Offshoring U.S. Jobs

[Solitaire]

Tech Leaders Urge Congress Not To Act To Keep Jobs In U.S.

"There is no job that is America's God-given right anymore,"
Carly Fiorina, chief executive for Hewlett-Packard, said
Wednesday." We have to compete for jobs."

Yes, Yes. We knew it would happen.

Democratic front-runner Howard Dean said during a debate
last month that America needs a president "who doesn't think
that big corporations who get tax cuts ought to be able to move
their headquarters to Bermuda and their jobs offshore."

Biting the hand... Dear me... No teeth.

A Commerce Department report last month said increasing numbers of technology jobs are moving from the United States to Canada, India, Ireland, Israel, the Philippines and China, and predicted that "many U.S. companies that are not already offshoring are planning to do so in the near future."

Not that many just three million jobs per year.
Not telling my sources on that!

The problem is not a lack of highly educated workers,"
said Scott Kirwin, founder of the Information Technology
Professionals Association of America. "The problem is a lack
of highly educated workers willing to work for the minimum
wage or lower in the U.S."

They either learn to do so or they don't eat.

 

[Nasarius]

They either learn to do so or they don't eat.

That's a bit harsh. Are you really suggesting that someone with a B.S. in Computer Science should be paid "minimum wage or lower"? Why spend $60,000+ on college when you can just work at McDonalds and get paid better...

Fortunately for me, it's not the only degree I'll be getting, even though CS is my primary interest.

 

[Cleon]

#$%^ these people.

I say, let's start outsourcing the CEOs to India...Then we'll see this trend reverse itself pretty damn quick. It's easy to whine "we have to compete" when it's not your job on the line.

 

[Jon_in_london]

Wheres Shanek to say this is actually a good thing for the economy?

 

[Chaos]

Wheres Shanek to say this is actually a good thing for the economy?

More important: where are all those who just cannot stop praising the virtues of capitalism?

 

[RussDill]

#$%^ these people.

I say, let's start outsourcing the CEOs to India...Then we'll see this trend reverse itself pretty damn quick. It's easy to whine "we have to compete" when it's not your job on the line.

No doubt entire companies will continue relocating all around the world to more desirable locales, as they have been for a long time now.

 

[Badger]

I don't see the problem, frankly.

It's the way capitalism works. I do hope things have been learned from what went on in the north american auto industry....

 

[Luke T.]

I guess Howard Dean wants to tax the living daylights out of corporations and force them to stay in the U.S..

We will tax you to death and you will like it...

Many, if not most (hell, if not all), of the high tech jobs are non-union, so we can't blame them for forcing wages up, making the companies move outside the U.S..

The wages ain't so high right now, I can tell you. They are half to one-third what they were just a year ago in my area.

As for your 3 million technology jobs per year moved overseas, Synchronicity, I would like to see the source, tongue-sticker-outer smiley notwithstanding.

All the layoffs that have occured in my area were not the result of the jobs going elsewhere. They were the result of companies downsizing which was the result of the economy tanking. Nobody in Ireland or India got our jobs.

 

[Luke T.]

Just wanted to add that I worked for a corporation whose biggest customer was Intel. I worked in an Intel clean room. Intel has "fabs" all over the world. U.S., Israel, Ireland. Our company had our people working throughout Europe and Asia.

This is not a case of companies moving their entire workforces out of the country. They are spread out all over the place.

I do know that Intel, and a bunch of other high tech companies, moved a large chunck of their operations out of California into Oregon strictly because of taxes. They all moved into what is now called "The Silicon Forest."

But Oregon hasn't learned from California's mistake. They have been raising taxes two or three times a year in the last three years. And they are losing businesses in a major bleeding process. So they raise taxes to make up for the loss of revenue. And appear to be completely mystified why the economic situation is not improving. Oregon has had the highest unemployment rate in the country for some time now.

edited to add: It won't be long before the high-tech companies follow suit, and then Oregon will really be screwed.

 

[dsm]

All the layoffs that have occured in my area were not the result of the jobs going elsewhere. They were the result of companies downsizing which was the result of the economy tanking. Nobody in Ireland or India got our jobs.

How do you know?

Companies usually downsize because they are getting too much competition from elsewhere and have to cut costs. While the companies in your area may not be directly sending the jobs overseas, perhaps they've already lost out to someone who did...

 

[Malachi151]

http://www.rationalrevolution.net/americanprosperity.htm

 

[dsm]

Just wanted to add that I worked for a corporation whose biggest customer was Intel. I worked in an Intel clean room. Intel has "fabs" all over the world. U.S., Israel, Ireland. Our company had our people working throughout Europe and Asia.

This is not a case of companies moving their entire workforces out of the country. They are spread out all over the place.

That's a ridiculous statement. Of course they are spread out "all over the place" as they look for wherever is most advantageous. As cost comparison between the US and other countries becomes more weighted toward the other countries, more jobs will go elsewhere.

I do know that Intel, and a bunch of other high tech companies, moved a large chunck of their operations out of California into Oregon strictly because of taxes. They all moved into what is now called "The Silicon Forest."

They also moved to Taiwan and other Far East nations.

Face it, the economics of having a work force in the US is too high in comparison to other nations. If companies thought they could get away with it now, MANY more jobs would permanently exit the US. As the economy becomes more globalized, the US will be screwed. By the time things even out across the world, it will be too late for the US worker. In the long run, your only hope is to take your nest egg and invest it wisely in the market...

 

[Luke T.]

How do you know?

Companies usually downsize because they are getting too much competition from elsewhere and have to cut costs. While the companies in your area may not be directly sending the jobs overseas, perhaps they've already lost out to someone who did...

I know because when I was laid off, I immediately began networking. I had a lot of contacts in the industry. The answer was the same everywhere. I finally had to take a much lower paying job outside the industry.

Also, there are only two other competitors who do what our company did. And they were downsizing, too.

Our company laid off 80 percent of its employees worldwide in two years! That is worldwide. The jobs were going nowhere. Just disappearing.

You can google for yourself and see what has happened to the hi-tech industry in the last few years.

 

[RussDill]

Face it, the economics of having a work force in the US is too high in comparison to other nations. If companies thought they could get away with it now, MANY more jobs would permanently exit the US. As the economy becomes more globalized, the US will be screwed. By the time things even out across the world, it will be too late for the US worker. In the long run, your only hope is to take your nest egg and invest it wisely in the market...

I'm confused...why would the US be screwed? Many countries in the world are unjustly poor, and the system is balancing out, in the near future, india will be one of our huge trading partners. Do you think that when manufacturing jobs moved to the then impoverished south korea, it was bad in the long term for the US economy?

 

[Luke T.]

Face it, the economics of having a work force in the US is too high in comparison to other nations. If companies thought they could get away with it now, MANY more jobs would permanently exit the US. As the economy becomes more globalized, the US will be screwed. By the time things even out across the world, it will be too late for the US worker. In the long run, your only hope is to take your nest egg and invest it wisely in the market...

And why can't they "get away with it now?"

Because cheaper labor is not enough to move jobs. Another country may have cheap labor but an unstable government, higher taxes, poorly educated laborers, lousy infrastructure, and on and on.

It will be a long time before those things "even out."

Originally posted by Chaos
More important: where are all those who just cannot stop praising the virtues of capitalism?

Right here.

It is a simple principle that you have to pay workers enough that they can buy the products you make to have a strong economy. If the cheap laborers elsewhere can't buy what they are being paid to make, and the U.S. workers are all unemployed, who is going to buy the stuff, eh?

 

[dsm]

http://www.rationalrevolution.net/americanprosperity.htm

How do we influence closed societies (like China)? Can that influence be mobilized fast enough to save (most of) the American workers who are losing their jobs to offshore companies?

 

[dsm]

And why can't they "get away with it now?"

Because cheaper labor is not enough to move jobs. Another country may have cheap labor but an unstable government, higher taxes, poorly educated laborers, lousy infrastructure, and on and on.

It will be a long time before those things "even out."

They can't be as blatant about it now as they might like not because of instability of other nations (and the like), but rather because an enraged American consumer would severely impact their bottom line. For example, while Microsoft (etc.) continue to move jobs overseas, they are removing their placards from the new localities to make it less obvious that they are doing that.

 

[Malachi151]

How do we influence closed societies (like China)? Can that influence be mobilized fast enough to save (most of) the American workers who are losing their jobs to offshore companies?

What do you mean by "we"? American-Chinese trade relations go back over 300 years. At one time the richest man in teh world was a Chinese opium lord, who helped to finance the American railroad system to increase opoum markets in Aemrica, he was aided by Bayer, the inventor of heroin (and asprin), and John Jacob Astor as well, the wealthy American trader, and first true "Bill Gates" of America.

American trade relationships with Chinese businessmen and families goes back hundreds of year and has been largely unbroken, even by the revolutions and wars.

They relatiosn were broken after WWII when Mao took over, but were opened back again under Nixon, and picked up where they had left off.

Every country has its people who are willing to work with foreigners to exploit their own people for profit, this is viewed as "progress".

China is not a closed to society to millionairs, never has been, except under Mao.

Western businessmen work with native Chinese to keep economic conditions poor and keep labor oppressed, American treaty agreements facilitate exploitation and work against the interests of workers, its the same as it has been for the past 500 years with all trading partner sof all Western nations.

That's how "free trade" works.

Changing the situaiton is easy, if those in power wanted it to change it could change tomorrow, but they are the ones making it the way it is in the first place. That should be self evident, all economies are the product of the ruling class and serve ruling class interests. We now have a global world economy, serving the ruling class intersts in all nations. The ruling classes of all trading nations are working together to support each other's ruling class.

http://www.rationalrevolution.net/articles/economy_web.htm

The wealthy in China are wealthy by their agreemnts and deals with Americans. The current agreements are mutually benefical for the parties involved. We, the working classes of the world, are not the parties involved, and our interests are not served. Actually America working class' intersts are served as consumers of the virtual slave labor of China, our new American colonial industrial plantation.

 

[Zep]

There are two things that have changed with respect to IT in the "old days".

First, the technology is now far more widespread worldwide, so with only a few exceptions, commodity computing and communications is far more pervasive in "low-tech" countries than ever before. And many of these countries have enormous populations, so the uptake is staggeringly fast. Countries like India, already having a core of world-class high-tech people, have the sheer weight of numbers to be able to be able to offer global high-tech services at what we would call bargain pricing. And they do.

The second is the commoditisation of computing and comms technology itself. The mobile phone (OK, cellphone), the PC, and digital comms have revolutionised global thinking and business operation. So the idea that a "company" is purely a "US company" or "British company" no longer has a lot of meaning.

What this means is that it is now a global playing field for the company, but the problem is that the workers are not thinking globally, only locally. The discussion above is only talking about "the US worker" but the (mythical) company is buying its cheap computers from China, putting its IT staff in India, its headquarters is in Delaware for tax reasons, and its sales staff are in Europe because that's where the client contact is required. I'm sure we can all relate to such companies.

My own worries about this are that divorcing the customer (anyone remember the customer in all this?) from the company by this method may actually lose the company its vital clientel, even though the company is saving millions of dollars operating that way. Ergo globalism is a very short-sighted and ultimately self-defeating concept if that's the result. And my own observations are that this is now happening to a number of "global" companies.

Just my 2c.

 

[shuize]

....My own worries about this are that divorcing the customer (anyone remember the customer in all this?) from the company by this method may actually lose the company its vital clientel, even though the company is saving millions of dollars operating that way. Ergo globalism is a very short-sighted and ultimately self-defeating concept if that's the result. And my own observations are that this is now happening to a number of "global" companies.

Just my 2c.

Zep,

Good post. However, I disagree with the very last paragraph.

At its core, capitalism is consumer driven. Companies that don't give consumers what they want, quickly lose lose them to other companies that do. Lose too many customers, and they're out of business.

If by saving millions of dollars the company is able to offer their product at a much lower price, I expect that's what will matter most to its customers.

But if not, as you predict, then the companies that do stay connected with their customers will be successful and the "globalization" trend will die off.

In my opinion, price matters much more to consumers than "connectedness." But the market will ultimately show us which view is correct.

I don't understand why either result should worry you, however, since it is all a process of meeting consumer demand.