America,The Superpower, The Economy and The Shirking Middle Class

[TevashSzat]

If you ignore ideals in which America supposedly stand for, you will become a hypocrite and lose all credibility. America right now wants nations in the world such as China to have markets that are more free, but how can America do that if it is becoming more restrictive and socialist like.

[HoreTore]

Jobs are not only outsourced because they can't compete in their home country, they are also outsourced because they will make more money in a third world country.

And until we are all third world countries, there is nothing to stop companies outsourcing jobs with that kind of logic. You just can't beat a 9-year old willing to work 12 hours a day for a dollar a year.

However, what we CAN do, is use the power of the state to force them to remain. However, governments using power has become something we fear today...

Let the state take over the jobs that were outsourced, requisition the assets of the company in question, and ban them from the country. It is very possible for a state to do this, but all of them are lacking the balls or the will to do it...

At the moment, we are all forced to view how a select few people get stinking rich, while development in third world countries is kept in check due to the exploitation of their workforce.

They should all be hung by the neck or shot.

[Tuuvi]

I think you have a good point. But I believe the best way to stop outsourcing would be to lower minimum wage, not by laws and regulations. If the minimum wage was lowered employers could afford to hire more workers, which would create more jobs and businesses. Also the price of goods in general would go down, which would not only give the US a better competitive edge but would also null the problems of poverty which a lower minimum wage could create.

[TevashSzat]

Minimum Wage will never be lowered simply because of politics. As soon as Congress even discuss this, people will start accussing them of favoring the big companies and screwing the little man that is trying to work hard to support his or her family

[Tuuvi]

Minimum Wage will never be lowered simply because of politics. As soon as Congress even discuss this, people will start accussing them of favoring the big companies and screwing the little man that is trying to work hard to support his or her family

Well the thing is a lower minimum wage would make it easier for the little man to start his own business. But yeah it would never happen.

[KukriKhan]

America,The Superpower, The Economy and The Shirking Middle Class

I'm pretty sure your meant "shrinking" Middle Class, but your typo is telling.

[rant]A radical fundamentalist capitalist would point out that america was built on the boss's ability to manage resources - of which labor is one. Just as it's run out of frontier ('free land', taken by purchase, treaty and war), it's also run out of cheap labor (slaves, indentured servants, citizens willing to work for slave wages).

But there are thousands of millions of asians, africans and latinamericans willing and eager to fill that gap; which will last about 100 years - after which they'll want to educate their kids and participate in their governments, and "own" land too, just like their american-dream predecessors did.

Sadly, the only way to slow that progression, in my opinion, would be to totally give up the fuel for the industrial engine that drives that trend: oil.

Give it up, like an alchoholic gives up booze; not because it has killed him (yet), but because his reliance on it has ruined what he'd hoped had been his life's events and accomplishments. Horses, bicycles, walking... living muscle-power trumps dead-dinosaur power, everytime.

Just because we can adapt to almost any environment, doesn't mean we must. We can change environments, too.

[/rant]

[Papewaio]

You do realise that outsourcing is:

A) Profitable
B) Makes a larger middle class in the respective nations that get the outsourcing.
C) Which has a knock on effect of:
1) Them wanting to buy more foreign goods (to show off their new wealth).
2) Makes the outsourced to nation as a whole more capitalistic, educated, wealthy and hence a general trend to democracy.
D) The outsourcing nation gets more bang for its buck and allows their motivated workers to do less menial tasks.

Compare that with invading a country and tell me which is a better option

[Xiahou]

You do realise that outsourcing is:

A) Profitable
B) Makes a larger middle class in the respective nations that get the outsourcing.
C) Which has a knock on effect of:
1) Them wanting to buy more foreign goods (to show off their new wealth).
2) Makes the outsourced to nation as a whole more capitalistic, educated, wealthy and hence a general trend to democracy.
D) The outsourcing nation gets more bang for its buck and allows their motivated workers to do less menial tasks.

Compare that with invading a country and tell me which is a better option

Yes, thank you.
Outsourcing doesn't cost jobs- you could easily argue that it's created better jobs domestically in addition to the benefits you mention above. Of course, any politician that says outsourcing is good will likely be hanged from the nearest tree- people lose all rationality on that subject it seems.

[Blodrast]

You do realise that outsourcing is:

A) Profitable
B) Makes a larger middle class in the respective nations that get the outsourcing.
C) Which has a knock on effect of:
1) Them wanting to buy more foreign goods (to show off their new wealth).
2) Makes the outsourced to nation as a whole more capitalistic, educated, wealthy and hence a general trend to democracy.
D) The outsourcing nation gets more bang for its buck and allows their motivated workers to do less menial tasks.

Yes, thank you.
Outsourcing doesn't cost jobs- you could easily argue that it's created better jobs domestically in addition to the benefits you mention above. Of course, any politician that says outsourcing is good will likely be hanged from the nearest tree- people lose all rationality on that subject it seems.

I'm afraid we might be in a bit of disagreement here.

Pape: I agree with A, with a clarification: profitable for the companies engaged in it.
I disagree with D. The "motivated" workers are out of jobs as a consequence of outsourcing. Lots of white-collar jobs are outsourced - or are those workers, like you, and me, and Xiahou, not among the "motivated" ones?

I disagree with C2. It makes them more capitalistic, sure. But there is a contradiction between C2 and D. D implies that only menial jobs are being outsourced (I disagree with that, and I have shown evidence of that in a similar thread less than 2 weeks ago, I believe; but, for the sake of the argument, let's leave that aside for now); C2 claims it makes them "more educated".
Really ? They become "more educated" by doing menial jobs ?
Working on a, say, assembly line, improves your education, or skills ?

I certainly agree with both of you about it being a pure capitalist trait.
Whether that's good or bad, is a different story. In my opinion, simply put, capitalism, in its current implementations, favors the corporations at the expense of the individual. It's a bit of a generalization, in the sense that, naturally, it has its good facets, but I'm not gonna try to do an exhaustive analysis of capitalism right now.

About the jobs, one more thing: I'll give you an example, again. Look at Ford, for instance. They are laying off people like crazy. How can you claim it creates new jobs ?! On the contrary, it eliminates existing jobs!!
Oh, sure, it does create new jobs - in the outsourced-to country, but it only eliminates them in the outsourcing one.

Please, let all those ex-Ford, late-middle-aged ex-employees, whom nobody is going to hire, and whose welfare cheques you will be paying from your taxes, let them all know how outsourcing is good for them, and creates new jobs. I'm sure they'll be thrilled to hear it, and will be enlightened by the revelation. Not that that's gonna feed their families or anything, but hey...

I'm curious as to how you think about this, and that's why I'm gonna ask you the following question. It's a personal question, so you're more than entitled to ignore it, and not answer it, if you choose to. That would be perfectly reasonable, in my view.
Would you still consider outsourcing as a good principle, if you were to lose your job because of it ?
Again, since this is a personal question, I am not going to make any comments on your answer, should you choose to give me one. I feel that it would not be fair, or honorable, of me.

[Ice]

I certainly agree with both of you about it being a pure capitalist trait.
Whether that's good or bad, is a different story. In my opinion, simply put, capitalism, in its current implementations, favors the corporations at the expense of the individual. It's a bit of a generalization, in the sense that, naturally, it has its good facets, but I'm not gonna try to do an exhaustive analysis of capitalism right now.

About the jobs, one more thing: I'll give you an example, again. Look at Ford, for instance. They are laying off people like crazy. How can you claim it creates new jobs ?! On the contrary, it eliminates existing jobs!!
Oh, sure, it does create new jobs - in the outsourced-to country, but it only eliminates them in the outsourcing one.

Please, let all those ex-Ford, late-middle-aged ex-employees, whom nobody is going to hire, and whose welfare cheques you will be paying from your taxes, let them all know how outsourcing is good for them, and creates new jobs. I'm sure they'll be thrilled to hear it, and will be enlightened by the revelation. Not that that's gonna feed their families or anything, but hey...

I'm curious as to how you think about this, and that's why I'm gonna ask you the following question. It's a personal question, so you're more than entitled to ignore it, and not answer it, if you choose to. That would be perfectly reasonable, in my view.
Would you still consider outsourcing as a good principle, if you were to lose your job because of it ?
Again, since this is a personal question, I am not going to make any comments on your answer, should you choose to give me one. I feel that it would not be fair, or honorable, of me.

http://www.csmonitor.com/2004/0217/p08s02-comv.html

A 2003 study by the consulting firm McKinsey & Company points to the global economic benefits of US outsourcing of white-collar jobs. For every dollar now spent in India on US business processes, India nets at least 33 cents in taxes, wages, and revenues. That creates wealth, and has helped India nearly double its imports from the US since 1990.

American companies save 58 cents on every dollar of offshore work. That money can be used to invest in new technology - the next big thing. This in turn creates new jobs. Meanwhile, India ships back cheaper tech products to the US, which allows more businesses to install these products and increase their productivity.

A better article by business weekly weighing the pros and cons. I personally think the pros are better than the cons.

http://www.businessweek.com/magazine...4/b3846027.htm

NO
America's strongest suit is innovation, which will always create new high-paying positions

Think of the world economy as a ladder. On the bottom rungs are the countries producing mainly textiles and other low-tech goods. Toward the top are the U.S. and other leading economies, which make sophisticated electronics, software, and pharmaceuticals. Up and down the middle rungs are all the other nations, manufacturing everything from steel to autos to memory chips.

Viewed in this way, economic development is simple: Everyone tries to climb to the next rung. This works well if the topmost countries can create new industries and products. Such invention allows older industries to move overseas while fresh jobs are generated at home. But if innovation stalls at the highest rung -- well, that's bad news for Americans, who must compete with lower-wage workers elsewhere.

Today, many are worried that the U.S. has reached the top of the ladder and run out of rungs. A growing number of high-tech and other white-collar jobs are moving to India, China, and other places. At the same time, there's nothing readily apparent to replace those exported jobs. What's more, the countries snatching jobs are producing large numbers of college graduates for the first time. The fear is that the U.S. educated class will be ground down by globalization, just as blue-collar workers were in the 1970s and '80s.

It's a scenario that shouldn't be dismissed out of hand -- but it's not likely to happen. The U.S. still has a distinct competitive advantage in innovation. If there's any country well-suited to find a new rung for the economic ladder, it's America. Outside of tech, the labor market for educated workers still seems fairly decent, given the stage of the business cycle.

Despite anecdotes of well-paying jobs being sucked overseas, there's little evidence that educated workers, overall, are worse off than they were after the last recession. The average unemployment rate for college-educated workers 25 years and older for the 12 months ended in July was 3.0%. That's lower than the 3.2% for 1992, the year after the last recession.

Some economists have argued that this low unemployment rate stems from educated Americans pulling out of the labor force. Declining labor-force participation over the past year, though, is part of a long-term trend -- it fell during the boom of the 1990s as well.

Moreover, the number of jobs held by college-educated workers 25 years and older has risen by 2.2% over the past year, compared with a 0.4% gain for the less-educated. The jobless rate for college-educated workers has been around 3% since the end of 2001, while the unemployment rate for other workers has increased by half a percentage point, to 5.7%. Wage growth has also been stronger for better jobs. Over the past year, median earnings for managers and professionals are up by 2.8%. Blue-collar and service workers showed no gain.

True, there is pressure on educated workers in the tech sector -- but that's coming off a boom. For example, jobs in software and computer-systems design have fallen by 1.6% over the past year but are still up by 70% since 1995, vs. a 7% gain for all private-sector jobs. "I think people are overreacting a little bit," says Steven P. Jobs, CEO of Apple Computer (AAPL ) Inc., since big chunks of the tech labor market -- including the most innovative parts -- are not going to move overseas.

Still, history does offer cause for worry. There was a period, from 1973 to 1985, when technological change contributed almost nothing to growth, according to government data. Not coincidentally, that was also the same stretch when U.S. manufacturing became vulnerable to foreign competitors.

That's why the American economy needs a boost from innovation if it is to continue creating the next generation of leading-edge industries and new high-paying jobs. By its nature, technology leaps are unpredictable and risky -- yet that's where the U.S. shines. It has the the biggest economy on earth, enabling America to make technological bets that would crush other nations. The U.S. has by far the best-developed financial markets in the world, including venture-capital and high-yield bond markets for financing new businesses.

And for the foreseeable future, the U.S. still has the best-educated workforce among the major economies, a plus for invention. The latest figures from the Organization for Economic Cooperation & Development show that 30% of Americans aged 25 to 34 have a college degree, compared with 24% for Japan and 14% for Germany. That's essential: Better-educated workers can better cope with rapid change, adjust on the fly, and imagine and develop fresh products and strategies.

Where will the next big innovation come from? It could be telecom, or biotech, or energy. Nobody knows. Nobody knew in 1994, either, when real wage growth was still slow, unemployment was above 6%, and the Netscape Communications Corp. initial public offering, which marked the start of the Internet Revolution, was a year away.

The biggest danger to U.S. workers isn't overseas competition. It's that we worry too much about other countries climbing up the ladder and not enough about finding the next higher rung for ourselves.

[Papewaio]

Yes, thank you.
Outsourcing doesn't cost jobs- you could easily argue that it's created better jobs domestically in addition to the benefits you mention above. Of course, any politician that says outsourcing is good will likely be hanged from the nearest tree- people lose all rationality on that subject it seems.

I think D covered that as it meant that motivated workers won't be doing the menial jobs.

Pape: I agree with A, with a clarification: profitable for the companies engaged in it.
I disagree with D. The "motivated" workers are out of jobs as a consequence of outsourcing. Lots of white-collar jobs are outsourced - or are those workers, like you, and me, and Xiahou, not among the "motivated" ones?

I disagree with C2. It makes them more capitalistic, sure. But there is a contradiction between C2 and D. D implies that only menial jobs are being outsourced (I disagree with that, and I have shown evidence of that in a similar thread less than 2 weeks ago, I believe; but, for the sake of the argument, let's leave that aside for now); C2 claims it makes them "more educated".
Really ? They become "more educated" by doing menial jobs ?
Working on a, say, assembly line, improves your education, or skills ?

Nation, not necessarily individual becomes more educated. Wealth that is then injected into the education of the workers children or by the government into the whole infrastructure. Also as the menial jobs go across... agents, so do the team leaders, supervisors, 2nd and 3rd tier techs and project managers... over the long term the nation that it getting the outsourcing will benefit.

Look at India, outsourcing with call centers for the likes of HSBC. Then software and now drafting, accounting and a lot of other jobs. Also a lot of Indians who went overseas and gained skills now are back creating outsourcing companies.

The "motivated" workers are out of jobs as a consequence of outsourcing. Lots of white-collar jobs are outsourced - or are those workers, like you, and me, and Xiahou, not among the "motivated" ones?

Motivated, as in when the world changes and they lose their jobs, they take the oppourtunities presented to them.

As for myself I work for a telephony outsourcer and have in the past been made redundant a few times. Each time I have moved on, and worked my way back up and beyond to better things.

I don't like outsourcing because it is a threat to *me*, but I do see the global benefits of it. And the best way to combat a threat is to understand it and out do it.

[Blodrast]

Pape: You're mostly reinforcing an aspect that I already agreed with: that it benefits (a lot) the outsourcee (yay, making up words is fun), i.e. the country that stuff is being outsourced to.

If you take another look at my post, you'll see that I agree with most of those benefits. My main dislike was with its effects on the outsourcer.

Motivated, as in when the world changes and they lose their jobs, they take the oppourtunities presented to them.

Sarcastic translation (not referring to you, or me, or anybody in particular, but in general): When they lose their jobs, they take whatever jobs they can get, even if it's something they're overqualified for, and below their skill levels, just so they can keep paying the bills.

This is one of the beefs that I have with Ice's article as well: it says that college-grads have jobs - but it doesn't specify what kind of jobs; are they all working in the field, and at the level that they are educated for, and capable of ? I have my doubts, judging by the people I know.

Ice: thank you for the articles, they were quite interesting. And thank you for putting time and effort into this discussion. I agree with a lot of stuff in there, but I disagree with some bits (but I'll bet you expected that already ) :

- If we're outsourcing the white-collars, who exactly remains here to DO the actual innovation that they talk about as being the most important thing (and the only one that US is gonna remain the top dog for) ?
Innovation, as in research-derived innovation right ? The same research that is being outsourced, as well, to China and India, for example ?

- college-grads have jobs - great, but see above: what kind of jobs ? The article doesn't specify that. I know of programmers who work waiting tables; they have jobs, sure enough; is that the best society can get out of them ? Think what you will.

America's strongest suit is innovation, which will always create new high-paying positions

I'm sorry, I read it, but failed to understand how exactly innovations will keep creating jobs at the same pace that jobs are being outsourced. Are we "innovating" like crazy and I'm just not aware of it ? Must be, I guess...

As for the innovators... as I pointed out, with some figures, in the similar thread we discussed a while ago, it is research, and the innovators, that are being outsourced as well. I mentioned there IBM, Intel, research centers opening in China, India...
Creation of new jobs ? Let's see, Intel fired 9500 people, they froze hiring, are running like crazy after interns, and will open research lab in South Asia. Yup, plenty of new jobs created at home, clearly.
And don't tell me those jobs are not needed, because if they weren't, they wouldn't hire interns at the crazy pace that they are.

As for adapting, and improving, that's pretty easy talk when you're in your twenties or thirties. Try competing with a fresh spiffy college grad when you're 50 or so. We'll see who wins in flexibility and adaptability...
But I guess you don't need to live or have a job after you're 50, right ?


And, to clarify my stance, no, I haven't lost my job because of outsourcing, or anything of the sort.