Should outsourcing be stopped?

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The term ,outsource, seems to be in the eye of the beholder. There are many Chinese and other Asian companies online who offer to provide cheap manufacturing of goods. They call it outsourcing and I agree.

BaySource was formed as a venture recognizing our economy was now more than ever, operating as a global system of trade. BaySource utilizes a broad network of manufacturers based in mainland China, Hong Kong and Taiwan to assist small to mid-size companies in strategic outsourcing and manufacturing options with low cost country providers.
http://www.baysourceglobal.com/
http://www.spartronics.com/

A number of problems exist with this type of outsourcing of manufacturing.

The USA loses jobs.

The trade deficit , especially with China, is totally out of control. It is getting to the point that tyring to find a consumer product that is not made in China is nearly impossible. Last spring I was suprised to see that GE window air conditioners are now made in China.

And from what I have read this is just the beginning of "large ticket item" production that will be outsourced.

And perhaps most importantly, we have outsourced our manufacturing technology to an extent that too many CAD, CAM, and R&D jobs no longer exist. If the jobs do not exist, no one will train and study to be capable of performing those jobs in our economy.

This makes it incredibly difficult for the USA to ever resume the manufacture of consumer products.

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edward said:
The term ,outsource, seems to be in the eye of the beholder. There are many Chinese and other Asian companies online who offer to provide cheap manufacturing of goods. They call it outsourcing and I agree.
http://www.baysourceglobal.com/
http://www.spartronics.com/
A number of problems exist with this type of outsourcing of manufacturing.
The USA loses jobs.
The trade deficit , especially with China, is totally out of control. It is getting to the point that tyring to find a consumer product that is not made in China is nearly impossible. Last spring I was suprised to see that GE window air conditioners are now made in China.
And from what I have read this is just the beginning of "large ticket item" production that will be outsourced.
And perhaps most importantly, we have outsourced our manufacturing technology to an extent that too many CAD, CAM, and R&D jobs no longer exist. If the jobs do not exist, no one will train and study to be capable of performing those jobs in our economy.
This makes it incredibly difficult for the USA to ever resume the manufacture of consumer products.
Why is that a bad thing though? So the USA loses some prosperity, but it's the richest nation in the world. Think of it from the perspective of the people in poor countries who are getting these jobs. They're being lifted out of abject poverty, while the U.S. is just being knocked down a few notches. Even in the U.S., those who have no job at all have a decent social welfare system; people don't have things like that in these poor countries that are being outsourced to.

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Astronuc
Staff Emeritus
wasteofo2 said:
They're being lifted out of abject poverty, while the U.S. is just being knocked down a few notches. Even in the U.S., those who have no job at all have a decent social welfare system;
The problem is while the US economy is knocked down a few notches, those at the bottom feel the brunt - in some cases of abject poverty.

There is a common myth that those on welfare have it easy.

That is certainly not the case. Malnutrition, poor quality housing, lack of medical care, take a great toll on the poor. And then there is the drug and other social problems on top of that.

I think it is great for the poor in other countries to get good jobs, but simply moving jobs to the cheapest source is not the answer. The global economy needs to provide a 'good' standard of living for all, not just those at the top.

-----------------------------
As for terminology outsourcing jobs beyond national borders is sometimes terms 'off-shoring', as in moving jobs offshore - which really means overseas.

The social ramifications of 'off-shoring' can be seen within the US. During the post WWII period, manufacturers encouraged people from the south to move north to work in factories. Then in the 1970's as labor costs increased, factories, and their jobs, moved south to cheaper labor. All those people and their families who had moved north were then stranded without jobs.

Now the cheaper labor is overseas, and so the manufacturers move to those labor markets leaving labor stranded yet again. The problem will be that when the jobs are lost, their economic power to consume is also lost, so there will be less demand for consumer goods like automobiles, large TV's, durable goods. There will come a time when the consumer demand will necessarily drop.

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Astronuc said:
Now the cheaper labor is overseas, and so the manufacturers move to those labor markets leaving labor stranded yet again. The problem will be that when the jobs are lost, their economic power to consume is also lost, so there will be less demand for consumer goods like automobiles, large TV's, durable goods. There will come a time when the consumer demand will necessarily drop.
Either that... or people will stretch their credit to the limit and go deep into debt, while the demand will hover around the same level. There already are quite a few people in America who are now more or less indentured servants to creditors.

motai said:
Either that... or people will stretch their credit to the limit and go deep into debt, while the demand will hover around the same level. There already are quite a few people in America who are now more or less indentured servants to creditors.
The debt statistics for Americans are staggering.

Consumers owe nearly $2 trillion American consumers owed a grand total of$1.9773 trillion in October 2003, according to the latest statistics on consumer credit from the Federal Reserve. That’s about $18,654 per household, a figure that doesn’t include mortgage debt. The number is up more than 41% from the$1.3999 trillion consumers owed in 1998.
http://moneycentral.msn.com/content/SavingandDebt/P70581.asp

Astronuc said:
The problem is while the US economy is knocked down a few notches, those at the bottom feel the brunt - in some cases of abject poverty.
There is a common myth that those on welfare have it easy.
That is certainly not the case. Malnutrition, poor quality housing, lack of medical care, take a great toll on the poor. And then there is the drug and other social problems on top of that.
I didn't mean to imply being abjectly poor in the U.S. was glorioius by any means, but it's certainly better than being abjectly poor in India. Even though life is ****ty, it's not as if you're living off muddy water infested with parasites.
Astronuc said:
I think it is great for the poor in other countries to get good jobs, but simply moving jobs to the cheapest source is not the answer. The global economy needs to provide a 'good' standard of living for all, not just those at the top.
Why isn't that the answer? Jobs get provided for the very poorest people because the rich people are willing to buy what they make. Eventually, the rich people will buy so much from poor people, that wealth will re-distribute itself so that both groups of people are on more or less equal footing. It just takes time; there is no instant formula for economic prosperity.

Astronuc said:
As for terminology outsourcing jobs beyond national borders is sometimes terms 'off-shoring', as in moving jobs offshore - which really means overseas.
The social ramifications of 'off-shoring' can be seen within the US. During the post WWII period, manufacturers encouraged people from the south to move north to work in factories. Then in the 1970's as labor costs increased, factories, and their jobs, moved south to cheaper labor. All those people and their families who had moved north were then stranded without jobs.
And if the factories had stayed in the north, the wages for the workers would've dropped as high salaries took more and more money out of corporate pockets. Businesses like factories tend to migrate towards where there is cheaper labor, and cheaper labor tends to migrate towards where there are many jobs. If labor migration fails, then business migration picks up the slack and jumps into labor markets which don't have much job competition in them. Capitalism is dynamic, and people need to constantly readjust to changing job markets, as well as corporations need to constantly adjust to changing markets for goods and services. Some people are left behind in the process, and the progress includes new people.
Astronuc said:
Now the cheaper labor is overseas, and so the manufacturers move to those labor markets leaving labor stranded yet again. The problem will be that when the jobs are lost, their economic power to consume is also lost, so there will be less demand for consumer goods like automobiles, large TV's, durable goods. There will come a time when the consumer demand will necessarily drop.
It's not as if there is a static amount of jobs out there, and X jobs created in India means X jobs lost from America. One of Capitalism's main trends is to expand itself. As businesses expand and hire more people, the richest people (owners of factors of production) spread the wealth around by paying wages to the poorest people. Eventually, the poorest people get paid enough wages collectively that they become well off, as happened during America's industrial revolution. Then these well-off people can finance more expansion into cheaper labor markets. Like jobs, wealth is not static. It's not as if wealth can only be spread so thin, and mean prosperity can never increase. Wealth can be created through innovation, and this process is constantly occuring. As long as people think of new ways to make money, or cheaper ways to do things, more wealth will be created. And as more wealth is created, there's more demand for goods and services in general. This leads corporations to seek out new, cheap, labor markets, as previously cheap labor markets have by then been risen to higher standards, and are financing more corporate expansion through their purchases.

Sure prosperity in America will probabally decline a bit as India and China really get moving, but in the long run, I see no reason why consumer demand will necessarily drop. Care to explain that to me?

SOS2008
Gold Member
wasteofo2 said:
Why is that a bad thing though? So the USA loses some prosperity, but it's the richest nation in the world. Think of it from the perspective of the people in poor countries who are getting these jobs. They're being lifted out of abject poverty, while the U.S. is just being knocked down a few notches. Even in the U.S., those who have no job at all have a decent social welfare system; people don't have things like that in these poor countries that are being outsourced to.
First is the U.S. trade deficit and foreign debt, which can then have other negative impacts on the economy, such as inflation. At the minimum it creates national security problems. Look at Bush’s visit to China and how powerless he was in trying to negotiate with them, because they hold most of our debt.

In the meantime the U.S. is the largest market (for countries like China), but only if people here have income to spend. As posted above, Americans are also in debt on an individual basis—most families are two paychecks away from bankruptcy. How will people continue to consume if they aren’t earning the money, and where will the revenue for social welfare come from if people aren’t earning money, etc., etc., etc.

But the main question is whether outsourcing/off-shoring/foreign labor is really helping the poor of the world. IMO it is helping the multinationals (and who ever else is at the top of the feeding chain) and in the long run masses everywhere will be worse off.

SOS2008 said:
First is the U.S. trade deficit and foreign debt, which can then have other negative impacts on the economy, such as inflation. At the minimum it creates national security problems. Look at Bush’s visit to China and how powerless he was in trying to negotiate with them, because they hold most of our debt.
You misunderstand my position. I realize that the U.S. is being harmed by outsourcing. You seem to think that I'm advocating outsourcing as good for the U.S., but I'm not. I'm advocating it as good for the world as a whole, not necessarily one particular country. In my mind, I don't care that the U.S. is less prosperous if it's helping billions get on level with the rest of the world.

The U.S. trade deficit and foreign debt is certianly bad for the U.S. in the short run, but from the other side of the coin, the U.S. is killing itself to pump money into these poor countries, helping them grow even faster.
SOS2008 said:
In the meantime the U.S. is the largest market (for countries like China), but only if people here have income to spend.
So long as there's still a tremendous disparity between American wages and Chinese and Indian wages, America will still finance Chinese and Indian growth. If America plunges into another Great Depression, naturally China and India would suffer simmilarly, but so long as people are being paid some approximation of what they're being paid now, they'll spend more than enough money to finance China and India's growth. Think of all the profits a company makes selling Chinese manufactured goods in America, and with that money, think how many more factories that company could create. The profit margin is great, and the amount they can sell at such low prices makes it even better for them.
SOS2008 said:
As posted above, Americans are also in debt on an individual basis—most families are two paychecks away from bankruptcy. How will people continue to consume if they aren’t earning the money, and where will the revenue for social welfare come from if people aren’t earning money, etc., etc., etc.
You're looking at this from a very American perspective. It's not as if people in America are on the verge of having NO MONEY whatsoever. Sure Americans are in debt and don't know how to handle their finances, and I totally agree that America in the near future will suffer quite a few serious economic consequences, but for the time being, we're way better off than places like China and India.
SOS2008 said:
But the main question is whether outsourcing/off-shoring/foreign labor is really helping the poor of the world. IMO it is helping the multinationals (and who ever else is at the top of the feeding chain) and in the long run masses everywhere will be worse off.
I had this whole thing about what might happen when the whole world is Capitalist a little bit ago. I laid out my opinions on how globalization will play out in the long run, which I pretty much concluded would lead to a sort of worker's dictatorship. I don't see how you could conclude that masses everywhere will be wrose off.

Right now, corporations have huge supplies of cheap labor that they can use. So maybe in the near future, wages around the world drop, since there are so many poor people who'll work for next to nothing. But the world's population is relatively finite. At some point or another, the whole world will be involved in the global market for everything. At this point, corporations will have no huge labor markets of poor people to exploit. Without this ability, it seems to me that wages will necessarily rise, as there's less and less supply of labor avialable (that is, unemployed people around the world), labors price goes up, and workers are more and more valuable.

SOS2008
Gold Member
I'm not an economist, and only studied economics in a peripheral way, but it seems "there are some holes in the theory."

wasteofo2 said:
Jobs get provided for the very poorest people because the rich people are willing to buy what they make. Eventually, the rich people will buy so much from poor people, that wealth will re-distribute itself so that both groups of people are on more or less equal footing. It just takes time; there is no instant formula for economic prosperity.
The rich are only one percent of the population, and I’m not sure how many yachts they will buy from the poor people. The problem is the middle class is shrinking in the U.S. because of these practices, so this will leave the poor to buy from the poor?

wasteofo2 said:
It's not as if there is a static amount of jobs out there, and X jobs created in India means X jobs lost from America. One of Capitalism's main trends is to expand itself. As businesses expand and hire more people, the richest people (owners of factors of production) spread the wealth around by paying wages to the poorest people. Eventually, the poorest people get paid enough wages collectively that they become well off, as happened during America's industrial revolution. Then these well-off people can finance more expansion into cheaper labor markets. Like jobs, wealth is not static. It's not as if wealth can only be spread so thin, and mean prosperity can never increase. Wealth can be created through innovation, and this process is constantly occuring. As long as people think of new ways to make money, or cheaper ways to do things, more wealth will be created. And as more wealth is created, there's more demand for goods and services in general.
Like a friend who argued that the war in Iraq would be good because wars fuel the economy, a lot of this thinking is no longer valid. Per my post in the employment thread:

RALPH MARTIRE, CTR. FOR TAX & BUDGET ACCOUNTABILITY: We are truly feeling the impact of globalization, and it's not like the old days where maybe one high-paying wage sector would go away in the economy and another high-paying wage sector would jump up to replace it. That's not what's really happening now.
http://transcripts.cnn.com/TRANSCRIP...21/ldt.01.html [Broken]

You know how this country became so great so quick? Isolationism, not globalization.

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russ_watters
Mentor
SOS2008 said:
The problem is the middle class is shrinking in the U.S. because of these practices, so this will leave the poor to buy from the poor?
Just to make sure we're perfectly clear, you are saying that the middle class are becoming poor? Care to prove that? (and be sure to specify your timeframe...) Because I'm sure you've seen the stats I've posted in pretty much every thread where someone claims that. This is another case (like the gas lines thing) of you thinking something that sounds good in your head and in a liberal campaign speech is actually a reality. It isn't. The middle class is not getting poorer. In fact, the middle class is getting so big (definitions vary, though), the term is starting to become meaningless! It is very common to see three middle classes listed: a lower-middle, middle-middle, and upper-middle.

edit: I'm guessing you are getting this from Kerry's presidential campaign. Be aware that that claim by Kerry was based on an extremely short timeframe of 3 years - essentially meaningless for the identification of a long-term trend. It is, however, something that liberals have liked to claim for much longer. Sometimes it is even factually true to say "the middle class is shrinking" - but the implied effect (they are getting poorer) is actually the opposite of what is really happening: if the middle-class is shrinking long-term, it's because the people in it are rising out of it, not falling out of it.

A good article:
Being middle class in America is sometimes taken to define a set of values, not simply income class. But even defined purely in terms of income, middle class is not a static concept, because it involves comparisons between your family and others. Using DOL s example, defining the middle class as having an income between 40 percent above and below the U.S. median income adjusted for family size, it becomes apparent that over the past 25 years, American middle class families became better off.

In 1969, 51 percent of individuals in families were middle class. By 1993, that share had declined to 40 percent. The decline in the middle class was primarily the result of growth in the share of individuals in upper class families. By 1993, onethird more individuals in families had incomes more than 40 percent above the U.S. median than in 1969. A much smaller share of the decline in the middle class, only 6 percent, was the result of a 3 percentage point increase in the lower class.

It was also true, however, that many individuals in lower class families in 1993 had higher real income than individuals in middle class families had in 1969, because sizeadjusted U.S. median real family income grew by more than 20 percent between 1969 and 1993. Thus, despite the fact that these individuals were no longer part of the middle class, they and their families had greater access to goods and services than some middle class individuals and their families had in 1969. This is one reason why the continued rise in per capita consumption is a better barometer of real economic wellbeing.

So the middle-class is shrinking? Great!!!

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If outsourcing is prohibited companies will just simply leave the US and move their entire operations overseas. It is a no win situation.

SOS2008 said:
...
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?
The vitality/health of our economies depends directly on the energy/effort of those who swim in same. So, we could do our constructivist best, get out our little brains/energy/effort meters, and come up with a Five Year Plan, complete with quotas. Indeed, should there be no limits on citizenship, period? Hey, crack a 1000 on your SATs, or there is going to be a painful scene at Ellis Island, only heading out this time. (Unless, of course, you can dunk a basketball. I mean, how else is 'Duke' going to field a national championship team and have someone for all those 'crazie' fans from the 'burbs with their 1500 SATs to cheer for?)

Why such slack for the uneducated brains in skulls already taking up space, especially those un-energetically laying around waiting for the gov't to do something or fix something on their behalf, from whatever source, domestic or imported?

Do we or anyone actually know what our 'brain quota' should be for next year? As in, wait a minute, America has too many brains? How does that work when we reach 'the' quota?

a] The Five Year Plan is on track; we have exactly enough brains, per The Plan. See? Tha Answer is in The Plan.
b] Well, we came up short, but now there are plenty of unfilled brain jobs for Americas resident brains to swim about in. Great.
c] Oooops. "Too many" brains. The spreadsheets are all f'd up.
d] Nope, not reeally, we caught it in time. So, now there is less competition for what lessor brains there are to swim aroung in not so strenuously. Great.
e] Who knows?

We have two queues trying to get into America; a legitimate front door queue, and the illigitimate back door queue. Through both, let's say, are a fringe few trying to sneak to do us harm. The back door seems an easier way to go to avoid detection, yet it was through the front door that the 9/11 crew came in. ( Separate issue; the front door is not enough of an impediment to deter anyone into attempting the dusty route...)

If immigration in we're all immigrants America is a problem, it is easier for us to control the queue of folks we want, so ... that is what we do. On what basis, I have no idea(brain quota meter?), but that is what we do.

Meanwhile, the SS Trustees are all but counting on immigration to pad the numbers and apply AWI as a magic multiplier. Look, it's easy, you just plug the numbers into a spreadsheet, and some unseen recursive descent parser does all the work. I mean, Mexican.

We're a sad, tired, old place if we're really so worried about energetic/brainy folks showing up to make us have to bust a gut.

I mean, why not just unionize the Union, implement some nationwide seniority system, and get on with the slacking off?

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SOS2008 said:
I'm not an economist, and only studied economics in a peripheral way, but it seems "there are some holes in the theory."
The rich are only one percent of the population, and I’m not sure how many yachts they will buy from the poor people. The problem is the middle class is shrinking in the U.S. because of these practices, so this will leave the poor to buy from the poor?
The rich, in my post, were essentially all the consumers in North America, Europe and Japan. I'm not talking about the super-rich, but the average consumers in the Western world who buy things like chairs, computers, clothing and automobiles. Compared to the populace of China, you and I are very rich. Through buying things that are made in poorer companies, we are funding the companies that make them, who in turn re-distribute this wealth to their workers through wages. We're giving up our money for things we need, and in turn, that money goes to the workers who gave up their time and labor to get the wages they need. The whole populations of the Western nations are funding China and India's growth every time they buy anyhting from a company that employs people in those nations.
SOS2008 said:
Like a friend who argued that the war in Iraq would be good because wars fuel the economy, a lot of this thinking is no longer valid. Per my post in the employment thread:
Totally different situation. Plus, it's blatantly apparent now that China and India are doing remarkably well because of the current process of Globalization that's going on.
SOS2008 said:
http://transcripts.cnn.com/TRANSCRIP...21/ldt.01.html [Broken]
You know how this country became so great so quick? Isolationism, not globalization.
Actually, this country didn't become so great so quick. Throughout the entirety of the industrial revolution, until the 1940's, (with a short exception during the 1920's), American workers had horrible conditions. Even into the early 1900's, sweat-shop labor was still quite common in America, as was children laboring for 15 hour days. It took generations for the American work force to have any power at all. The kicker was when business expanded to such a large degree that there weren't huge pools of unemployed people. Once you reach an unemployment rate that is low enough that you can't find anyone to do any **** job, wages begin rising very noticably. Isolationism certainly helped spur on our growth in the short term, but as we're seeing now, you can't stay isolated forever.

Isolationism can cause undue prosperity, but when your nation gets exposed to foreign competition, all these undue gains are competed away.

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wasteofo2 said:
The rich, in my post, were essentially all the consumers in North America, Europe and Japan. I'm not talking about the super-rich, but the average consumers in the Western world who buy things like chairs, computers, clothing and automobiles. Compared to the populace of China, you and I are very rich. Through buying things that are made in poorer companies, we are funding the companies that make them, who in turn re-distribute this wealth to their workers through wages. We're giving up our money for things we need, and in turn, that money goes to the workers who gave up their time and labor to get the wages they need. The whole populations of the Western nations are funding China and India's growth every time they buy anyhting from a company that employs people in those nations.
That is wrong, becouse if you paythem a lot less of what they work realy worth then you are taking whealth from them... a car, a tv a computer is wealth also.. I bet the workers who build cars and computers you buy cant pay a car with they wages... so actualy the rich countrys are taking the wealth in form of labor from the poor countrys, paying a small bribe for it....

BobG
Homework Helper
wasteofo2 said:
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?
Long term globally, the free-trade position is the best economically. The flow of money from the richer countries to the poorer countries expands the market and raises the worldwide standard of living. Environmentally, that's a bad thing. I'm not sure Earth can support the entire globe consuming at the same rate as the US and Europe.

Within the US, I think the issue of outsourcing is blown a little out of proportion. I don't see outsourcing jobs overseas as being much different than old factories in the rust belt being replaced by new factories in southern states with lower tax rates and lower labor rates. For those affected, it's traumatic regardless of who's taking your jobs.

The difference is that the government could theoretically prevent companies from closing a factory in one state to open a factory in a different state (not in the US, but that's a concious decision by our capitalistic society). You can't stop job markets from moving overseas unless all of the richer countries agree only to buy products among themselves.

Otherwise, obstacles that prevent American companies from outsourcing slows the flow of money to poorer countries, but doesn't stop it. It preserves American jobs until the American company, itself, goes out of business because foreign competitors can undersell it.

In fact, if a country isolates itself from the global market, that country's economy will suffer. Economically, Argentina was a global power prior to World War II. While it wasn't dropped because of trade practices, the close US-European ties after WWII that squeezed Argentina out reduced it to third world status. A nation just can't afford to be left out of the global market.

SOS2008
Gold Member
russ_watters said:
Just to make sure we're perfectly clear, you are saying that the middle class are becoming poor? Care to prove that? (and be sure to specify your timeframe...) Because I'm sure you've seen the stats I've posted in pretty much every thread where someone claims that. This is another case (like the gas lines thing) of you thinking something that sounds good in your head and in a liberal campaign speech is actually a reality. It isn't. The middle class is not getting poorer. In fact, the middle class is getting so big (definitions vary, though), the term is starting to become meaningless! It is very common to see three middle classes listed: a lower-middle, middle-middle, and upper-middle.
Moving past the usual patronizing tone, I agree that definitions of middle class vary. And as discussed in PF before, so do people’s perception (so as to not reaffirm poverty, the poor often consider themselves to be middle class, and because people never feel they have enough, the upper class probably often consider themselves to be middle class). I also agree that statistics can vary:

The third major factor in changing income distribution is the job market. Read about Working in America. However, any conclusions about global inequality depend on what statistics analysts choose to look at. As economist Paul Krugman sees it, the broad middle class society we have gotten used to may have just been a temporary aberration of the 1950's and 60's. –
http://www.pbs.org/now/politics/working.html

I realize the regular media reports on the middle class squeeze could be exaggerated, and in addition to the link above (in my post #24) and post #40 in the thread on the employment situation, very quickly here are a few more links as an example:

NOW. Politics & Economy. Middle Class Squeeze | PBS - http://www.pbs.org/now/politics/middleclass.html

The gap between the haves and the have-nots in terms of wealth is greater now than at any time since 1929, immediately preceding the Great Depression.
http://americanassembler.com/issues/economy/ [Broken]

And just for you:

HAROLD AMMOND, IEEE: It's been devastating. We have actually had communities where engineers were told they had to train new employees. The new employees happen to be H1B employees. And when the training was done, the engineers -- the American engineers were laid off.
http://transcripts.cnn.com/TRANSCRIP...21/ldt.01.html [Broken]

Once again, I believe concern about outsourcing/off-shoring/foreign labor (particularly illegal) are legitimate concerns, as well as other points made by members in this thread regarding diminishing U.S. competitiveness in general. To deny this and not work on ways to improve the situation is foolish.

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Ivan Seeking said:
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.
I have the same problem every time I call any ISP.. be it NTT level3 or your local ISP... I have to dumb down problems to first line and convince them I need to speak to an engineer. The amount of times I have been told to "reset a router".. If you know anything about Networking then you will know how stupid this is:

A Telecommuter I support right now for our company has a Cisco 800 Series dsl router. The Teleco company were having carrier problems, and the helpdesk wanted me to wipe the config from my router and rebuild it???? I was like "I'll do it to my end if you do it to your end!" :-) They refused to help me until I erased the config, and would not escalate the case... I ended up hanging up and letting someone else try.. luckily after a few attempts we got someone who actually knew a couple of things...

Anyway sorry bit of topic, back on topic.. Technical Support requires some means of intellectual training a lot of indians can do this type of stuff, but as the saying goes if you pay peanuts you get monkeys.. this applies everywhere.. Until these companies stop looking at Tech support as an expense we as a consumer wont get any decent support

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Life is not a stroll in the garden, at least not to those of us in HK.
Few of you would probably have heard that we have a rotten 7 years from 1997-2004. "Blessed" with a not very smart Chief Executive who is full of good intention and the economic pressure from Shangha and, Guangzhou (Yes, they are our competitors too and are trying to overtake us in every possible way), we went through a structural change in our economy amidst a major property adjustment when our CE vowed to build 85,000 public housing units every year. Property price at its lowest in 2003 represented only about http://www.centanet.com/cci.htm", there were massive bankruptcy and negative asset cases (i.e. the market price of your property is lower than what you owe the bank). Of course, cheap household goods and food stuff flooding our market also dampened local production. It was a sad and gloomy time, every other day people would be killing themselves through inhaling carbon monoxide by burning coal.
http://www.centanet.com/cci.htm
http://www.info.gov.hk/hkecon/kesi/index.htm [Broken]
So we busted our guts in coping, adjusting and getting ahead and justifying an average salary which is at least 9 times higher than that in the Mainland. And we were lucky, the central government pumped up the economy by allowing independent tours to Hong Kong, and we seem to have made it so far. But will we always be retain this economic success? In 20 years' time? Maybe. In 50 years' time? Not likely. In 100 years' time? No way. For every successful mode of producton must be overtaken by changing times and development. Opposites spawn each other, great chaos is always followed by great prosperity and in great prosperity will be hidden the seeds of its own destruction. Such is The Way.
By the way, wasteofo2, bless your heart of gold .

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russ_watters
Mentor
SOS2008 said:
I agree that definitions of middle class vary. And as discussed in PF before, so do people’s perception (so as to not reaffirm poverty, the poor often consider themselves to be middle class, and because people never feel they have enough, the upper class probably often consider themselves to be middle class). I also agree that statistics can vary:
http://www.pbs.org/now/politics/working.html
I realize the regular media reports on the middle class squeeze could be exaggerated, and in addition to the link above (in my post #24) and post #40 in the thread on the employment situation, very quickly here are a few more links as an example:
NOW. Politics & Economy. Middle Class Squeeze | PBS - http://www.pbs.org/now/politics/middleclass.html
http://americanassembler.com/issues/economy/
And just for you:
http://transcripts.cnn.com/TRANSCRIP...21/ldt.01.html [Broken]
Once again, I believe concern about outsourcing/off-shoring/foreign labor (particularly illegal) are legitimate concerns, as well as other points made by members in this thread regarding diminishing U.S. competitiveness in general. To deny this and not work on ways to improve the situation is foolish.
Nowhere in there did you answer my question: Did you mean that the middle class is becoming poorer?

Most of those links have nothing to do with the issue (what does the health of labor unions have to do with anything?) and the last link is dead, but the link on income distribution implies that you define the size of the middle class based on income distribution. Please state it explicitly for clarity. And anyway, if that is what you believe, fine, but that still doesn't answer the question above....

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russ_watters
Mentor
Burnsys said:
That is wrong, becouse if you paythem a lot less of what they work realy worth then you are taking whealth from them... a car, a tv a computer is wealth also.. I bet the workers who build cars and computers you buy cant pay a car with they wages... so actualy the rich countrys are taking the wealth in form of labor from the poor countrys, paying a small bribe for it....
The alternative, Burnsys, is for us to not pay them anything (not buy anything from them), and then they starve to death. You have a very twisted way of looking at a situation that is actually benefiting everyone involved.

Art
In my opinion outsourcing is a symptom rather than a root cause of the flight of capital and jobs from the U.S.. For example Germany is a high wage society and is the world's biggest exporter (btw far larger than China and yet never mentioned on this forum??) with nearly 40% of it's annual production sold abroad. Germany's exports have incresed by 50% over the past 5 years alone!!
American businesses in general have been slow to innovate and slow to globalise their markets relying far too much on domestic demand for their products. Here in europe, despite the GAT agreement it is nigh on impossible to find anything made in America for sale in our shops. Where an American designed product is for sale it has usually been made in a european country so the U.S. parent can take advantage of tax breaks and possibly slightly lower wages.

The U.S.'s main trading partners are in South America where the populations are poor and so cannot afford luxury items and so for example whereas GM are looking to reduce car production in the U.S. by a million units per year, B.M.W. in Germany are ramping up their volumes to feed their export markets.

In conclusion what the U.S. need to do, rather than try to simply ban outsourcing (which would be impossible) is first the gov't needs to create a tax environment on a par with their industrial competitors then companies CEOs need to develop a sense of nationalism (consumers can help by boycotting companies with strong outsourcing policies) and finally and most importantly the U.S. companies need to start aggressively marketing their products in lucrative oversea markets.

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Astronuc
Staff Emeritus
Here is an interesting article -

V35-3: Globalization and Engineering

Engineering as a profession in the United States and other developed nations may soon face a crisis. As a result of sophisticated telecommunications and the digitization of engineering work processes, increasing portions of engineering work can be done without close proximity to particular persons, places, or other processes. In principle at least, this work can be done anywhere in the world that has access to (1) global telecommunications networks and requisite software packages and (2) adequately trained personnel. Undergraduate engineering students in relatively advanced developing nations, such as India and China, follow a curriculum roughly comparable to the one taught in developed nations. Thus, even as barriers to performing conventional engineering work remotely are eroding, a global pool of conventionally trained engineers is growing. This means that U.S. engineers are now in global competition with engineers in developing nations whose wages are 40 to 80 percent lower than ours.

SOS2008
Gold Member
russ_watters said:
Nowhere in there did you answer my question: Did you mean that the middle class is becoming poorer? Most of those links have nothing to do with the issue (what does the health of labor unions have to do with anything?) and the last link is dead, but the link on income distribution implies that you define the size of the middle class based on income distribution. Please state it explicitly for clarity. And anyway, if that is what you believe, fine, but that still doesn't answer the question above....
The links were provided to exemplify varying positions on the topic (some cover more than the OP). Concerns that the middle class is being squeezed are legitimate, and nitpicking over whether it is getting poorer or smaller is irrelevant. I’m not purporting complete devastation for American workers, only that there are signs that we should note and try to make corrections before conditions do become extreme:
SOS2008 said:
Once again, I believe concern about outsourcing/off-shoring/foreign labor (particularly illegal) are legitimate concerns, as well as other points made by members in this thread regarding diminishing U.S. competitiveness in general. To deny this and not work on ways to improve the situation is foolish.

Gokul43201
Staff Emeritus