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The FRIGGIN' HUGE Offshoring Thread!

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  • krunky
    Eternal Companion
    • Jan 2004
    • 726

    The FRIGGIN' HUGE Offshoring Thread!

    {I dedicate this bit to Berry, owner of this site, with much love and hopes for his success. I don't know Berry at all, but it seemed fitting - and y'all know what a softy I am deep down...I apologize to Berry in advance for how monstrously long this first message is...}

    This is a thread about outsourcing and long-term economic planning. There are lot's of places you can get information on this stuff. A lot of the available information is "expert" op/ed crap from people that never held a real job in their lives.

    In late 80s and early 90s people like Alvin Toffler ("Future Shock," "Third Wave") convinced me that Hi-Tech was an extremely important phenomenon and that our culture would tend to run somehow parallel to the trends in that "industry." Clearly, Hi-Tech is a dominant force in american culture. Some people even have "techno-lust" - which is sort of the desire for continually more and faster of their chosen favorite Hi-Tech gear.

    I read a site called Slashdot from time to time because I need to be told what might be going wrong with my home network and I am a DIY kind of person. Slashdot "geeks" are continually discussing the ramifications of Open source Software, Linux, the GPL, and a whole host of other things too. They have been absolutely furious about the massive shift to send many jobs "offshore" - away from the U.S. and the other western countries. They have been discussing the offshoring phenomenon for at least three years at this point and many of the participants have refined their views to razor sharpness. Much of what you will see in this initial message is documented from that site (with hopefully correct URLs provided).

    My statement of the facts:
    An untold number of jobs are being offshored. These jobs range from simple manufacturing, textile, agricultural positions all the way to more complicated programming, accounting, engineering, and managerial jobs. H&R Block offshores sensitive tax return data to India. Deloitte and Touche offers offshoring services to prospective clients. U.S. states are offshoring call centers. Many federal jobs are likewise outsourced (or turned over to prison labor, but that's another story). And it goes on and on and on...

    It is my opinion that everyone is training their future competition. H&R Block CEOs are all smiles today, but their myopia might mean future competition from their offshore counterparts. How soon before Deloitte & Touche is little more than an annoying middleman for services other corporations can get for themselves? Is there some reason that these foolish companies believe that people smart enough to compete with the likes of coders, accountants, engineers, and lower management cannot just form their own corporations and compete directly with them?

    Call me crazy, but this all seems very "not smart" to me...

    Let's have a look at some other opinions on the issue:


    "Intel CEO: Let's end political games and compete"

    {Edit: These are statements made by Intel CEO Craig Barrett:}

    Intel has had about 40% of its employees outside of the United States for the past two decades. What is new is that the character of those jobs is changing. It used to be mostly manufacturing production. Now it is increasingly white-collar or engineering jobs offshore as well. The big change is you've had a one-time-in-the-history-of-mankind event take place in the past decade. You almost instantly had half of the world's population pulled into the world's free economic system. If you take China, India, Russia and the other Eastern European countries, that's about 3 billion people.

    Education is probably the most important - and I'd further refine it to K-12. The university education system is healthy. Another significant area is research and development (R&D) investment that is government funded.

    The United States still is the world's biggest, most productive economy. But none of that guarantees you lack of competition. So when my grandkids come to me and ask, "What should I major in?" I tell them, "Get the best education you can; that's really all that you have to go on. Then go do something that you really like to do." So sure, it's so easy to find a guy from a steel mill or a textile mill, or a software programmer who has lost his job, but if you want to be competitive, you have to compete around the world. Jobs are going to be around the world. I don't have a solution to that one. It's also disingenuous to say that because this one person lost his job, you have to do something totally different.

    You have to look at what it takes to compete. Until you're doing those basic things, I have relatively little sympathy on the issue of the competitive nature of the U.S. compared to other countries. We have to fix our education system. We have to invest more in R&D. And we have to be more consistent about our infrastructure if we want to be competitive. If you have a worse education, a worse infrastructure, and you spend less of your gross domestic product on R&D, what makes you think you should be in a pre-eminent position? So somehow we have to turn the debate around to say, "Life is tough. Life is not fair. You have to compete. It takes hard work to compete, so let's figure out how to compete." That's the debate we're not having.


    These are my own opinions:

    I think that it's stunning that a man that has made his fortunes on the back of american ingenuity and from the sweat of well educated americans can now claim that americans are just not educated enough. But let's face it, his whole k-12 argument is a wild goose-chase with no substance. Americans built this idiot's company, I think many of them are well educated enough. What he doesn't want to talk about is how being well educated will not save them their jobs. He has no solution for the well educated person that can't find a job because he cannot work for a "globalized" wage and still live in the U.S.

    Seems like he wants more free R&D from the government too.


    "The Chutzpah is amazing" by Anonymous Coward

    1. Intel demands that the US gov't needs to invest in more computer R&D and schools.
    2. Intel demands that the US not change the stock rules. Strongly suggests to employees that they mail their congress critters their nice form letter.
    3. Intel demands that the US help keep the China market open for it.

    Intel repays these favors by:
    1. Demanding generous tax breaks which keeps money away from schools. If they had to pay the going rate, the school district in my area with an huge Intel campus would have 75% more money.
    2. Offshoring all jobs but exec board. 30-40% of all US Intel engineers (at least) are already from outsourcing countries(China/India). US based Technicians and fab employees are 90-100% US born citizens, but earn 1/3 to 1/4 what the engineers get.
    3. Enabling groups that want to limit freedom because they can make money from it: China, MPAA/RIAA, Patriot Act, Microsoft

    Corporations exist outside of states and countries and exist only to perpetuate themselves and the few that own massive quantities of the stock. Sure places like Intel grant stock to employees but the total amount is less that 10% of the total shares per grant period.

    Sure globalism happens, but I am a citizen of the US first and an employee second. Corporations should receive no special treatment because once they get they will have the in and make the locality turn and turn until all the blood is out of the stone. Then leave and blame the community for not making it a good place to keep high tech.

    Just leave me anonymous though, because as Intel employee, I can be terminated for speaking the truth. Being on the inside I see a lot more than most on /. can see, and I can tell you huge corporations care nothing for themselves first, second and third. Arnold switched sides for his own gain, these CEO are the exact same. They don't care who gives it to them, as long as they get theirs. And any location that counts on them will be burned when their loyalties switch as the money moves around.

    yes I'm bitter because they have killed the spirit of my town and they don't care.


    "Re:Hmmm" by Lemmy Caution

    It's three things: cost of living, cost of living, and cost of living. Until housing and such is as expensive in India and China as it is in the US and Europe, it will always be cheaper to employ people there, and always be impossible for labor in the US to compete on price.

    The trouble is that the growing inequity in the US means that there isn't any downward pressure on prices in the US, either. The people who are making it can keep the prices afloat, and insofar as the primary equity for most American families is their homes, they sure as hell ain't gonna make the C.O.L. lower via reduced housing prices.


    "It's not about quality, it's about cheap labor" by bangular

    The reason companies outsource to China, India, etc. is because they can get away with paying these people next to nothing. They literally wouldn't be able to legally pay these people those wages in the US because they are below minimum wage. It's not about quality or anything like that. It's because these people live in such poor countries they can be paid next to nothing. If they legally could, I'm sure these companies would have slaves. If they want to pay these people the SAME US wages I have no problem with that.


    "Re:It's not about quality, it's about cheap labor" by composer777

    There is just too large of a difference in pay, and I think we need to regulate "free" trade if we are to have any hope of preventing disasterous economic consquences. It's like an article that I have read on the CWA Union's website said, those that promote free trade basically are presenting an article of faith. They have nothing, they have no evidence at all that this will be good for society. In the mean time, they are making boatloads of cash during the "jobless recovery", and simply want us to just believe, without any evidence, that things will get better. It's pure BS, and I see no reason to believe these people, they have given me every reason not to trust them.


    "Re:Hmmm" by composer777

    Here's something to think about, when you hear someone from India on slashdot talking about how wonderful free trade is, remember that only a minority of people in India can access the internet, and they are relatively wealthy. The majority of people around the world cannot stand this exploitative form of trade. If democracy means anything to you, then you will be in favor of allowing people to govern their own lives, rather than have them run by the richest in that society.


    "Re:Hmmm; And don't complain about overtime" by composer777

    Rights are whatever people want them to be. That's the only reason people have rights to begin with, is because at some point everbody agreed that things like democracy, freedom of speech, freedom of unlawful entry, right to bear arms, would be a good thing to have in a free society. So, if enough people want it, then yes, it IS a right. It's worth thinking about.


    Re:"good for the economy" my ass.-outsourcing CEO' by Tablizer

    >Globalization where we don't insist foreign workers fall under the same EPA, OSHA, minimum wage, workman's comp, etc standards that we force on the employeers of our OWN workers. {edited back in for clarity} If you want to REALLY solve the problem, either force outside workforces to comply with OUR standards, or lower OUR standards of employment to meet theirs. CEOs and corporations are not "boogie men". We've set up a system that basically lays money at their feet and we complain when the bend over to pick it up. {end edited back in for clarity}

    Amen! Dumping cheap products and services in the US is a PRIVILEDGE, not a right of these other up-coming nations. Plus, many of the nations guilty of dumping have plenty of barriers against US goods and services. We are boxing and they are street-fighting. (Simon and Garfunkle reference)


    Re:"good for the economy" my ass.-outsourcing CEO' by swillden

    >If it was JUST about the shareholders, then CEO's would be outsourcing their jobs.

    The CEOs are outsourcing their jobs, or, more accurately, they're outsourcing their successors' jobs, and I think most of them realize it.

    How are they outsourcing their jobs? They're training a new crop of managers and workers overseas. How long will it take before those people realize that they have everything they need to start their own company and compete with their former employers?


    "Re:A truly global economy" by the_2nd_coming

    um, no, a true global economy would mean that workers can move to where the jobs are and that there is a world wide rate of pay that differs little from one location to the next.

    what we have is CEOs taking advantage of underpaid high tech workers in countries that have no labor laws.


    "Yeah..." by cybermace5

    We are not competing on basis of skill here, we're competing on the basic cost of living. Today's CEO's are pocketing the savings from outsourcing, and will be retired when the house of cards crashes down because no one here has any more money to spend.


    "Re:Yeah..." by cybermace5

    How does that help them? The U.S. is only 300 million people, and the world is six billion. So a poor, undeveloped country is going to improve by a few people receiving American money, while the actual work they've done has little value in their own country and is sent back to America? They are skipping the industrial development phase and going right to the knowledge worker phase, which means the infrastructure to support their way of life is located in America and not in their own country. This means that their economy can be kept artificially where it is, maintaining the supply of cheap labor.

    These countries need self-supporting industries, roads, hospitals, and the high-efficiency agriculture lifestyles that allowed us to become knowledge workers in the first place. By luring developing countries to skip directly to the desk jobs, we are sabotaging the development of a strong industrial foundation that can make these countries economically independent.


    "The Outsourcing Bogeyman" By Daniel W. Drezner

    Long, complicated, and I don't really buy into the reasoning - but it's worth reading to understand how an opposing view might operate.


    "This article is based on flawed assumptions" by puppetluva

    This author is using a series of flawed assumptions/myths that I'd like to debunk:

    1) Outsourcing is only happening to menial jobs. The author first states that "the activities that will migrate offshore are predominantly those that can be viewed as requiring low skill since process and repeatability are key underpinnings of the work"

    Software Development is not "low-skill". Repeatability for complex processes is a complex achievement. Nearly all of technology/science is concerned with repeatability.

    2) What is better for the global economy is better for the American economy.

    Let's say that China becomes even more of an economic powerhouse, the world economy becomes more efficent, and America gets beat out of many major corporate and employment deals to EU companies. America will go into decline. This is neither good for American business nor is it good for American workers.

    3) What is good for American corporations is good for American citizens.

    These two ideas are increasingly at odds. Let's say Joe CEO, an American citizen, starts a car-building company and outsources everything but the CEO spot. Let's then say that he beats out every major American car manufacturer and takes their marketshare. THIS WOULD BE A DISASTER FOR EVERY AMERICAN WORKER BUT JOE. Joe might get rich, he might make a bunch of foreign outsources rich, but he has helped suck both money and jobs out of the country.

    4) Protectionism would hurt our economy because it makes the world economy less efficient.

    WRONG! This would only be true if America was an equal consumer of goods world-wide. America is, by far, largest world consumer of most goods. Channeling that purchasing-power back towards American goods and services would be a huge boon.

    5) Protecting globalization at the expense of American jobs will help american citizens by creating more jobs.

    The author's whole argument about outsourcing of jobs towards America is completely false. His numbers are made up, as well.

    6) It is the U.S. government's job to protect the global economy.

    WRONG! It is the U.S. government's job to protect US citizens in both the short-term and the long-term.

    7) It is patriotic to support free-market economies.

    WRONG! It is patriotic to support the well-being of your fellow countrymen and women. Supporting slave-labor in China that forces inequitable economies of scale in labor is tantamount to economic treason.

    People need to stop thinking in blindered terms of "free-markets are good" and need to start thinking at a more sophisticated level about these problems. I'm ashamed at the trite cliches and hackneyed arguments put forth in this poorly-written article.


    "WRONG! (using caps like you)" by sulli


    NO IT WOULDN'T (using caps like you), unless every worker worked in his particular industry. Which every worker does not. We have a very diverse economy which survives these kinds of industry specific disruptions remarkably well.

    America is, by far, largest world consumer of most goods. Channeling that purchasing-power back towards American goods and services would be a huge boon.

    Import substitution, the strategy you recommend, has been a massive failure in all economies where it has been tried. Everyone's favorite bad guy India used this strategy for decades and hardly grew at all - after India modernized its economy in the 1990s it has experienced rapid growth. The same was true for Latin American countries like Brazil and Argentina.

    Back to the outsourcing issue, the problem I see is the tax break favoring it. This actually provides an unnatural incentive to invest overseas that gives it more value than it really has in the marketplace. We should definitely get rid of that in favor of a fairer corporate tax structure.


    These are my own opinions:

    I think it's interesting that previous commentator refers to what were two "shining" examples of prosperity (under the guidance of the IMF, and Argentina esp. was the much touted example of what doing things the IMF way could get you). Both are now bust. Brazil is so naughty that it's new leftist leader is regularly in very hot water with the U.S. white house administration, and he even claims that the U.S. is trying to kill him. In Argentina the people are living hand to mouth.

    Examples of boom and bust. Wait for it India...


    {continued in next message}
  • krunky
    Eternal Companion
    • Jan 2004
    • 726

    continued from previous...

    {continued from previous...}

    "How many butlers does someone need?" by khasim

    "Most jobs will remain unaffected altogether: close to 90 percent of jobs in the United States require geographic proximity. Such jobs include everything from retail and restaurants to marketing and personal care -- services that have to be produced and consumed locally, so outsourcing them overseas is not an option."

    Do you want fries with that?

    So, instead of working and actually PRODUCING something, we will become a nation of burger flippers.

    "There is also no evidence that jobs in the high-value-added sector are migrating overseas."

    Which jobs would that be? Any specifics? Please do not say "prostitute".

    "The parts of production that are more complex, interactive, or innovative -- including, but not limited to, marketing, research, and development -- are much more difficult to shift abroad."

    Incorrect, R & D is moving overseas.

    "As an International Data Corporation analysis on trends in IT services concluded, "the activities that will migrate offshore are predominantly those that can be viewed as requiring low skill since process and repeatability are key underpinnings of the work."

    Yet I keep seeing complaints about how many PROGRAMMING jobs are moving to India.

    But I don't know of anyone who claims that programming is "low skill".

    "As for the jobs that can be sent offshore, even if the most dire-sounding forecasts come true, the impact on the economy will be negligible."

    Then there are a few paragraphs devoted to debating whether the predictions are good or bad. Whatever. Facts are easier to deal with.

    "There is no denying that the number of manufacturing jobs has fallen dramatically in recent years, but this has very little do with outsourcing and almost everything to do with technological innovation."

    So, the FACT is that there are FEWER manufacturing jobs. Well DUH!!!!!

    Now they are arguing that the FEWER jobs are NOT the result of offshoring.

    So, we don't have a "rust belt" because we still crank out the same PRODUCTS in the same QUANTITY but we do it with FEWER PEOPLE?

    I don't believe that the FACTS will support that.

    We've lost the jobs. They are now being performed overseas.

    "If outsourcing were in fact the chief cause of manufacturing losses, one would expect corresponding increases in manufacturing employment in developing countries."

    Incorrect. It is possible to lose 100 manufacturing jobs in the US and only gain 10 robot-assisted manufacturing jobs in other countries.

    So, the same number of PRODUCTS are being produced, but fewer people are doing it and those people are NOT US citizens.

    "The fact that global manufacturing output increased by 30 percent in that same period confirms that technology, not trade, is the primary cause for the decrease in factory jobs."

    But the technology is NOT in the US. The jobs are NOT in the US. Rather than pay to upgrade the US factories, the jobs are going overseas.

    "What about the service sector?"

    Service sector: burger flippers, prostitution, butlers and such.

    "For example, a Datamonitor study found that global call-center operations are being outsourced at a slower rate than previously thought -- only five percent are expected to be located offshore by 2007."

    Dude, "global call-center" being outsourced would have to go to MARS. We're looking at US jobs here.

    "Delta Airlines outsourced 1,000 call-center jobs to India in 2003, but the $25 million in savings allowed the firm to add 1,200 reservation and sales positions in the United States."

    Here's a link to show how good Delta is doing.

    And I quote: "The nation's third-largest airline said it lost $387 million dollars."

    So, they "save" $25 million by outsourcing, but then they LOSE $387 million?

    "An Institute for International Economics analysis of Bureau of Labor Statistics employment data revealed that the number of jobs in service sectors where outsourcing is likely actually increased, even though total employment decreased by 1.7 percent."

    So, more people LOST their jobs, but that's a good thing?

    "How can these figures fit with the widespread perception that IT jobs have left the United States? Too often, comparisons are made to 2000, an unusual year for the technology sector because Y2K fears and the height of the dot-com bubble had pushed employment figures to an artificially high level. When 1999 is used as the starting point, it becomes clear that offshore outsourcing has not caused a collapse in IT hiring. Between 1999 and 2003, the number of jobs in business and financial operations increased by 14 percent. Employment in computer and mathematical positions increased by 6 percent."

    You don't compare one year to another.

    You compare each year to the year before and that shows a TREND over TIME. So, instead of comparing 2004 to 2000, you would start with 1994 and see what changed in 1995 and compare that to 1996 ... until you get to 2004.

    "A study by the Federal Reserve Bank of New York suggests that the economy is undergoing a structural transformation: jobs are disappearing from old sectors (such as manufacturing) and being created in new ones (such as mortgage brokering)."

    But WHY is that happening? Is it because people do not WANT to work in manufacturing? Or is it because mortgage brokering is the only option left once the manufacturing jobs have left?

    One mortgage broker could handle 100 manufacturing workers' mortgage needs.

    What happens to those other 99 workers?

    "Once the structural adjustments of the current period are complete, job growth is expected to be robust. (And indeed, current indicators are encouraging: there has been a net increase in payroll jobs and in small business employment since 2003 and a spike in IT entrepreneurial activity.)"

    But that "net increase in payroll jobs" has been in low-pay service jobs.

    While the "IT entrepreneurial activity" is not a "payroll job".

    "Offshore outsourcing is undoubtedly taking place, and it will likely increase over the next decade. However, it is not the tsunami that many claim. Its effect on the U.S. economy has been exaggerated, and its effect on the U.S. employment situation has been grossly exaggerated."

    Perhaps, but none of the information presented supports that statement.

    Good wage manufacturing jobs are GONE.

    They have been replaced with low-wage service jobs.


    "Unpopular Truths About Outsourcing" by Nova Express

    I know it's always bad form to inroduce verifiable facts into a the latest Slashdot two-minute hate, but Daniel T. Griswold of the Cato Institute [] has a rather different (and seemingly more informed) view of outsourcing than most expressed in this thread. In his article in the May 3, 2004 issue of National Review [] (which does not appear to be online for non-subscribers), he makes the following points:

    ***America is actually a net benificiary of outsourced jobs (i.e., more money comes in from foreign countries outsourcing jobs to the U.S. than are lost outsourcing jobs from the U.S. to foreign contries). "In 2002, U.S. companies exported $14.8 billion worth of computer, data-processing, research, development, construction, archicetural, engineering and other IT services. During that same year, America imported $3.9 billion of those same kinds of services. So for every dollar Americans sent abroad for outsourcing, the world sent more than three dollars to the US. for 'insourcing.'"
    ***According to a 2003 study by the McKinsey Global Institue, every $1 spent on foreign outspurcing creates $1.12 to $1.14 of additional economic activity in the U.S.
    ***The vast majority of job losses due to outsourcing have been for lower skill jobs. Between 1999 and 2002, IT jobs went from 6.24 million to 5.95 million. However, during the same period of time, those requiring a relatively high level of training (i.e., an associates degree or higher) actually increased, from 3.43 million to 3.51 million.
    ***If you use the saner baseline of 1998 rather than the peak of the dotcom bubble, things look better still. Current IT employment levels are equal to those of 1998.
    ***"Domestic software, computer, and communications services accounted for a combined 4621 billion in 2003, up from $510 billion in 1999."
    ***Far more people loose their jobs to technology or domestic competition than outsourcing.
    ***The total outsourcing between 2000 and 2015 is only projected (by Forrester Research) to be 3.3 million jobs, or about 220,000 a year. This is a fairly miniscule number for an economy that employees 137 million, where an average of 350,000 million people file for unemployment every week even in strong economies, and which creates and average of 32.8 million news jobs (while eliminating 31 million, for a net annual gain of 1.8 million jobs) every year.
    ***Outsourced jobs tend to go to countries that emulate the United States with low taxes and deregulated economies, and the foreign companies jobs are outsourced to tend to buy American equipment and services to do the job.

    A lot of the reason you see so many complaints about outsourcing on Slashdot tends to be the reinforced tendencies of self-selected sets. The people who do lose their job to outsourcing are the ones that complain loudest and longest, and the ones whose sob stories get modded up. The people who haven't lost their job, or who work in a company that benefits from "insourcing," have no particular reason to speak up. The fact is, outsourcing is just one of the more painful parts of free trade, but free trade improves the lives of everyone. You have to be able to look at the big picture to see that.


    Re:Unpopular Truths About Outsourcing by silverbax

    These are interesting points. I do see that you've made no mention of the huge tax breaks that companies are currently getting by outsourcing.

    These same breaks are illegal for citizens.

    The argument that this is 'just part of free trade' is only valid if you ignore the fact that laws are constantly being re-shaped to allow and encourage corporations to dump resources oversees. In addition, financial analasis is generally rotgut at best. Find me a noted economist who can prove numbers showing the benfits of outsourcing and I'll show you two who have just as much evidence of the opposite.

    The basic premise is this: If the U.S. corporations are allowed to circumvent free trade, they will do so. This will result in lower wages across the board. Claiming that it's okay because the jobs lost are less skilled is ignoring the fact that the VAST MAJORITY of paychecks in the U.S. fall into that category, and all of those meager paychecks are used to purchase services from those of us who hold better jobs. I owe my job to Wal-Mart employees and truck drivers.


    "Re:Unpopular Truths About Outsourcing" by mabu

    >A lot of the reason you see so many complaints about outsourcing on Slashdot tends to be the reinforced tendencies of self-selected sets.

    Oh, and yours isn't?

    The National Review. Shill for selected sets of political agendas propped up by the likes of Pfizer, Merck and Halliburton. There's a publication that's the bastion of objective and well thought out journalism.

    Oh, and let's talk about the "distinguished" CATO Institute, a right-wing organization masquerading as libertarian to further the agenda of a select group of uber-powerful business interests. CATO was founded by a huge grant from a Chemical/Petroleum industry heir named Charles Koch.

    * Cato leads the right-wing's push for privatization of government services. In 2001, the Washington Post, noting Cato?s influence, said it "has spent about $3 million in the past six years to run a virtual war room to promote Social Security privatization."

    * Cato supports the wholesale elimination of eight cabinet agencies - Commerce, Education, Energy, Labor, Agriculture, Interior, Transportation and Veterans Affairs - and the privatization of many government services.

    * Right-wing foundations that fund Cato include: Castle Rock, Sarah Scaife, Koch Charitable, Olin, Earhart, and Bradley Foundations.

    * CATO's corporate benefactors include:
    Philip Morris, R.J. Reynolds, Bell Atlantic Network Services, BellSouth Corporation, Digital Equipment Corporation, GTE Corporation, Microsoft Corp- oration, Netscape Communications Corporation, NYNEX Corporation, Sun Microsystems, Viacom International, American Express, Chase Manhattan Bank, Chemical Bank, Citicorp/Citibank, Commonwealth Fund, Prudential Securities and Salomon Brothers. Energy conglomerates include: Chevron Companies, Exxon Company, Shell Oil Company and Tenneco Gas, as well as the American Petroleum Institute, Amoco Foundation and Atlantic Richfield Foundation. Cato's pharmaceutical donors include Eli Lilly & Company, Merck & Company and Pfizer, Inc.

    I wonder how many of the above companies are outsourcing? Probably every one of them.

    The Washington post characterize'd CATO's agenda as, "A soup-to-nuts agenda to reduce spending, kill programs, terminate whole agencies and dramatically restrict the power of the federal government." That sounds really good in theory, but the underlying agenda of CATO is to pump out polarized "research" to further this cause, which ultimately divests critical responsibilities to a small set of mega-corporations, which probably have less a sense of responsibility and ethics than the government.

    I'd be real scared of the future they're promoting.



    ***Marc Andreessen made 100s of millions of dollars shortly after graduating from UIUC. Today's graduates of the same university face moving back in with their parents. "Fuck that, I got mine!" []
    ***Brian Behlendorf decided he'd rather go to India [] to recruit software engineers than help out the graduating classes of 2001-2004 here in the US.
    ***Robert Malda stood idly by and said NOTHING while his company offshored its flagship product [].

    Miguel de Icaza, Bruce Perens, Eric Raymond, and Linus Torvalds all got rich off the Open Source Movement. What do you have to look forward to?


    "In My Opinion: Bush and Democrats: Night and Day Views on Offshoring"
    By Morton Bahr, CWA President


    In light of today's "jobless recovery," some economists are starting to doubt the orthodoxy of free-trade-is-always-good. Washington Post business columnist Steven Pearlstein recently wrote: "If you peel back the arguments in favor of offshoring, what you finally end up with is an article of faith" - that word again - "faith that history will repeat itself and the U.S. economy will quickly generate enough new jobs in higher-paying industries to compensate for the ones lost to trade. What I've yet to see, however, is even an educated guess as to what those jobs might be."


    In response, bills have been introduced in Congress and in several states to ban use of taxpayer money for outsourcing, eliminate tax breaks for moving jobs abroad, give consumers a right-to-know when they are dealing with overseas call centers, and require advance notice of outsourcing.

    Above all, we need leadership in Washington that sets a different tone when it comes to corporate accountability and responsibility to our nation.

    We know what the Bush administration believes - offshoring is "a good thing."

    And we know that CWA's choice for president, Senator John Kerry, believes otherwise, and has blasted "Benedict Arnold CEOs" for abandoning America.

    It seems that today, America's greatest innovative talent lies in finding new ways to do more and more sophisticated job functions in lower wage countries.


    "Fair Tax Where the Wealthiest and Corporations Pay their Share - Tax Wealth More than Work; Tax Activities We Dislike More than Necessities"

    The complexity and distortions of the federal tax code produces distributions of tax incidence and payroll tax burdens that are skewed in favor of the wealthy and the corporations further garnished by tax shelters, insufficient enforcement and other avoidances.

    Corporate tax contributions as a percent of the overall federal revenue stream have been declining for fifty years and now stand at 7.4% despite massive record profits. A fundamental reappraisal of our tax laws should start with a principle that taxes should apply first to behavior and conditions we favor least and pinch basic necessities least such as the clearly addictive industries (alcohol and tobacco), pollution, speculation, gambling, extreme luxuries, taxing work or instead of the 5% to 7% sales tax food, furniture, clothing or books.

    Tiny taxes (a fraction of the conventional retail sales percentage) on stock, bond, and derivative transactions can produce tens of billions of dollars a year and displace some of the taxes on work and consumer essentials. Sol Price, founder of the Price Clubs (now merged into Costco) is one of several wealthy people in the last century who have urged a tax on wealth. Again, it can be at a very low rate but raise significant revenues. Wealth above a quite comfortable minimum is described as tangible and intangible assets. The present adjustment of Henry George's celebrated land tax could also be considered.

    Over a thousand wealthy Americans have declared, in a remarkable conflict against interest , that the estate tax, which now applies to less than 2 percent of the richest estates, should be retained. The signers of this declaration included William Gates, Sr., Warren Buffett and George Soros. Mr. Nader does not believe that "unearned income" (dividends, interest, capital gains) should be taxed lower than earned income, or work, inasmuch as one involves passive income, including inheritances and windfalls, while the latter involves active effort with a higher proportion of middle and lower income workers relying on and working each day, some under unsafe conditions, for these earning.


    "China and Japan reject Bush's currency pleas"
    By Peronet Despeignes, USA TODAY

    BANGKOK - President Bush failed in weekend jawboning sessions to persuade either China or Japan to quickly allow the value of their currencies to rise against the dollar, which would give U.S. manufacturers a boost as they try to sell their goods into Asian markets.


    And I thought we were selling so much stuff to these now vastly wealthy economies...


    • Bill
      Champion of the Balance
      • Feb 2004
      • 1063

      Do you work?

      (Fair question asked of me previously by Jerico).


      • krunky
        Eternal Companion
        • Jan 2004
        • 726

        I do - but I never discuss my own particulars publically. I can be nosy myself, but I prefer not to give many details on my own situation. I only mentioned Berry - not because I know his particulars in detail - but because he has mentioned some of his particulars elsewhere in a thread he began about having been laid off.

        But in a way, what does it matter? Even Warren Buffet can decide that a tax break that benefits him harms everyone else. He hasn't taken a stance against offshoring, but he yet might. Some people need to see that things are going to go underwater for themselves before heading for the higher ground.

        My interest in Hi-Tech stems from my own use of technology and the fact that I have countless friends and former lovers involved in that industry. I know hardcore programmers that have moved away, I know teachers that are losing work because there's no point in teaching a skill for which there are no jobs, etc, etc. etc. The Hi-Tech story is THEE STORY in my part of the world - and there's not much replacing it so far.

        We farm to a limited degree but there's not much work there and much of it goes to poorly paid illegal workers. We have no significant manufacturing base any longer - not that can put the many out of work back to work. Educated "knowledge work" is being offshored unless the physical presence of the person is required for the work. Managers are reaping temporary benefits in quarterly earnings until they too are made redundant by processes for which they are largely responsible.

        In all seriousness, what does that leave us?

        Not unlike the CEO of Intel, if my nephew or niece asked me for career advice I'd probably suggest something like becoming a doctor, plumber, or construction worker. Or I might just shrug and say: "Fuck if I know..." I'd like for them to become better educated, but I can't from here decide if a better education is an end to itself or if it has a practical function. Some of the wealthiest people I know only graduated high school - they did not waste time with an education, or as some do waste even more time by going into debt to acquire said education. Thankfully, these kids have it made - their dad will pay their way through school.


        • Bill
          Champion of the Balance
          • Feb 2004
          • 1063

          I respect that. The question wasn't a shot, I was simply trying to get some perspective and context.


          • Jules
            Eternal Companion
            • Jan 2004
            • 609

            Krunky - I've been working in software for 12 years now, and while I have my concerns (as outlined in the other thread) about outsourcing, most of those Slashdot posts I found annoying.

            As in, like this wasn't an issue when you bought that $10 pair of jeans? Or any other amazingly cheap imported goods. Did you see many chapters from the programmers local 086 marching against globalisation in the late 90s?? Not when there were potential fortunes to be made in the Internet goldrush - and there's never been much concern for all the jobs and shops that websites have replaced. In fact, you'll often see much the same defences as are used for outsourcing trotted out by people in the software industry to defend what they're doing.

            So what I'm saying is that it looks very self-serving to me - we weren't interested while it was happening to others, now that it's happening to us, everyone should be warned less it happens to them. Which is funnily what the British miners were saying in the 80s.

            Which isn't to say there aren't any good points there :

            1) What comes next - no one really seems to have a clue, other than that localised service based jobs are safe. Most of which are not wealth-creating (a builder at least creates an asset, a barman making a $10 cocktail merely creates a hangover), and therefore dependent on other people creating wealth and then spending it locally.

            2) "Life is tough. Life is not fair. You have to compete". What a great
            philosophy. And how convenient for those taking 5% off the income of all the competitors in the race . . .

            3) The point about K-12 education - that's an issue over here in the UK too. Results in education up to the age of 11 have improved and equalised (between sexes and races) massively. At the age of 13-14 it goes into reverse, with massive differences opening up. Children from Chinese, Indian and Jewish families all do better than white Christian, Carribean, Pakistani or Bangladeshi families. White girls start doing better than boys.
            All groups are moving away from traditional (i.e. difficult) subjects like maths, physics, or studying a language. Physics has gone past the crisis point where EVERY graduate coming out of UK Universities would need to become a lecturer or teacher just to maintain the status quo. British business leaders say they are losing sales in Europe because they can't get fluent language speakers - and yet amazingly, enrolment on physics and language courses continues to fall. On the other hand, they're not exactly getting into the schools and telling the kids - study French and add $15000 onto your salary.

            So ideally what we need to do is export a distracting TV celebrity based
            culture to India and China to devalue the notions of intelligence or
            education over hair-care, and get their educational results falling quickly.

            'There are 10 sorts of people who understand binary. Those who do and those who don't.'


            • krunky
              Eternal Companion
              • Jan 2004
              • 726


              My concern is actually less with a single occupation or industry; like hi-tech stuff - even though it is the big story of the Bay Area, CA; and rather more with practically every other occupation effected. The offshoring phenomenon is not limited to hi-technology by any means.

              Just to illustrate (via quick google search):


              "States react as jobs head overseas" by Diane Stafford, Mar 15 '04


              "We got a wake-up call last year," said Sen. Joan Bray, a St. Louis Democrat and sponsor of one bill. "When we found out the Department of Social Services had contracted with a company that moved its call center to India, we didn't like the idea that we were paying good Missouri tax dollars to employ people overseas."


              What the story doesn't tell is how a person might be out of work, or in need of additional funds or services, only to call the state for help and be offered assistance by a call center worker in a foriegn country. In other words, a person that might well be desperate for work has just discovered that STATE FUNDED JOBS are also denied to him/her. That just seems obviously and painfully wrong-headed.

              I have heard of schemes for offshoring most newspaper staff, legal researchers, accountants, medical clerical staff, etc. Truly, no job that CAN BE OFFSHORED is safe.

              Some of these jobs are knowledge-based also. I can assert that not every idiot off the street can properly research and write a legal brief. Not any fool coming off a bender can code an online store. Journalists are not previously known to be the dumbest people to walk the earth. Traditionally, all of those jobs require degrees of various types. People so trained made an effort of time, money, and brain processing cycles.

              And for what? To end up jobless, in debt, unable to declare bankruptcy against possible student loan debts that are exempted from bankruptcy procedures (I know people with that problem - and christ, even a corp can declare bankruptcy!). The scene here in the bay Area is ugly and the reason it doesn't get better is because there is no area of growth that isn't to do with one's physical presence - like retail sales and nursing staff. As you noted, not really wealth creating jobs - more like jobs to get by on.

              So yeah, it hurts me when I go somewhere and see some overly competent person doing a job that is far beneath their training - and I can smell them, I swear. I often turn to my partner and note: "Did you notice how extremely well-spoken and efficient our waitress is tonight - probably a programmer or former attorney..."

              Honestly, you can tell.

              And don't get me wrong - like that I might be slagging off more common laborers. Absolutely not. Not everyone has the inherent gifts to be a "smart" worker and I respect honest toil at ALL LEVELS. I strongly believe and support a living wage (which works to the advantage of many women in our sexist culture, sadly). I also respect the inherent dignity of any honest work. Truly, I am almost like a communist in that regard. My point is that surely there must be a way to monetarily reward the people that made the effort to become attys, journalists, professional staff, etc.

              Something is very wrong when we can hire foreigners to do the jobs that should rightfully go to Americans and Europeans. The need for the work is at least for now still generated largely by the states and the other western nations. The work is artificially denied to those countries that create it - and only for the short term, because I really do believe that a few more years of this and even $50 DVD players will be out of reach for people earning under $10 USD per hour in my part of the world.

              It is truly a race for the bottom, and the prize is utter bankruptcy because at some point there is no place lower to go.

              This is nothing more than temporary labor dumping against those foolish enough to allow it. I fear that the reprecussions will be felt for years, possibly the remainder of our lifetimes.

              I'll requote the next part because I think it is revealing of the natural economic growth that is actually needed in places like India. Growth that has not taken place, and lacking it India's new boom industries may leave ghost towns in their wake. All too much, too soon, and with no real Indian demand for the labor being done to continue a more natural economic progression. What the author missed was the fact that given a long enough period of time, 6 billion can artificially suck the wealth out of a mere 300 million with no problem. A Starbuck's barista doesn't really need a computer...most people don't. There's a secret no one wants to talk about...


              "Re:Yeah..." by cybermace5


              How does that help them? The U.S. is only 300 million people, and the world is six billion. So a poor, undeveloped country is going to improve by a few people receiving American money, while the actual work they've done has little value in their own country and is sent back to America? They are skipping the industrial development phase and going right to the knowledge worker phase, which means the infrastructure to support their way of life is located in America and not in their own country. This means that their economy can be kept artificially where it is, maintaining the supply of cheap labor.

              These countries need self-supporting industries, roads, hospitals, and the high-efficiency agriculture lifestyles that allowed us to become knowledge workers in the first place. By luring developing countries to skip directly to the desk jobs, we are sabotaging the development of a strong industrial foundation that can make these countries economically independent.



              • Jerico
                Champion of the Balance
                • Jan 2004
                • 1577

                Originally posted by krunky
                Not unlike the CEO of Intel, if my nephew or niece asked me for career advice I'd probably suggest something like becoming a doctor, plumber, or construction worker. Or I might just shrug and say: "Fuck if I know..." I'd like for them to become better educated, but I can't from here decide if a better education is an end to itself or if it has a practical function. Some of the wealthiest people I know only graduated high school - they did not waste time with an education, or as some do waste even more time by going into debt to acquire said education. Thankfully, these kids have it made - their dad will pay their way through school.
                Good points. The use of a college education is questionable at this point. I recall Von Weiner a while back questioning college. Firstly, some people get degrees with which there are no large number of jobs. I'd guess there are a fair share of majors that fall under that, if not most. Then as time goes on, more and more people having the same degree with a finite amount of jobs... the field of science seems be real competitive right now. From what I know, the economy is bad in that field, not as many jobs as there used to be, with a lot of people looking for work. (I blame it on Bush, of course ;) ) I, not that long ago, applied for a job in clinical research where mostly all I would be doing is processing blood samples. I was told that were 163 applicants for such a simple-- not very skilled-- kind of job. I felt fortunate just to have been interviewed. So to be a basic kind of scientist, you might either have to be lucky to find a job, or you need to be a perfect fit-- right amount of experience with the right skills in the right area of research, etc..-- or you have to be skilled at "everything." "Hi, I have molecular bio skills, I have worked with animals, I have computer programming experience, I have studied philosophy, I am good at digital imaging, I can stand on my head, I can juggle fruit, and I'm good at break dancing." <-- Hire that guy! (I'm actually trying to be that guy-- I started taking college classes at 18 and still do to this day).
                But when you look at things, damn, it can be quite daunting. even depressing. wow what a "bright future" the youth of today have! Especially those uneducated ones with little or no skills, flipping burgers and/ or cleaning the toilets. The resilient people that Bill refers to just might be more super-human than most of us on here. Best of luck to them and us all

                maybe a better strategy is to not waste thousands of dollars into a single degree program. but take as many classes in different areas that you need without getting too much into the hole.... I wish I had a mentor to advise me when I was younger.... maybe I can time travel back and communicate with myself.
                I dunno.

                THE END
                \"Bush\'s army of barmy bigots is the worst thing that\'s happened to the US in some years...\"
                Michael Moorcock - 3am Magazine Interview


                • krunky
                  Eternal Companion
                  • Jan 2004
                  • 726

                  I have a friend that writes programs for the collation of research data for the wine industry. He tells me R&D is going offshore.

                  I have another friend that programs for a field called bioinformatics. He spent years and thousands to become a doctor. Then he spent years and many more thousands to become a programmer. Now he has employment making slightly less than good programmers were making during the boom - which is to say around $120K USD. That's good money, no doubt - but it's not great for someone that went extravagantly into debt and spent the better part of 15 years to get there.

                  When he couldn't find work for a year or so in his chosen field he helped build a gay porn website for $65 an hour. But he also happens to be gay and I think the owner of the site was putting the moves to him. Rarely do people make $65 an hour for simple web design work any longer. He was actually grossing more during that one year "consulting" than he now does with his full time job in his field.

                  Like me, but in his case because he's gay, he has no plans to have children. That's the savings that will enable him to get ahead ultimately.

                  Just don't have money. Survive for yourself while your family name dies out.


                  • Bill
                    Champion of the Balance
                    • Feb 2004
                    • 1063

                    "The use of a college education is questionable at this point."

                    Arguably, it is more necessary. I realize this is feeding Krunky's point, but when you have 200 applications for one position, the initial "weed out" is made a base levels. Like, does the candidate have a college degree? No? Into the crapper. Soon, we're down to 50 applications. Does the candidate have work experience (assuming it isn't an entry level job)? No? Into the crapper. We're down to 25. Let's start our review.

                    Sad to say, it is sometimes that simple.


                    • Jules
                      Eternal Companion
                      • Jan 2004
                      • 609

                      Krunky - I don't really buy the idea that countries need to go through various stages of development; look at telecoms in Africa, they're skipping right past laying down massive landline infrastructure to mobile. Why industrialise and put yourself head-to-head with China?

                      Nor do I quite buy the picture of Indian developers living in mud houses churning out web-sites for 30 rupees - the middle class of India is demanding the infrastructure - already doctors who previously were educated in India then left for jobs in the UK, are staying in India, because there is now demand for them. Foreign companies are selling cars to the Indian middle class.

                      Where I do agree with you is that if things go too fast, we could be living with the damage for a lifetime. I've lived most of my lifetime witnessing the damage caused by the previous transition (manufacturing to service) and all I would like to see is that we've taken some lessons on from that (massive unemployment = high crime and places no one wants to live in).

                      And what I'll finally say is - I take back what I said about Indian developers only being 60% of UK cost having seen you quoting figures of $120k for a good software developers salary. Even at the favourable pound to dollar ratio at the moment that's nearly double what I earn (and 40% of that goes in tax and NI!), and I earn (a) substantially more than the UK ave salary, (b) way over the ave. local salary, (c) more than the majority of UK developers I know and (c) have over 10 years experience and a degree from the best Computing course in the UK. So maybe 25% of US salaries is true, if they're 60% of UK rates.


                      • Jules
                        Eternal Companion
                        • Jan 2004
                        • 609

                        Oh, and the big money in software isn't in selling computers to Starbucks barristas. They might not need a computer, but they probably will have a cash or credit card, or cable TV, or an electricity bill, or a package delivered from DHL. There's a much bigger market for services than there is for computers.

                        (I read someone who compared computers to being a similar thing to electric motors in the early C20th - when homes would have an electric motor that could be used to power a sewing machine or food mixer - until it became cheaper to integrate them. Who uses their hob to boil water for coffee or grill to make toast, when we can use a coffee machine or toaster?).


                        • krunky
                          Eternal Companion
                          • Jan 2004
                          • 726

                          Some of the salaries were clearly inflated for a while - no doubt about that. But many of the problems that came with that temporary inflation remain in terms of the price of housing. Ideally, the bubble should have popped and prices for everything should have dropped at least a little bit - but what happened instead is that those that were able to ran in and continued to snap up the real estate and thereby kept floating the unrealistic prices. Interestingly, rents did drop somethimng like 25-30% - and this while real estate prices remained strong. Now it's like a risky bluff in a poker game - who will admit that their most expensive investments are valuated according to the prices created during a bubble?

                          And again, I know something similar is going on in London. Like the Bay Area itself, some of it may simply have to do with the limits of geography to support a growing number of people. Except that in the Bay Area much of the growing population supposedly cleared out. The freeways are dead compared to how they were during the boom - even during rush hours.

                          I'd say an experienced programmer would be glad to make between $80-100 nowadays, and it has to be understood that such a wage is at least partly relative to where one gets the job. I am naming what might be a good wage in SF, but it doesn't stretch that far in such an expensive area. Anywhere within an hour's drive is quite expensive in terms of the real estate.

                          Anyway, where I am the damage is quite severe in terms of the wages now possible versus what they can buy for one. I did actually move out as far as I could to benefit from better pricing for real estate etc. - but it's no better where I am. Local unemployment rates are said to be in the range of 15%. Many that used to commute to SF no longer do so and are putting the strain on the more local economy.


                          • Jules
                            Eternal Companion
                            • Jan 2004
                            • 609

                            15% sounds way high to me - that's what I was talking about on the other thread where you can reach points where a critical blow is made to communities - all those services like bars and resteraunts and delis and bakers - which are not 'neccesary', but are a MAJOR part of employment today (with so much neccesary work done elsewhere) start to go. And then once it becomes a depressing and unpleasant (or at least boring) place to live, the people who can flee to nicer areas. (And then the bohemian artistic but poor types move into the neighbourhood and make it attractive again!!)

                            Property prices : it's not just London, which has now stagnated; my flat has apparently increased in value nearly 3 times since we bought it 5 years ago. I don't believe this as a similar one has been on market at this price for 4 months now. Locally we've seen areas boom in price by 50% in a year too. That said, it is a boom town (boomed itself through the last recession) - only this morning there was an advert on local radio recruiting IT staff.

                            One reason the property boom has been maintained is that the interest rates have been pulled down - so even in earnings have fallen people can still service larger mortgages. What's going to be interesting is when interest rates rise, but salaries stay below inflation (which they have to if firms are to stay competitive. And indeed if they're based on what firms are EARNING, rather than what cash they can extract from foolish investors!!).


                            • Guest's Avatar

                              Originally posted by Bill
                              "The use of a college education is questionable at this point."

                              Arguably, it is more necessary. I realize this is feeding Krunky's point, but when you have 200 applications for one position, the initial "weed out" is made a base levels. Like, does the candidate have a college degree? No? Into the crapper. Soon, we're down to 50 applications. Does the candidate have work experience (assuming it isn't an entry level job)? No? Into the crapper. We're down to 25. Let's start our review.

                              Sad to say, it is sometimes that simple.
                              But the example I gave, the job listing listed Bachelors of Science degree as a requirement. Thus it's more likely ALL 163 of the resumes were B.S. graduates. This means there are a lot of educated people with the same degree looking for work even if it's a simple, entry level type of job.
                              So to weed out the not so good resumes, it's more like... unemployed? toss out. working, but is manager at Sports Chalet? toss out. Works in a lab, makes solutions, and sterilizes glassware, assists with experiments doing pcr, gel electophoresis... that's all?... toss out. Works in a biotech Co. with animal models, works in biohazardous conditions, has some experience drawing blood samples... Aha! there's a keeper!