Are Airlines Outsourcing Maintenance to Other Countries Increasingly?

[edward]

I think you're misusing the term "underemployed." From what I know, it means that you are employed, but have been unable to find full-time employment. You can actually qualify for unemployment benefits by being underemployed in this way (assuming the law hasn't changed in the last four years).

No, the definition I am referring to is the one that is currently happening in our economy. Who in hell wants to draw unemployment when they have an engineering degree?

The more current and applicable definition is:
"A situation in which a worker is employed, but not in the desired capacity, whether in terms of compensation, hours, or level of skill and experience. While not technically unemployed, the underemployed are often competing for available jobs."

 

[loseyourname]

Never mind then. I thought the technical definition was narrower than that.

Edit: Oh, the thing about unemployment benefits wasn't meant to imply that people enjoy receiving them. It's just that unemployment is measured based on how many people apply. Since people that are underemployed (at least in the sense of not getting full-time hours) can apply for benefits, their numbers can be measured. You're right to say it would be damn near impossible to measure the number who desire or are qualified for a better job, though.

 

[edward]

Never mind then. I thought the technical definition was narrower than that. You're right to say it would be damn near impossible to measure the number who desire or are qualified for a better job, though.

Actually it could be done fairly easily with an online questionnaire, but that would let the cat out of the bag on the American employment/underemployment situation.

The Department of labor, statistics gathering capability, is quite impressive. If a statistical analysis were to be done, it would show our economy in its true light and no one wants that to happen, especially Wallstreet.

Notice that in the extensive data contained in the link below, Underemployment is not even mentioned, yet underemployment is a much
more revealing statement of our true economy than employment.

http://www.bls.gov/

 

[russ_watters]

Current emploment rates mean little, underemployment isn't even measured in any meaningful way.

You are making a postivie claim (underemployment is increasing) that you then say there is no data to support. So on wha do you base that claim?

The fact of the matter is that income levels are rising across all income groups (http://www.census.gov/hhes/www/income/histinc/inchhtoc.html ). That, to me, is the most relevant piece of data on the employment situation The fact that people are unhappy with their level of employment is not an indication that the employment situation is a bad one. In fact, to me it points to an increase in the sense of entitlement, not a decrease in the strength of the job market. Put another way, the number of college graduates is increasing faster than the job market is expanding. But there's a catch - a large number of those college graduates have utterly usless degrees. I know many people who went to college and got useless degrees and are now unhappy with their level of employment. I am unsympathetic. Regardless though, their dissatisfication with their lives is not an indicator of a poor job market.

Notice that in the extensive data contained in the link below, Underemployment is not even mentioned, yet underemployment is a much
more revealing statement of our true economy than employment.

Why do you consider underemployment so important? To me, its just a perception that doesn't necessarily have anything to do with reality. Just because someone thinks they deserve a better job, doesn't mean they actually do deserve a better job. Ie:

We have to work at the jobs we have not the jobs we wish we could have.

I wish I had a Dodge Viper instead of a Mazda 6. Wishes are not a valid indicator of the strength of the economy.

 

[The Smoking Man]

To me, its just a perception that doesn't necessarily have anything to do with reality. Just because someone thinks they deserve a better job, doesn't mean they actually do deserve a better job.

Granted ...

It is when the cost of the education outstrips the ability to pay back student loans that you figure out the GOVERNMENT and your institution thinks your education is worth more than it is.

 

[The Smoking Man]

Granted ...

It is when the cost of the education outstrips the ability to pay back student loans that you figure out the GOVERNMENT and your institution thinks your education is worth more than it is.

Woah ... are we off topic or what!?

 

[russ_watters]

It is when the cost of the education outstrips the ability to pay back student loans that you figure out the GOVERNMENT and your institution thinks your education is worth more than it is.

No. Colleges are businesses. What they charge for their service is based on supply and demand, not any intrinsic value to their product. Demand is going up, so price is going up.

 

[The Smoking Man]

No. Colleges are businesses. What they charge for their service is based on supply and demand, not any intrinsic value to their product. Demand is going up, so price is going up.

Yeah, but ian't a loan guarantor .. government ... supposed step into see the possibilities of a loan being defaulted upon?

It isn't as if they can reposess your frontal lobe!

You don't guarantee loans to buy a BMW to run a pizza service so why do you guarantee loans to people who will eventually work at Mickey D's?

 

[russ_watters]

Yeah, but ian't a loan guarantor .. government ... supposed step into see the possibilities of a loan being defaulted upon?

Government isn't going to "step in" - they are already in. But to the question of whether government should use better judgement in providing of college loans to people who may not be able to pay them back, the answer is no. Government is not a business and college loans are a form of charity - a subsidy. They don't put much effort into ensuring they will be paid back because they aren't concerned with profit, they are concerned with sending as many people to college as they can. That's the purpose of government (backed?) college loans.

(caveat: I'm not sure if college loans come directly from the government or if they are just backed by the government, but the difference is immaterial.)

 

[Smurf]

in BC they come directly from the Government

 

[edward]

No. Colleges are businesses. What they charge for their service is based on supply and demand, not any intrinsic value to their product. Demand is going up, so price is going up.

Based on the total debt burden of graduates , colleges and universities should have booming profits, but many state affiliated schools are struggling.

Student loan debt is 85 percent higher among recent college graduates who took on debt while attending public four-year colleges than among graduates from a decade ago.

http://www.cepr.net/publications/debt_college_grads.htm


Google "student loans available" and then compare the number of hits with the number of students who are not earning up to their expected and potential salaries.
Then perhaps (but I doubt it) you will get an idea of what underemployment really means.

 

[Burnsys]

Google "student loans available" and then compare that with the number of students who are not earning up to their expected and potential salaries.
Then perhaps (but I doubt it) you will get an idea of what underemployment really means.

that is what i call "Connecting the dots"

 

[edward]

You are making a postivie claim (underemployment is increasing) that you then say there is no data to support. So on wha do you base that claim?

The link below is an 18 page excerpt from a book. Reading the first two pages should give you an idea of what I am talking about.

http://assets.cambridge.org/052181/0140/sample/0521810140ws.pdf

Data is hard to find and it sure as hell won't be found on a government web site. One easy source Russ; is to just talk to people. As far as nationwide statistical data, only the department of labor could do that and that is highly unlikely. It also would require a big clean up on Wallstreet when all of those "suits" deficated in their pants after seeing the results of a statistical analysis of Underemployment.

 

[edward]

Original topic outsourcing

There is much more to this topic than just the loss of jobs. The older persons who become unemployed must start again. And they of course must find new jobs. I know skilled workers who have been forced to take on menial labor and sales jobs. New entrants into the work force are not finding meaningful work.

Yes folks meaningful work is important to people, it is not just an Entitlement as some have stated, it is a part of human nature. For instance children born to parents who are unemployed or underemployed have a lower birth weight than children born to parents working at their full potential. (Journal of American Psychology)

Unemployment and Underemployment even effects ones health and productivity.

The link below has a short video on outsourcing.


http://www.rescueamericanjobs.com/

 

[BobG]

You are making a postivie claim (underemployment is increasing) that you then say there is no data to support. So on wha do you base that claim?

The fact of the matter is that income levels are rising across all income groups (http://www.census.gov/hhes/www/income/histinc/inchhtoc.html ). That, to me, is the most relevant piece of data on the employment situation The fact that people are unhappy with their level of employment is not an indication that the employment situation is a bad one. In fact, to me it points to an increase in the sense of entitlement, not a decrease in the strength of the job market.

True enough, although the chart that converts all income to 2003 dollars to take inflation into account is the most pertinent. It's what you can purchase with those dollars that matters most.

Since '67, the adjusted income for the poorest has increased 28%, the fourth fifth 25%, the middle 40%, the second fifth 57%, and the top fifth 74%. The problem is that people don't look at the long term trend when faced with a short term problem - not when short term is measured in years!

From 2000 to 2003, the adjusted income for the poorest fell 6%, the fourth fifth fell 3.6%, the middle fell 2.3%, the second fifth fell 0.5%, and richest fifth fell 0.7%.

Besides, it's not the numbers that have the biggest impression on people. It's the fact that outsourcing has started taking a new class of jobs - jobs the general public thought were secure career fields. That makes more than just those directly affected wonder what the future holds.

 

[russ_watters]

Google "student loans available" and then compare the number of hits with the number of students who are not earning up to their expected and potential salaries.
Then perhaps (but I doubt it) you will get an idea of what underemployment really means.

edward, I acknowledged the people percieve themselves to be "underemployed" - my argument that that perception does not reflect the reality of the US economic sitiuation, it simply reflects a growing sense of entitlement and growing number of people going to college because they think they should go to college (not for the sake of learning a specific trade to get a good job).

I guess we could fix this perception problem by offering less student loans - then less people would go to college and they wouldn't be overqualified for their jobs. Personally, I don't think that's the way to go...

I'm sorry, but its no one's responsibility but yours to get you the job you think you deserve. But what I can promise you is that if you (on average) perform as well as your parents, you will do better financially than they did.

Regarding that study from Cal, its a real eye-roller. Its an examination of the social effects of something it takes as gosphel: it isn't an attempt to prove the existence of an underemployment problem, it assumes it exists and discusses its effects.

 

[outsider]

There is much more to this topic than just the loss of jobs. The older persons who become unemployed must start again. And they of course must find new jobs. I know skilled workers who have been forced to take on menial labor and sales jobs. New entrants into the work force are not finding meaningful work.

I'm observing the same thing... but I don't agree with your feelings completely.

Yes folks meaningful work is important to people, it is not just an Entitlement as some have stated, it is a part of human nature.

Why do people want education? To feel "important" in society by qualifying themselves to do something with their lives to feel a sense of self satisfaction. Let's put it this way: there is a selfish motive. It is this self perception that disqualifies average jobs as meaningful work. So the definition of meaningful work is defined by each person. As an example we can use examples that people can somehow relate to: Government street workers, meter maids... etc... do people consider this meaningful work?

For instance children born to parents who are unemployed or underemployed have a lower birth weight than children born to parents working at their full potential. (Journal of American Psychology)

Unemployment and Underemployment even effects ones health and productivity.

The link below has a short video on outsourcing.


http://www.rescueamericanjobs.com/

Not everyone who completes training will receive the job that they were trained for. This is not a closed system where if there was one "meaningful" job available, they would only train one person to fill the position. Almost any monkey can sit through a class, memorize the info and pass an exam. Companies feel entitled to hire the most qualified candidate from their perspective. From a marketing standpoint, this may be that the staight C buxom blonde is hired over a straight A frumpy fat old black lady... the intrinsic value of a beautiful woman is far greater than the educational value from a business perspective. (also if you are too smart, you may easily get bored with work, or worse... you become a threat).

Since business and education (in most cases) are not connected, business has no responsibility to maintain the jobs that education promises it's students. Just the same way that if the marketplace isn't buying new computers... DELL will not buy more chips from INTEL. It's all based on needs. So no one is (technically) entitled to a job due to qualifications. When you pay for a meal at a restaurant you get a meal. When you pay for an education, you shouldn't expect a job.

Education to some degree gives it's students a false hope of reality, but that IS reality.

Every entity has it's own agenda...

 

[russ_watters]

BobG, I'm not quite sure what you are getting at, there - yes, incomes fell from 2000-2003. That's a reflection of the employment (unemployment) situation and is cyclical in nature. But if what edward was saying were true, incomes would be decreasing even as unemployment is decreasing. Since they are not, that makes the "underemployment" problem entirely a perception problem.

Outsourcing is an interesting problem because it typically affects (or appears to affect) entire specific fields, but not the economy as a whole. What we read in the papers is that 10,000 workers for a garment company lost their jobs due to outsourcing, but what you don't hear is that that company's profits rose so much as a result, it bought a retail chain (made-up, but typical example). If outsourcing was really hurting the economy it would manifest in higher unemployment rates.

 

[BobG]

Perception is everything. People can't be blamed for seeing a problem.

After adjusting for inflation, wages should increase a little over 1% per year (a little less for the lower income groups, a little higher for middle and upper class groups, with the richest gaining about 2% per year).

By time Reagan took office, wages had lagged quite a ways below what they should be compared to inflation. By time Reagan left office, wages were slightly ahead of where you'd expect them to be (in other words, the perception of his economy was affected as much by Carter's poor economy as his own steady growth economy).

By time Clinton took office, wages had lagged way behind again (Bush I's economy sucked!). The economy during Clinton's years were phenomenal! First, they naturally caught back from the Bush I years. Second, wages kept growing at a rate way above what could be sustained long term. Wage growth wasn't just above average during his presidency - it was double it's long term rate of growth!

If you think Clinton's a miracle worker, you believe that gain was real and should never be given back. If you think he was a lousy president, you salivate at what the economy is going to be like when the next president takes over. If you think he was fair to middling, or even just a little above average, you cringe at what's ahead for the economy.

In fact, a president inheriting a bad economy is probably destined to be a two-term president and a president inheriting a good economy is probably destined to be a one term president - the most recent exceptions are Carter who inherited a bad economy and left an even worse one; and Bush who inherited a great economy and had wages fall to below average by reelection time (in other words, the economy wound up doing even worse than expected).

Outsourcing does contribute to some worker's problems and 9/11 contributed to some of the economic problems. The main reason, though, is that wages have to fall back to that slow steady rate of gain.

 

[edward]

edward, I acknowledged the people percieve themselves to be "underemployed" - my argument that that perception does not reflect the reality of the US economic sitiuation, it simply reflects a growing sense of entitlement and growing number of people going to college because they think they should go to college (not for the sake of learning a specific trade to get a good job).

I guess we could fix this perception problem by offering less student loans - then less people would go to college and they wouldn't be overqualified for their jobs. Personally, I don't think that's the way to go...

I'm sorry, but its no one's responsibility but yours to get you the job you think you deserve. But what I can promise you is that if you (on average) perform as well as your parents, you will do better financially than they did.

Regarding that study from Cal, its a real eye-roller. Its an examination of the social effects of something it takes as gosphel: it isn't an attempt to prove the existence of an underemployment problem, it assumes it exists and discusses its effects.

When an older person who once was a software engineer is now selling shoes, it is much more than a problem of perception Russ. Talk to people Russ.

Cal didn't spend all of that money and energy on a perceived notion. Neither did the Journal of American psychology.

http://66.102.7.104/search?q=cache:...+workforce+investment+act+underemployed&hl=en

If the problem doesn't exist why was there a Work Force Investment Act passed in 1998? And why is its implementation currently hidden deeply withing the department of Labor?

Can you give me a link that indicates that the outsourcing of American jobs has improved the life of the average American?

 

[outsider]

When an older person who once was a software engineer is now selling shoes, it is much more than a problem of perception Russ. Talk to people Russ.

Cal didn't spend all of that money and energy on a perceived notion. Neither did the Journal of American psychology.

http://66.102.7.104/search?q=cache:...+workforce+investment+act+underemployed&hl=en

If the problem doesn't exist why was there a Work Force Investment Act passed in 1998? And why is its implementation currently hidden deeply withing the department of Labor?

Can you give me a link that indicates that the outsourcing of American jobs has improved the life of the average American?

I agree that outsourcing is hurting us at the core... but as the weather changes, H2O changes... one day your on top of the clouds... the next your a water droplet... some head to the ground... some head for the ocean... just depends who you are... (we have more control of our destiny than a water molecule...) But we are subject to the conditions in our environment is basically what I'm trying to say... change the environment!

 

[SOS2008]

I don't have time to catch up in this thread at the moment, and I've expressed my concerns regarding trade agreements, illegal immigration, and of course out-sourcing. Two incidents come to mind from personal experience.

I was in the technology industry for a company that provided IT consulting services (my division specialized in Oracle Applications). In the summer before 9-11 we acquired a new customer that did maintenance for the airline industry. Of course 9-11 hit the entire airline industry hard, but with the out-sourcing, this company went out of business all together. The chain reaction continued in that our company also lost them as a customer (and we lost an airline client too). At the same time we lost an important bid to a consulting company that "body shopped" work out to India. Oracle applications is very popular with manufacturing, and all our manufacturing clients were struggling to prevent lay offs and to stay in business let alone invest in IT.

Ultimately my company scaled back the Oracle division to the bare bones. I lost my job along with the many other people in the tech industry, and most of us are now employed beneath our abilities at a fraction of what we used to earn. But don't worry your pretty little heads about these things. I'm sure all your jobs are nice and secure.

 

[edward]

The pink slips and the underemployment are devastating to people. But there is much more to it than that, once an industry is lost it is lost forever.

The health of U.S. aerospace employment also has an affect on our nation’s security. As outsourcing, co-production, and other similar activities grow in the defense aerospace industry, U.S. aerospace employment shrinks. In addition to the direct impact on employment, U.S. dependence on other countries for aerospace defense products presents at least two other issues: first, dependence on other countries for the manufacture, development, or assembly for our defense products is as unacceptable as it is unwise, especially in a post-September 11, 2001 world. What happens when our allies become our enemies? What happens when supply chains become disrupted by unpredictable events? Second, as skilled workers in the defense industry lose their jobs, the deskilling of America’s defense workforce continues at a dramatic rate. If and when we as a country need to rebuild our defense industry, skilled workers vital for the success of such an industry will not be available.

http://www.uscc.gov/hearings/2005hearings/written_testimonies/05_01_04wrts/herrnstadt_owen_wrts.htm

How much of our economy can we afford to give away? It appears that few care and no one is counting. The total industrial losses in the USA are "staggering" yet I can't find a total.

Individual totals for industries can be found, for instance The aerospace industry alone has lost 600,000 skilled jobs since 1990. But the problem is that all industry is linked and interdependent in our economy.

It is a bit like the illegal alien situation, they just keep coming , but how many is too many when no one is counting?

 

[BobG]

Of course 9-11 hit the entire airline industry hard, but with the out-sourcing, this company went out of business all together.

This is the real effect of outsourcing jobs overseas.

Outsourcing of jobs has happened for a long time, whether it's Japanese car companies importing cheaper and better products into the US or whether it's US companies building factories overseas (the only difference is whether the profits are going to an American company or a foreign company). The rate probably increased in the '90's when companies couldn't hire enough qualified employees, especially in the IT field. We just didn't notice it since US wages were rising so fast.

As soon as the economy takes a downturn and there's less jobs available, we start noticing how many jobs are being outsourced. It's not that outsourcing caused the job shortage - it's that outsourcing makes it a little bit worse. Especially if wages were pushed above the normal market value during the boom years - there's more pressure to get out of overinflated wages at least until the market catches back up.

The only real difference is that there are countries that can suck up some of the higher skilled jobs - they didn't always have that capability. Unless they had invested in a good education system for a couple of decades, they were pretty much limited to picking up jobs in unskilled labor. Now, some workers who put quite a bit of effort into acquiring some rare skills and knowledge are finding they're not immune to the ups and downs of the US economy anymore. They're having to compete in a global market just like like the guys in the factories.

The US economy is still the overriding factor into the jobs and wages that are available. Outsourcing has an effect, but watch how the problem 'disappears' as soon as the economy starts adding jobs at its normal pace. Especially if China's and India's economies 'adjust' back to realistic growth rates - economies that grow as fast as their economies are, or even as fast as ours grew in the '90s, tend to see a drastic snap back to reality.

 

[edward]

So, no one believes that underemployment exists. OK But tell me this, is an engineer who is working three partime jobs to make ends meet overemployed?

How do we categorize a person who used to work in a Chrysler engine factory, then lost his job when the new Hemmi factory was built in Saltillo Mexico, and he is now working at Walmart part time and clerking the graveyard shift at a Circle K?

All of the big economic theories are just so much bull to a guy like that. He knows the job he loved is not going to return during the next snap back.

American workers need to have jobs that they can depend on. Without dependable employemt they are not as productive. When we lose our productivity edge, more jobs go off shore. The cycle will then continue until there is nothing left here but Wonderbread, toilet paper, and Coca Cola production.

 

[FredGarvin]

Plain and simple, the types of jobs that existed 20-50 years ago are not around any more. The sooner one realizes that the better. I have had to realize that I need to be extremely flexible with what I expect from my employer now. The climate changes so fast in aerospace that if you have the mentality that many older individuals do, i.e. this is my job, I have done it for so many years, this is how it will be, then you are a dinasaur. My company just went thru two purges and a lot of older folks "retired" mostly because of their refusal to become flexible and to learn new jobs and skills. Granted, a lot were lost simply to reduce headcount. I think that's unavoidable if you don't have the buisiness coming in.

The automotive companies are going through that now. The dim lights are slowly lighting up that the days of wasteful over employment are gone. People that had one very specific job that kept them occupied, maybe, 20-30 hours a week are being hunted down and eliminated. Pretty soon I am hoping the unions follow suit.

 

[russ_watters]

When an older person who once was a software engineer is now selling shoes, it is much more than a problem of perception Russ. Talk to people Russ.

Anecdotal evidence is the biggest fallacy there is, edward. It does not provide an accurate total picture.

Can you give me a link that indicates that the outsourcing of American jobs has improved the life of the average American?

That sort of thing is not a direct corellation. What I have provided is the evidence that it has not resulted in a worstening of the country's overall employment situation. Unemployment is down (long term) and incomes are up (long term). Could it be more better without outsourcing? I don't know, but that's not what I'm trying to prove anyway. What I have shown is that it is not worse, as you seem to believe.

So, no one believes that underemployment exists.

No one said that, edward, because it most certainly does exist. What I'm saying is that it is not the problem you percieve it to be.

Plain and simple, the types of jobs that existed 20-50 years ago are not around any more. The sooner one realizes that the better. I have had to realize that I need to be extremely flexible with what I expect from my employer now.

This is related to one of edward's points earlier. To the 55 year old worker who loses a job because the market has changed, it is unfortunate, but its simply a reality that markets change and that fact cannot be seen as a flaw in the market. Its part luck, part foresight, and part just a planned risk.

Its nice being young (I'm 29), which means I have a lot of options and not a lot of responsibilities, but nevertheless, I'm at the age when it is time to make the decision on where I want to spend the next 30 years of my life. Part of that decision is choosing a field which I think has some stability in it. IT is a field that has had a lot of growth, but also a lot of change. People who pick it choose to take the risk that the industry could change to something other than what it is today. Actually, that it'll change is pretty much guaranteed - the onus is then on the employee choosing to work in the industry to take the responsibility of changing with it.

 

[russ_watters]

Bob, we seem to agree more than we disagree in this thread, but I just wanted to comment on this:

Perception is everything. People can't be blamed for seeing a problem.

Part of the reason I'm a Republican is that I'm not a big fan of perception. Perceptions can be faulty. I prefer to base my opinions/decisions on reality. Now, perhaps that's naive (even idealistic?) of me, and I fully understand that in some things (politics, economics), perception often makes reality, but IMO, that's just because people allow their perceptions to fool them.

Unrelated comments...

If you think Clinton's a miracle worker, you believe that gain was real and should never be given back. If you think he was a lousy president, you salivate at what the economy is going to be like when the next president takes over. If you think he was fair to middling, or even just a little above average, you cringe at what's ahead for the economy.

Actually, I think Clinton sucked, but the internet boom produced a great economy. So while I don't think that kind of growth can be sustained, I'm still quite optomistic for what the next few decades has in store for us.

In fact, a president inheriting a bad economy is probably destined to be a two-term president and a president inheriting a good economy is probably destined to be a one term president

A true irony, that not many people understnd.

 

[outsider]

So, no one believes that underemployment exists. OK But tell me this, is an engineer who is working three partime jobs to make ends meet overemployed?

I believe there is such a thing... it is real but I think that people are resilient, or don't mind a good shafting... it's definitely an issue.

American workers need to have jobs that they can depend on. Without dependable employemt they are not as productive. When we lose our productivity edge, more jobs go off shore. The cycle will then continue until there is nothing left here but Wonderbread, toilet paper, and Coca Cola production.

I guess as an immigrant, I don't take these things for granted. This goes back to a sense of entitlement.

 

[russ_watters]

I guess as an immigrant, I don't take these things for granted. This goes back to a sense of entitlement.

See, this is why I'm such a big fan of immigration. Immigrants often see the opportunities in the US as a gift and don't take them for granted, while many people born here see them as entilements and do take them for granted.