technology jobs will be outsourced overseas. And, Deloitte Research predicts the outsourcing of 2 million financial-sector jobs by 2009.
Given the momentum that has been added to the mix by the effects of the current recession, these projections are likely to be severely underestimated.
Disturbingly, none of the presidential candidates have expressed any more concern for this problem than they felt was absolutely necessary. It doesn't appear that the subject is on either party's priority list despite the agitation of the labor unions.
However, if left unchecked, as big business would prefer, the long term consequences could be considerable. The general consensus seems to be that as big business goes, so goes America. But, consider this. Consider that this nation may be just a container that currently happens to be holding the headquarters and many of the operations, albeit dwindling as they are, of the multi-national corporations that call America home.
And consider that, as other regions such as Asia, account for an ever increasing share of both the market base and the employee base for these companies, the executive populations may gradually change to reflect the nationalities involved in these trends.
From there it's but a hop, skip and a short jump to get to the point where these global giants could well move their executive offices closer to their employees and their customers.
After all, Halliburton has already done just that. If you want to meet with that company's CEO, you'll now have to travel to the Persian Gulf.
It's time this issue ended up on someone's priority list. If left unchecked, unrestrained globalization could become a major factor in an international shift of economic power that could leave the United States as a second rate world nation.
Dave McGill, News Correspondent
Dave's column, "The Contrarian," generally published every Friday, to Gather Essentials: News will sometimes present a contrary view to various aspects of the news, or an alternate take on the conventional wisdom of the day, and will occasionally appear on other days of the week
Dave has been a senior officer of a large eastern insurance company, involved in economic projections and investment strategy, president of a Midwestern mortgage banking company, and a financial consultant in Southern California, serving clients in the field of commercial real estate development
You can find all of Dave's "The Contrarian" columns at: http://gather.com/thecontrarian...... Keep up with Dave's other postings and Gather activity by joining his Gather network - just click here: http://atadaskew.gather.com........ You'll find Dave and other News Correspondents, plus celebrity content and plenty of other News experts at News.gather.com.
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Comments: 56
We now live in a global world. This much is true and irreversible. So the question is not whether to globalize but how best to manage globalization. Globalization has its benefits as well as its drawbacks, many of which you and others have discussed. Outsourcing of high end intellectual jobs and moving of manufacturing jobs can be profitable to US companies, and that is one concern. Tax incentives for offshoring seem to outweigh incentives for staying in the US. Availability of a willing (not just cheaper) labor force and highly skilled workers are all factors. Etcetera, etcetera, etcetera.
The key is that we need to have honest discussions of not only the costs/benefits of globalization, but how the US can manage the process to encourage the highest levels of mutual benefit. We must not be afraid to put all information on the table, including looking at our current policies and incentives that dissuade domestic investment. We must also be insightful enough to consider our relationships with our individual trading partners around the world and the world economy in general. We must also consider the health, environmental, and human rights components of globalization. These are all complex and intertwined issues.
To date we haven't been honest with ourselves. We decry the loss of jobs but don't plan for future jobs (did the horse-drawn carriage repair man collect unemployment or did he learn how to repair the new horseless carriages?). An election year is not a good opportunity to deal with these issues. As we've seen, people routinely twist the simplest statements into something sinister during the campaign season. But after the election, after the rhetoric on both sides, after the new President and new Congress take office, we have a real chance to have a frank discussion of globalization and other important issues. I hope that we, the people, take this opportunity to elect a real chance at change. Furthermore, I hope that we, the people, will remain engaged after the election and be willing to listen to all sides so we can plot a workable path forward.
I have felt for some time - a few years to a decade, that the way of life Americans have enjoyed more or less off and on since post WWII will be no more. And it has been that way for some time.
The strong US dollar post WWII for decades is now gone due to the strong Euro currency and EU.
Asia, of course, is a force to be reckoned with in coming decades.
The US had the advantage of not having had WWII on our soil, so our factories were not destroyed.
We enjoyed the fruits of the post WWII boom unlike any other.
However strong Europe is and Asa becomes, we will halways have what many of my Euro friends described was their reason for coming to the US on a post-doc:
"America is the place where everything is possible."
They meant, if you have an idea, someone will buy it. If you want to do something, there are not legions of stupid rules preventing you.
But the old days are over.
We must figure out how to live in the new world.
Fewer and fewer homeowners, for one.
We need a REAL GI bill for the new vets - that is part of what made post WWII great - my dad, my FIL and millions of other men and some women obtained a terrific education and had great jobs, which greatly contributed to the wealth and productivity of this country, based entirely on the opportunities presented in the GI Bill, not to mention easy homeownership.
Every time we do something to protect specific jobs or a specific industry we dig a hole that gets bigger and bigger. I believe what makes our economy strong is the laissez-faire foundation. That allows us to be flexible and adjust to changing times. When you try to "control" the economy, you always create problems down the road.
Except in the field of customer service where I DEMAND all those jobs be returned immediately. I am not having much luck dealing with Corporate America's Customer Service Center in whatitsname-istan.
(see how I am seguing from serious to comic?) You have also left out an important part of the economy that we should be getting rid of: Outsourcing non-work - another solution for the economy(Humor)
The world has much to offer in the way of finding people to do the work which is necessary for whatever job needs to be done, and companies should be encouraged to go out and find the talent or labor they need from wherever it is. The rewards then given that talent or labor is justified wherever it resides.
However, having said all that there should be some thought given to what we call labor laws which would include child and slavery labor, and the legal patent, and intellectual property laws.
It would be good to remember that this country is moving towards an Export Economy where many other countries are buying the stuff from the US also. In other words, it's a two way street now.
This has been an ongoing problem that few have paid attention to. Who is to blame? What can be done about it. And just last summer, while planning a trip, I booked a room for a trip. The order was taken by a company in India. What? No one in America, last year needed a phone job? They were difficult to listen to. Polite, and quickly asked for a comment for their boss, to obtain a raise. Not only has this gone on for awhile, thru several administrations, no one listened when the very first major layoffs began.
I have noticed that it is cheaper to fly to India, to be treated for illness, have surgery than to stay here. Not only have we been let down, we are in serious, serious trouble. And financially speaking, we are losing a way of life, it appears our former major employers have freely given to others, overseas. Not only sad, but dire for our future. I refuse to buy items from some countries, that started out as our friends, learned a few of our systems, and now can really harm us.
I believe Americans can make it. But who is working on this problem? Who is really paying attention to those who need work, and have gone from reasonable lifestyles, to two or three hamburger slinging jobs per day to survive. We are losing our homes for crying out loud. What will it take? Nice job Dave. Ellen B
"what are you talking about?"
"Are you nuts"?
That is a clue as to just how tough things have been out across the globe, when you see so many so happy to be to have a steady job paying 50 cents an hour, working 10-16 hours a day, 6 days a week.
Ypu. Leveling the playing field includes bringing one side down, as well as, raising the other end of the field.
The flaw in this statement is that there is any such thing as a "domestic company". All publicly traded corporations are now global entities. Halliburton, as you correctly noted, is a perfect example. Which product puts more money ito circulation in the US: a Toyota made in Kentucky or a Chrysler made in Mexico?
In fact, a publicly traded corporation has but one obligation and that is to procuce a profit for its stockholders. A CEO can increase profit only by increasing revenue or reducing cost. Reducing cost is a fiscal neccessity and responsibility.
As consumers, we aide and abet this practice every time we make a buying decision based on price. If the company that made the computer you are working on has its help lines in India, you ae part of the problem.
I find myself recommending that young people look carefully at fields of study and consider how easy or hard it willl be to send their chiosen profession elsewhere.
I strongly recommend plumbing. No one has figured out how to send a plugged up toilet to China.
What is going on a a "leveling" of labor costs across the world, with workers in Asia, for example, increasing their income and wealth and workers in the US and West Europe losing income and wealth. Times of rapid change in ecomonic system create the possibilty of dangerous social and political unrest as well as opportunities for the creation of new economic and social structures.
Labor related costs are the largest expenditure for most firms, so reducing or eliminating labor costs are the most effective way to increase profits. The plan to privitize Social Security, eliminate employer provided health care, automation of functions and moving jobs to low cost labor markets are important ways to improve corporate profits by reducing the labor component of costs.
The only solution is at the ballot box. The globalization of markets is a macro trend that cannot be stopped, only managed in a more effective way. If Americans had 10 years to adjust to the economic changes that globalization brings instead of finding out that their job is being moved to China nect month things would be much different. It is the rapidity of the change that is the primary problem, both in the country losing the jobs and the country receiving the jobs. Humans do not deal well with rapid change, and the more rapid the rate of change, the more economic and social problems we will encounter.
Americans need to elect members of Cogress that will look out for the long-term interests of all of us, not just the corporations or the already well-to-do. This is very complex problem that needs to be managed in a very careful and thoughful way. Currently it is not being managed at all, with prediicable results.
This article just proves my feelings on the US manufacturers. They are out for number 1 and that is it. It doesn't matter what happens to the people in this country as long as they increase their bottom line and increase their bank accounts. The American people have just become an expendable commodity.
I have never understood why the government would allow these big businesses to take their business out of this country and then expect us to pay the outrageous prices for their products just so they, the big businesses, can make lager profits.
Our government is just about always the first to arrive on the scene when a disaster strikes another country but they wont do anything to help us, the one's who pay their salaries and keep this country going.
UpScaleInteriorDesigns.com
Besides for all the vested interests who are reaping the windfall profits from this cost reduction scheme, and the immense influence those vested interests have over elected politicians, there are other dynamics at work.
Technology, particularly in the areas of transportation and communication, have made the world a smaller place. Ever wonder why every little town has some old hotel that long ago stopped being an actual hotel? Because in the days before the automobile, when travelling by horse one had to stop for overnight stays on journeys we now take in a matter of hours. Our town of Bancroft is 60 miles north of Belleville and I have read of journeys of three days (two overnight stops) by horse drawn carriage between the two. Now I go there in little over an hour, spend the afternoon and drive back on the same day. This dynamic is at work in the larger world.
America is a free market, capitalist society and most Americans want it to remain that way. This means that the market will decide. And the market will not be stopped by legislation, not easily at least. With a smaller world, instant electronic communication, cheap overseas phone service and rapid international transportation the cheapest producer is who will get the manufacturing jobs. There is no squaring that circle.
This means that poorer nations where people are willing to work at tiny fractions of what Americans and other industrialized nation workers demand are going to get more work and we are going to get less. This means that they will start to become wealthier and we will start to become poorer. It is inevitable and stopping it is like trying to dam the ocean: can't be done.
There are good things that will come out of this change. The anger and resentment felt by many people around the world for Americans will diminish as those folks get a bigger slice of the pie and Americans get a smaller one. This will take the pressure off of the international terrorist movement. Why risk you life attacking America when you can take their jobs away from them instead? It will also mean that the need to give aid to poorer parts of the world will diminish as those regions begin to share in the prosperity.
The big problem is the greed of the very wealth who control the multinational corporations. They are currenlty skimming much of the wealth that is being lost by the American worker into their own pockets, which means that only a fraction of it ends up in the pockets of the Indian/Chinese/African workers. Legislating labour standards, environmental standards and minimum wages etc. cannot be effectively done on the national level anymore, as the corporation just moves their production away from any jurisdiction that imposes conditions they don't want to needier jurisdictions who are willing to be exploited for a pittance.
This means that we absolutely do need to move to a global, one nation set-up so that laws can be enacted that are enforceable everywhere. It means that the struggle that labour unions waged through the 1800s and early 1900s, to ensure that the wealth generated by the industrialization of "first world" nations was shared a little more evenly, will have to be waged all over the world in a united labour front.
Obviously, this is not going to happen overnight. As much as Americans are enamored of capitalism they are equally repelled by the idea of a world federation. Perhaps the poverty that is coming in this massive redistribution of wealth will replace that nationalistic pride with a little humility and a recognition of the need to begin to think in terms of global needs, instead of national or regional needs.
I know I live in an unusual place, Portland, Oregon. I am constantly reminded that huge swaths of our people want to buy sweet GM corn-syrup food in other places.
That food is becoming more expensive, however, and even my sister in Virginia is now huddling with her neighbors to figure out who has the best ground for growing which food that they need.
I cross the river here to go to a church with a lot of rich people. They just want to do charity and give people food. Most of them don't yet get that the bigger and more important hunger is for work, and that people want to do something useful before they share food with you.
After my separation, I was working on the church grounds with a shovel I got out of the garage. I was in a fog. A homeless guy with an infected wound on his chest came and took the shovel and said, "Why are you using a roofing shovel in the garden?"
I said, "I don't know, it's just a shovel that was around." He said, "See, the lever on the bottom of this shovel? That's for lifting off shingles." "Oh," I said, and stepped aside while he showed me how to use it efficiently even though it was the wrong tool.
He had just had an aneurism repair in the hospital a few blocks away. He likely would not have survived except he was right by the hospital when he went down, and his friends took him right over. We had a great chat and agreed to pray for each other. I went into the church and got him some meal coupons at Sisters of the Road Cafe, where many of our parishioners, rich and poor, also go to eat because it is comfort food and solidarity.
Some of his friends showed up, and he shared the coupons, and I was so healed and comforted by having met him and having learned about the roofing shovel and all.
I am 58 with a BA, shucked off in the usual trade-in for a younger model. My BA and my age are severe challenges to getting work. I am in a similar boat to the man I met while trying to do something constructive.
Peak oil is here. We will need to change how we do things as drastically as Cuba had to when the Soviets turned off the spigot. We will lose weight. We will have to work in our back yards and our vacant lots. This is not a bad thing.
It reallly is a complex issue, and we better start being honest with ourselves and the world in dealing with it. It's also useful to note that while we lost many manufacturing jobs to China, China is now complaining that it is losing those same jobs to Vietnam and Malaysia. The reasons are the same - costs are cheaper in those places than in China (and than it was in the US and Europe).
Thus, this is a world wide problem that needs some actual leadership to manage. Which means not oversimplifying the issues into bumper sticker slogans that can be used to justify partisan voting. No, this is going to take some hard thinking and honest communication between the public and our elected representatives (and the US and the world).
"Americans need to elect members of Cogress that will look out for the long-term interests of all of us, not just the corporations or the already well-to-do. This is very complex problem that needs to be managed in a very careful and thoughful way. Currently it is not being managed at all, with prediicable results.
Duane B., May 17, 2008, 9:04am EDT"
Which reminds me to remind others, that the multi-national corporations involved in all of this were probably just national corporations at one time ... meaning that they began somewhere then expanded ... some might say as a cancer metastasising ... what I mean by that, is that they have NO national allegiance ... they follow the profit margin wherever it takes them with absolutely NO compassion for the folks left in the lurch when they move on ... the benefits they offer during their "local" growth period may well be taken back during their next phase ...
Big business has no moral compass other than the PR picture they put out and PR is all that is ... they have no national, nor even political party loyalty, all are just tools which their wealth purchases for their bottom lines ... we had better all tighten our belts because they have a greater plan figured out by the think tanks they own, that guide them many years in advanced planning ...
After they leave us, and our economy declines to the sufficiently low level that they foresee ... some years later they will present us with "the" plan (already formulated) to "save" us "finally" .... the North American Union of Canada, the USA, and Mexico (for a start, to be later extended much farther south) ... and by then, because we will be hurting so, and what they promise us will THEN sound so good, we will welcome the changes with open arms, even demanding them, as they will have set it all up to work out just that way .... these folks are not dummies, they have plans and purposes that extend through time far beyond our pitiful imaginations ...
The sooner we awake to the truths of just WHO is actually pulling the strings of our "puppet" elected leaders and their countless "advisers" the better ... please wake up folks.
Wasn't economic collapse a factor that helped to end Democracy in Germany and foster the rise of the Nazis?
Simple mathematics tells me that if money is leaving this country at an increasing rate, soon we will have a lot less.
Several years ago I decided to retire someplace else, some place where wealth isn't dissipating, like India or Venezuela, some place with a brighter future.
Any suggestions?
When I read comments from people who are supporting all of this, it makes my blood boil. I suppose that you people will be happy when our economy is completely destroyed along with our infastructure. *MORONS*
~
From there it's but a hop, skip and a short jump to get to the point where these global giants could well move their executive offices closer to their employees and their customers.
Hello Dave, I believe the way one checks this situation is through the IRS and other Federal Agencies. I believe in order to utilize the US Tax code, a company should have 51% of it's assets and 51% of it's employees within the US. If not, they can not be considered an American Company. I also believe imposition of Import Taxes should be bartered against employment opportunities on US soil. As an example of what I'm getting at, take the american automobile. Some of these so-called American products are put together with parts, 95% of which are imported. Tax incentives could be offered if those jobs were brought back to the US if they want to continue being perceived as an American company. Otherwise they could still be free to continue importing these parts but, with an import tax upon each item or product.
If a screw cost 1 penny to produce in Mexico or elsewhere and it would cost 2 pennies to be produced in America, by an American worker, I would levy a 1 penny import tax against that item (ea).
Now, I like to be fair so, companies that pass a threshold of 75% employment and 75% assets on American soil, tax rebates would kick in reducing that 1 penny per item as a benefit for establishing an economic engine in the USA.
Also, I believe if a company is one hundred percent AMERICAN MADE, at the consumer level those products should be TAX-FREE at the cash register.
Using the BARCODE, any product proven and approved could be designated American-made would ring up as tax-free purchase. Everything from a can of corn to clothing to an automobile or House. If it's american-made, it should be tax free. I believe that would stimulate our economy much more than borrowing a couple hundred million from China and mailing each citizen a few hundred buck so they can go to Walmart and buy a product made in China.
Federal Prison Industries, Inc. which operates under the
trade name "UNICOR," is a wholly owned government corporation
within the Department of Justice, Federal Bureau of Prisons
(BOP). UNICOR was created in 1934 to provide employment and
training opportunities to inmates in federal custody. UNICOR is
the BOP'S most important correctional program to relieve inmate
idleness and to ensure the orderly operation of federal prisons.
UNICOR provides inmates with training and experience to develop
job skills and a work ethic, which can help to prepare inmates
for successful reintegration into the community and improves the
likelihood that inmates will remain crime free upon their release
from prison.
http://www.ftc.gov/os/comments/dncpapercomments/04/unicor.pdf
Even if we are all wrong, we can't mess up and defile the really cool name, 'The New World Order. I mean, how can it fail, with a name like that ?
Tell you what, if you'll be quite others will never have heard of us or what we're up to. Pretty soon we can do just about anything and nobody will know 'The New World Order' is responsible. OK? promise to stop telling everybody what we're doing?
;>}
So, you can thank our Congress for selling our to the teachers' unions, our universities for pursuing research grants instead of academic excellence, and the sense of entitlement of the American kids who have received a self esteem education and want top salaries but lack basic skills. Every time I see a kid working at McDonald's getting $3 or $4 per hour above the minimum wage who can't make change, I despair for the economic future of America.
The world is a very competitive place that owes America nothing. The world will hire the brightest employees, buy the best products, and use the best services available, and if our educational system is second rate, then our economy will also be second rate.
No politician can change that, no matter what they promise you in order to get elected.
Some credit unions are as bad as banks. It is possible for credit unions to operate as cooperatives, with a great deal of transparency. These may have customers who pay enough attention to keep them honest. That is where I bank now. You can get a phone number to talk to an actual person. This is a local credit union that is not an international corporation.
Canada has systemic problems as bad as ours and so does Europe. Wikipedia has a freedom index, and Costa Rica comes up pretty well. Some people are moving to Mexico, but that is fraught with bureaucracy to match ours if you want to be legal there.
Some companies also realize that having customer service reps who speak the language allows them to do inexpensive market research and to keep customers who are advanced adopters.
I have a friend who recently visited Belize, and she said the people she talked to there like Americans better than the Chinese. She said Belizeans told her the Chinese are way worse on the badly behaved imperialism index.
Some communities in the U.S. are safer and more integrated across assorted boundaries of class, race, religion, culture. Some take great pains to have local organizations that distribute necessities carefully. The biggest challenge right now is housing. When a location cares for its least advantaged, crime goes down, and property values go up. In some ways, the subprime blow-up may be addressing this. The properties irresponsibly loaned on are still there. The banks have to care for them somehow.
America has not raised one other country to it's own level--it has instead reduced our standards to theirs. Sad, but true. Greed is it's own reward.
Richard Owl. That's an intersting idea, about 100% made in the U.A.A., then 100% tax-free, when bought in the same.
Richard, you are also, so very hilarious, when you want to be. (Really cool name.)
On the other hand you see cities raise taxes forcing companies to look elsewhere. The UAE made Halliburton a great deal with massive tax savings, building entire areas of town that looked identical to a Florida Condo community.
Some economic policies make it harder for companies to compete then we are surprised when they look somewhere else. Healthcare costs are outrageous in the US yet we do not allow companies to open the marketplace. I work for a small company and we are limited to about 3 healthcare companies and they look at us as a small pool of about 150 employees. One person with a heart attack will cause our premiums to go up but if we were allowed to buy into a larger pool then it would lower health care costs. It seems that all regulators talk about is either universal health care or status quo...nothing in between.
We need policies that are not "hostile" to companies and that will encourage them to stay here. Right now Dems are talking about a profit windfall tax for these nasty oil companies. Well guess what will happen...You are ONLY charging the US companies forcing them to compete with international companies that do not have to pay that. How long do you think these oil companies will stay in the US? How many jobs would they take with them if they move to a more tax friendly country? How much tax revenue will we loose if they do?
http://www.taxfoundation.org/publications/show/22917.html
it gives you a good indication why companies either move to different states or even different counties. It is sorted by combined federal and state taxes and we lead the pack by significant margins. These are just the OECD countries but if you look at countries like the UAE with 0% tax burden it is hard to convince a company to stay or even grow in the US.
You are right that globalization is a growing and inevitable process at this point. Where the need is would be to insure that those corporations moving off shore for tax purposes, pay the Social Security taxes that American workers will be drawing when that time comes. Another factor, mentioned above by someone, is the speaking of English in India. OK, they speak sort of English but have you tried talking to a tech help person over there? What they speak is not American or even the English of England! They are virtually incapable of making their words and sentences sound like anything meaningful to an American.
This outsourcing was allowed to increase over recent years with no effort on the part of the government, to minimize the negative aspects of it on the American citizen. Indeed, the administration's policies actually encouraged the outsourcing.
Someone made a comment about good responsible companies not going for the bottom line above all else. That person didn't understand that most companies are corporations and a corporation is designed and intended to look out for the bottom line at the expense of anything and everything else. The only preventative to their aggressive efforts to increase the bottom line is regulation. A corporation, by its very nature, has no conscience or any kind. This is not a flaw as it was never the intent to give corporations a "personality" as such but to outline what they do. And that is make money!
One cannot blame a snake for being a snake nor a corporation for being a corporation! But some control of corporations by legislation is appropriate if well conceived and implemented. No regulation is what gives us the Arther Anderson effect resulting in a multitude of corporations "refiguring" their earnings and finding that, lo and behold, they had figured wrong and wanted badly to correct the errors of the past before they were charged with malfeasance.
It is a complicated and difficult subject with which to deal but one which must be addressed before more damage is done to our economy and our citizens.
Briefly:
Every wise master of a house knows never to try to make at home what he can purchase for cheaper elsewhere. What is prudence in the case of a household, can scarcely be folly in the case of a kingdom.
The whole history of human progress has been in finding ways to acquire the greatest amount of goods expending the least amount of effort. Being able to purchase products cheaper from overseas is a blessing, not a curse. It means we are able to acquire more in remuneration for what we produce. We get back more for what we put out.
The fears of outsourcing are as unfounded and irrational as the age-old fears of technological advancement "putting people out of work." When labor is freed up from no longer being necessary to produce a given product, it is a blessing. It means we are then able to increase our standard of living, by using what available scarce resources of capital and labor we have, to produce more of other things we need and want.
Today, it requires the labor of only 2% of the American population to feed the other 98%. That is a good thing. We could trash all our technological advancements, go back to the methods of the 19th Century, and surely there would be a whole lot more jobs available in the agricultural industries; but our standard of living would be drastically reduced, not raised. We progress by finding ways to alleviate scarcity; not by submitting to it, or trying to induce it.
The wealth of nations is measured in the abundance of goods and services available for the peopple's enjoyment and satisfaction. We advance our living standards by alleviating natural scarcity, not by placing obstacles in the way of trade.
If every country in the world decided to start giving their products to us for free, could anyone argue that that would be a blessing? Sure, the producers of those products would have to find something else to do, but rest assured they would. There is no set, finite "piece of the pie." As long as mankind has needs and desires that are not 100% satisfied, there will be work to do. And surely other coutries would not be able to give us enough of their products to satisfy every need and desire we have. And if they were able to do so, then whats the problem? Nobody here would need to work; we'd be given everything for free!
The fact that other countries do not give us stuff for free, but only give them to us for cheaper than we could produce them here, is only less of a blessing to the extent that we have to purchase it at all.
Think about it for a little while -- without all the emotionally-charged, economically-ignorant "progressive" hogwash. It'll sink in.
American companies who outsource should be taxed or be denied benefits available to companies who employ Americans at home. There are some industries like steel-making and weapons manufacture that should be maintained within the continental lower 48 states. We might someday be at war with a company upon whom we depend for our war materials. Even if we are not at war with a country that is the source of our war materials, such equipment must still be shipped by sea, too long and difficult a process for a wartime emergency. This is assuming that future wars will still need boots-on-the-ground methods of fighting. Maybe we will be civilized enough someday to settle disputes by diplomacy and treaties.
Gotta go. Inspector Lynly is still fighting WWII on PBS.
Also health care should not be tied to employment. It puts employers in unfair competition with foreign companies.
I dared not tell her what sort of concerns I had about such a profoundly unregulated product.
interesting article, Dave
Dave, you correctly state some of the reasons why businesses move overseas but forget to get to the baseline of the issue. Regulation and taxes have almost ruined American competitiveness. Much of the world is (in the old manner of usage) liberalizing their economies. By doing so they are increasing their own standards of living by attracting foreign/homegrown businesses with lower taxes, fewer regulations, and lower labor costs. Businesses, American or otherwise, exist to make a profit. When they cannot do so in one place they move elsewhere or collapse.
A local version of that is here in the US, the South and parts of the West are attracting business from all over because of their lower costs of doing business. It is no coincidence that the South has few unions, it makes almost as many cars now as the Rust Belt (unfortunately of foreign make). Union shops cost far more than non union shops and this is killing the domestic car industry. The sheer complacency of both corporate CEOs/Unions makes it unlikely that they will ever recover. In the US, the lower taxed/right to work states are doing much better economically than other states. This is not to say that businesses here aren't also leaving but at least more are coming in.
Given the constant attempts to play social games with our tax system and business environment (minimum wage laws have a long and destructive history--look at how it was used to bolster Massachusetts textiles for so long) With all 3 of the llikely presidential candidates lacking an economic clue, I expect the whole dislocation process to speed up and spread South as Washington tried to level the playing field and support failing northern and north eastern states by enforcing higher wages, more forced unionism (see card check), and tighter overall regulation to "protect" the environment.
You said it yourself, none of the candidates for president seems to care. They call for economic justice, a level playing field, higher taxes, and higher tariffs. None of which will save American business or jobs from fleeing the country
Interesting comments! As a long time resident in a right to work state I can assure you that we are not enjoying all the benefits you list. I said before the right to work was passed that we didn't need it, we already had all the benefits, low wages, no job security, unsafe working conditions, poor economic outlook. How in the world would right to work improve on that!
However you are basically correct that we have very costly regulation. Even parts of it that most people would consider sacrosanct lend a great amount of regulation and cost to it. You can't hold school in the buildings I attended - they are now classed as unsafe. Most people agree that children's safety is of paramount importance but that is nothing new, only the cost.
And the cars we drive, between the emissions controls and the safety features we have a tremendous investment! You could by a new Chevrolet in 1956 for $4,000 and you can still buy that car for that. However, when you get the safety and emissions controls then it becomes $30,000!
Frankly, I don't have a good answer to the problem, but I know that denigrating unions and wanting less safe working environments is probably not the answer. A large part of the answer lies in getting the rest of the world up to speed on all these things so their costs are as high as ours.
I am curious about what you have against economic justice and level playing fields. These sound pretty good to me! Tell me what I am missing. That is not what we have throughout the world.
The more we choose Mexican-made over Chinese-made:
- we raise the standard of living in Mexico
- fewer Mexicans will be motivated to border-hop and work here illegally;
- we cultivate a new market for American products
- we reduce the ultimate cost (short supply chain, less transport energy, smaller carbon footprint) of products in our stores
Redirecting offshoring to China to Mexico also makes the supply chain more secure. Working with Mexico is probably easier, too, because for most Americans, learning Spanish is much easier than learning Chinese.This is to let you know that your content has reached at least 20 comments and therefore has been removed from I want it All
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