# News Should outsourcing be stopped?

1. Nov 21, 2005

### wasteofo2

I think it's pretty obvious that from now until global wages are competed to relatively equal positions, that jobs will continuously be outsourced from currently rich nations to currently poor nations. With this, it seems pretty obvious that the western world will have to live with a decreased standard of living during this whole re-adjustment period when India and China are building up their economies.

Lots of people in the USA have been calling for protective measures to stop American jobs from going overseas.

I think this is really selfish. Maybe it's because I'm not really nationalistic or anything, but when you look at the immense good the outsourcing of "American jobs" has done for China and India (along with all the other smaller nations that the west is outsourcing to), I think that the negative consequences America has suffered and will suffer are more than justified. Wages will be depressed in the USA, and unemployment will likely rise, but well over 1/3 of the world is being elevated to unprecedented levels of economic prosperity. That's more than worth it to me.

It seems to me that everyone who wants these protectionist measures is really just ego-centric and doesn't even care about all the good it's doing throughout the world.

So should governments take steps to keep domestic jobs at home, or is free-trade a justifiable position for governments to have?

2. Nov 21, 2005

### Smasherman

Outsourcing very effectively makes the super-rich richer (since they own the companies outsourcing), the very poor richer (third-world), and the wealthy poorer (USA). My beef with outsourcing is that more wealth goes to the top than anywhere else. Now, if we outsourced with a more restricted method, I'd be happy (ie, the rich don't get richer).

Oh, also outsourcing bypasses environmental protections, which hurts everyone.

(note: sorry if my logic is wrong, but I've got a movie to go to really soon, so this is off the top of my head)

edit: Outsourcing should be allowed if regulated.

3. Nov 21, 2005

### wasteofo2

The only reason more wealth goes to the top is because there are still huge untapped labor markets. Once outsourcing has run its course, and the whole world is essentially one market, global labor will invariably demand higher and higher prices as there is less and less of it available (less unemployed people who'll work for next-to nothing that is), and those higher wages will cut right out of the profits of the super-wealthy business owners.

Though the environmental thing is a good point, but forcing ecological-friendly methods of production would likely slow growth in the third world a bit.

How do you propose to "regulate" outsourcing? Government control of which jobs may and may not leave a country?

4. Nov 21, 2005

### TheStatutoryApe

The only reason outsourcing bypasses environmental protections is because the other countries don't have laws regulating environmental damage concerns. We can't make people in other countries abide by the laws in our country. You could tax profits incoming from facilities in countries where they do not have environmental restrictions but this does no good for the environment of that particular country. It would only make our tax revenue richer at the expense of another country's environment and leave them to deal with the consequences and to take care of the bill for cleaning it up later on down the road.

5. Nov 21, 2005

### SOS2008

The key words are "free" trade versus "fair" trade, and that goes for rich and poor nations and how each exploit and/or benefit from globalization.

Multinational companies are responsible for exploitation of third world labor, as well as questionable practices by international organizations (World Bank, IMF, etc.). At the same time China’s devaluation of its currency and piracy of U.S. technology is irreprehensible. The U.S protects agriculture, and rightfully so because food production is a national security issue (and even so, trade in such raw goods does little for trade deficits).

http://www.msnbc.msn.com/id/10019829/site/newsweek/page/3/ [Broken]

Part of the problem is differences in population growth – “Asia's impoverished masses now exceed the region's total population at the end of World War II.” In “Asia's three most populous countries—China, Indonesia and India-poverty issues now drive their politics within.” The rich countries aren’t responsible for population growths in other countries. Not to mention poor governance, often associated with corruption (e.g., south of our border).

We often provide aid, hopefully along with management of the aid. But at the end of the day, we need to manage our economies too (and not give away the farm so to speak), because if we go down, other countries will go with us.

Last edited by a moderator: May 2, 2017
6. Nov 21, 2005

### loseyourname

Staff Emeritus
I think he's talking about profit-caps and worldwide environmental regulations. His question to answer, though.

7. Nov 21, 2005

### Staff: Mentor

Agreed.
I don't agree. So far, the effect of outsourcing is not noticeable in overall employment statistics - ie, unemployment has not increased by a measurable amount, if at all, due to the effect (say, in the past 10 years) of outsourcing.

I think it is an assumption that outsourcing is/will harm the economy, not an established piece of data.

Though perhaps I was reading too much into your statement and you just mean that standards of living could be increasing faster - not that they are actually declining in the absolute sense. That I would tend to agree with.
I agree - take note: when I say that I think everyone should be able to share in the American Dream, I mean it. It isn't just about the goverment, at least as important is the prosperity.
Ironically, such protectionism would create a huge backlash internationally and domestically. It's a damned-if-you-do, damned-if-you-don't thing: we get blamed for inflicting these low-wage jobs on foreigners, and we'd get blamed for keeping those low-wage jobs away from them too. I think the status-quo is fine.

8. Nov 21, 2005

### Zlex

wasteof02,

The question is not only should, but can it be stopped.

Hey--gradients drive everything. Did I ever mention that?

Another factor is the lubricity of the Internet, but even before that, the nature of many of the 'jobs' in the new intellectual frontiers are such that physical location is not a factor at all. For example, for the past 20 years or so, where I live has nothing to do with what I do to make a living.

I could just as well live in India.

Lather, rinse, repeat. In some markets, in some economies, the concrete battleship days are gone. There are no steamships pulling into ports, waiting for customs officials. The borders are gone. Gradients in these economies without renewed effort to advance them will naturally deteriorate.

But the good news is, in these new massless intellectual frontiers, there are no 'zero sum' resource considerations; they are essentially massless, but they are not effortless, and that is the new paradigm which (some) Americans are having trouble adjusting to. In the new economic frontiers, little mass, little material, and the kind of 'energy' demanded is purely intellectual.

With the lubricity of the Internet--near instantaneous point to point transport of intellectual content from any point on earth to any other point on earth--there are no barriers to competition anywhwere on the face of the earth.

The sooner more of us figure this out, the better. Only Draconian measures could begin to even try to halt this. But, with this bleeding of purely intellectual effort comes the collateral bleedoff of conventional material effort. It's not that material effort is magically transported through the ether, but rather, the ability to marshall and coordinate material effort is magically transported through the ether.

None of which is going to be muzzled. Nobody is going to be able to tell the folks in India, "Hey, you there, you cannot do that for $5/hr because I want to charge$125/hr for it over here." If the folks in India are able and willing to do the same thing for $5/hr, then the folks here watning to charge$125/hr are just going to have to climb the hill and come up with something actually worth $125/hr, and stop trying to resell the same bitmap dancing engines to unsuspecting consumers just because it's the easy thing to do. ie, gradients drive everything. The grinding of gears we are hearing is, as someone once coined, the sound of paradigm shifting without the clutch. our focus should be on the value we bring to the marketplace, not the ease of scraping up protected value from the marketplace. ie, entitlement, as in, to riding out our cushy, protected, isolated marketplace, artificially shielded from other naked sweaty apes just like us who definitely have similar wants and needs and undoubtedly have the ability to offer similar value. And then, I wish it were that simple. Because, some naked sweaty apes are willing to sell their kids into the equivalent of slavery for peanuts a day, take every environmental shortcut possible to claw their way to the top--just like we here once did, and so on. As well, you can't look at the great panapoly of naked sweaty ape endeavours and not notice a marked tendency to lean towards, if not outright crime, a driving desire to cut every corner and look for the freebie; what applies here, applies everywhere. There's a spectrum of effort from trying to function efficiently/productively to agressively taking shortcuts to targeting 'goodenuf' to foisting crap to outright scam, finally to crime and outright thuggery. At one end is calculus, at the other end is crime. Old saying, crime is easier than calculus; that's why it will always be with us. There's another old saying, that is significantly flawed; "crime doesn't pay." In fact, crime pays very well; that is the problem. It only does not pay well if civilization bands together and makes a concerted effort to enforce costs to crime. That works in the context of a community, a state, a nation, because each of those units of civilization has a governing authority with a clear cut license to apply superior violence and enforce law, make crime pay. In 'global' economies, the 'community' is the world. The jury is way still out on the concept of 'world governing authority,' and the early results look grim, indeed. And, there is the rub with 'global economies;' local/national 'enforcement' authorities are pretty much going to enforce the law, locally, to their own benefit, or at least, on their own terms and schedule. For example, when Nixon created the EPA, it was at a time and cultural moment when we could afford such a luxury. A hundred years earlier, was not around, we had bidness to take care of. We could afford the EPA in the '70s. We could not afford the EPA in the 1870s. So, for us to look at China in its present stage of development and tsk,tsk about how it manages its development and polices itself is forgetting how we got to our present affluent state, which was, messily. I think this much is certain; what happens in the coming century will be very similar to what happened in previous centuries; imperfect naked sweaty ape goings ons, at best. 9. Nov 21, 2005 ### Evo ### Staff: Mentor Most of the "outsourcing" of jobs has been in the support and customer service area. Making clothes or manufacturing, is not "outsourcing". "Outsourcing" is usually in referrence to BPO's (Business Process Outsourcing). American's demands of better service, lower costs and high returns on investments have driven these jobs overseas. You just cannot get intelligent help within the US for a reasonable cost. I have to point the finger at American's for being the major driving factor behind outsourcing. Wasteof2, are you referring to outsourcing or moving manufacturing, etc, oversees? Last edited: Nov 21, 2005 10. Nov 22, 2005 ### Ivan Seeking Staff Emeritus With one major exception IMO, rarely if ever have I gotten good tech support from groups overseas. What I have experienced, and I deal with this sort of thing daily at times, is underqualifed or undertrained people following troubleshooting flow charts. If the chart doesn't tell them what to do, I get the runaround. I could tell you horror stories about my DirectPC satellite internet connection - support in India. It was critical that I have the service for work and we couldn't get DSL yet, but somewhere after 100 hours, I lost track of time spent on the phone with tech support. And every time I called, we had to start from scratch all over again. Anyway, that's just one example but this happens for many products that I deal with. American support can be almost as bad, but almost every US company has someone who really knows their stuff. But it takes time to groom a good support tech, and with time comes higher wages. So my idea is that in part, outsourcing is a good way to lower standards without anyone noticing except the frustrated customers. If I took a group at support engineers from some place such as Rockwell, and replaced them all with entry level college grads, I'm sure that cheaper support could be provided in the US as well as overseas. Last edited: Nov 22, 2005 11. Nov 22, 2005 ### TheStatutoryApe I've had the same trouble with american based customer service departments. 12. Nov 22, 2005 ### Evo ### Staff: Mentor I've had superior service from India, they are at least polite and speak better English than some of the American service reps I've spoken with. I have never spoken to a rude person in a BPO. Of course they're probably thinking "another brain dead American". It depends which BPO your American company contracts with. I watched a PBS program on BPO's in India and all have at least an undergraduate degree. Most Americans in the same position are high school drop outs. 13. Nov 22, 2005 ### Ivan Seeking Staff Emeritus Nearly all support people that I deal with must be engineers for entry level. 14. Nov 22, 2005 ### Ivan Seeking Staff Emeritus Perhaps US standards are dropping in an effort to keep up with lower standards from the competition. 15. Nov 22, 2005 ### Smasherman By regulation I mean a cap on how much profit can be gained from outsourcing. Really I'd prefer forcing companies to pay workers a certain amount, and if the company leaves, they have to give their infrastructure to the country (intact). Scenario: A company builds factories in a country (outsourcing, specifically). This raises the standard of living in that country, thus raising the wages. When the wages raise up to a certain point, it becomes more cost-effective to do business in another country. So the business packs up and does business elsewhere, leaving the first country without jobs (and thus quickly impoverished). 16. Nov 22, 2005 ### Ivan Seeking Staff Emeritus In my world, here in the US, there is usually at least one hot shot, but you have to get to him or her, and that isn't always easy. 17. Nov 22, 2005 ### Evo ### Staff: Mentor Pffftthbttt. I'm talking about consumer every day help desks. At work "my" American help desk guy has a PHD. Pffftthbttt!!!! I forgot in what. He is sharp. Last edited: Nov 22, 2005 18. Nov 22, 2005 ### Ivan Seeking Staff Emeritus As for consumer level support...less a few calls for Windows and the one example of DirectPC, I have almost no experience. But I must say, the DPC experience was something else. If I hadn't needed it so bad it would have been cancelled the first week. 19. Nov 22, 2005 ### SOS2008 Not quite an apple-to-apple comparison, because 100 years ago people didn’t know they were making a mess. We know now, and must ask if we can afford to keep making messes. Outsourcing or off-shoring, either way it results in loss of jobs for Americans. In time, the same thing happens in these other countries. (Edit: And then the companies move on to a new location.) If it is the same program I watched, these people have left jobs in science, medicine, or what have you to work for the American BPOs. So BPO jobs in America are lost, not to provide work for those abroad who aren’t already earning a living, but to attract them away (some had as many as three offers) to do jobs below their capability just to earn a little more. Now, what’s wrong with this picture? Last edited: Nov 22, 2005 20. Nov 22, 2005 ### Astronuc Staff Emeritus I was listening to a program this morning about an attempt to unionize the 'call center employees' in India. They make$3000 /yr, as opposed to the average income in India - $500 /yr. The median income in the US is about$44,473 /yr (2002-2004).
http://www.census.gov/hhes/www/income/income04/statemhi.html [Broken]

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21. Nov 22, 2005

### Zlex

It was just one example in a long line of examples of our messy rise. Like...slavery.

22. Nov 22, 2005

### Zlex

Hey, it is not just the high-paying jobs.

We can't even just sell each other hamburgers and call it a day; dirt cheap bandwidth has resulted in a world where fast food drive thru jobs -- you know, the idiot at the other end of the speaker that screws up your order most of the time?-- are being replaced by digitized audio/video fed to some other point anywhere in the world, where the order is accurately processed and digitally sent back to the restaurant/kitchen, along with a picture of the person who drove up, to match the order.

So, cheap bandwidth means that it no longer matters if the person handling your order is 20 feet away and unseen or 12000 miles away and unseen; economics are determining that the best labor at the cheapest price is filling the need.

There are actually local restaurant chains doing this as we speak, and the results have been a significant increase in the accuracy and speed of order processing. Within 5 years, I predict, nearly every Wendys, McDonalds, and other major chain will process drive thru orders like this.

How quickly will America react to the new realities? Not very quickly. For example, and this trend is already happening, is well in place, 95% of accounting tasks are already readily exported overseas; the number of US returns actually prepared overseas quadruples every year. A sanitized copy of US return data (name/SS removed) is digitized and sent overseas, where experts in every US state tax laws complete the require returns cheaply and transmit back to the US, where the individual specifics are remerged. No actual accountant in the US actually fills out the returns. Large accounting firms increasingly are glomming onto this, and the practice will diffuse out to smaller and smaller firms, as a commodity. India/China etc. are able to train and crank out accountants to do this kind of rote form completion in huge numbers; they have the bodies able and willing to be trained to do it, they are not being sent to $40,000/yr 4 yr schools for this purpose, and they work at it accurately, diligently, and efficiently. And, I've been told, the number one US undergraduate degree is: accounting. Just in time to compete with$5/day labor.

How fast does America wake up to this coming reality? In theory, the very engine of its creeation is the engine of its discovery and solution, except for one major difference; the motivations, expectations, and work ethic of the populations involved. Listen to us; 300,000,000 of us have all come to expect that our gov't is going to turn some magic handle/switch and fix our economies for us. Meanwhile, like at no time before, the balance of the world's 6 billion is able and willing to convert their hunger into eating the lunch we once believed was marked 'RESERVED: USA.'

I guess we'll see.

23. Nov 22, 2005

### Polly

The following article seems to be a natural expansion of your sentiment. I probably would not have posted it if it were not for what you have written.
http://www.lewrockwell.com/englund/englund29.html [Broken]

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24. Nov 22, 2005

### SOS2008

On occasion I go to a Wendy’s near my office. One day, all of a sudden all the workers are Hispanic, and because their English was so poor, I had to pull to another window to finally find a person who could respond to my question. These young adults who can’t speak English--if they were here legally, wouldn’t they have learned English in school? IMO, this is unacceptable, and no wonder teenagers are hardest hit with unemployment. And without these kinds of jobs, how are they to gain experience to enter the workforce as adults?
Good article, and I agree with a lot of it. On the news yesterday the discussion was about GM and how they produce poor quality, gas-guzzling, unimaginative automobiles. They’ve got to change or go under. Also, I’ve mentioned in other threads how kids stay (or return to) living with their parents until a much older age now. I agree they want to live at a standard to which they’ve become accustomed, and often are unwilling to pay dues to get there on their own. However, the article mentions the older, skilled workers. The problem is these workers are losing their jobs--once again, very unacceptable.
It’s not just a welfare mentality that is the problem. Many pro-capitalist Americans who are comfortably delusional about the safety of their jobs believe the American Dream will always be there, and there’s plenty to go around. These people focus on statistics (rather than the writing on the wall) to argue that all is well. To this point, this was reported yesterday on CNN:

http://transcripts.cnn.com/TRANSCRIP...21/ldt.01.html [Broken]

Has anyone considered that companies of the world are causing more and more workers to live at poverty levels in exchange for higher and higher profits for themselves? Has anyone considered this to be the result, rather than finite resources being enjoyed by all?

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25. Nov 22, 2005

### wasteofo2

I'm referring to anything that involves the movement of jobs from one country to another. Perhaps outsourcing isn't the technically proper term for all such movement of jobs, but that's rapidly the definition it's taking on.