6 million US jobs to move to India

Hey, if India has better engineering programs and more competent workers whose fault is that?

You're offering a false premise. We have plenty of competent workers with great track records. They have been very productive and have produced very high quality products. The corporate whiz kids are focusing on improving next quarter results. With slowing sales, the only way to improve profits is to cut expenses. They can put a short term band aid on their bottom line by hiring cheap foreign labor.

The shift to cheap foreign labor is at the starting point in the cycle. It remains to be seen if those cheap foreign workers can continue to maintain the quality and productivity of the American workers they have displaced. Likewise, we'll see if they have the same level of drive and creativity. Can they manage to get past the language, cultural and timezone barriers to be an effective and responsive development team for businesses whose customers are still primarily in the U.S. ?

"Check out your neighborhoold university and tell me if you find anyone in the computer science or engineering departments who speaks English. "

Maybe its time to rethink all these hidden types of foreign aid. Ironic that it is through an American employee's tax dollars, that we pay for the education that trains foreigners who can then replace that American through offshoring.

That's the key words. As long as I can understand them on the phone, I don't give a crap what country they are in...

A good chunk of them are in this country, taking jobs away from your neighbors.

But then again, we do live in a world economy........

Al Gore told us that information technology would provide tomorrow's jobs. But he didn't tell us we'd have to move to India to get them.

No. Their parents are being thrown out of professional level engineering jobs that are being handed over to a bunch of third world wage slaves. And they're sending their kids to law school, where the real money is.

My son graduated with a 4.33 GPA and enough AP credits to be a sophomore in college when he plucked his high school diploma off the podium. He had his sights set on a degree in astrophysics, but he also had signed up for the Marine Corps reserves. That fixed him up with 60 days of "sun and sand" in Kuwait last April. Upon his return, he has passed his California real estate sales license test and is learning the real estate business from the family of his former fiancee. Her family is from Mexico City. That high school Spanish class has morphed into real fluency. His clients now include English speaking Americans and Spanish speakers from both sides of the border. He's learning the business from people who are real successful entrepreneurs. He has also shifted from astrophysics to electrical engineering. I recommended that he specialize in building power systems. That kind of work needs onsite inspections and is unlikely to be outsourced. A competent electrical engineer and eventually a real estate broker too. Go with the flow.

6 million US jobs ???

As for those "low wages" .. just wait till the Unions get ahold of them .. won't be low paying for long

A good chunk of them are in this country, taking jobs away from your neighbors. WAIT! If they are in THIS country, then they ARE my neighbor as well, no? Or are you only speaking of my white neighbors?

And what do you do, smarty pants?

Homeland Security is hiring workers. They need more airport screeners to look at xrays of people's socks, underwear, toothpaste, shaving cream, calculators, blowdryers and the occasional spatula. The pay is somewhat less than a professional IT worker is used to but hey, it beats unemployment.

Due to some ordering snafus for my new PC, I had to make multiple telephone contacts with Dell personnel.

I'm very satisfied with Dell's products and service, save one thing. Of the 6-8 people I talked to as they tried to shuffle me to the right department, all but 1 were Indian, and we had real problems communicating.

Also a satellite delay that didn't help. I'm in OKC and I think Dell is in Texas.

Does anyone know If Dell's moved their customer support to India?

>>>Hey, if India has better engineering programs and more competent workers whose fault is that? Our kids are too busy learning diversity to become engineers. <<<

Better is not the key word here, CHEAPER is. These corporations not care about quality anymore or even quality of service. These corporations will cut every corner imaginable to save the almighty buck. Look at all the Craftsman power tools that are now made in China, most of it is garbage, works once then throw it away.

And then you hear of all the luxuries the CEO's have: 4 or 5 houses, private jets and limo's, unlimited borrowing from the companies coffers. It is all greed driven, pay the least for the manufacturing, keep the most for the CEO and his board of directors. If it's cheap enough, the consumer won't mind buying another one when the first one breaks.

The Big Myth About U.S. Manufacturing -- Fortune Magazine

October 29, 2001 | By Philip Siekman, Laurie Windham

Imports are pouring in, and 'everybody knows' that a service-oriented America is retreating from manufacturing. The reality: By a wide margin the U.S. is still the world's No. 1 industrial superpower.

It's like one of those tales you heard from your brother who got it from his friend whose wife's college roommate actually knew the sister of a guy who was on the elevator. In this case, the story is that the U.S. has abandoned manufacturing; making things isn't what we do anymore.

What's surprising is how many people believe this--union leaders, politicians, even the occasional business journalist. "Making things is out of fashion," said a front-page column in the Wall Street Journal not long ago. "Everyone...seems to be ditching factories." According to these people, the U.S. is a service economy. So it's obvious that manufacturing has been dwindling. Look at all those fleeing companies putting up factories in China and Mexico, where they pay $1 an hour or less for labor and then ship products back here. Hasn't this thrown millions of American factory workers out of jobs, forcing them to become hamburger flippers?

There's just one problem. The U.S. retreat from manufacturing is as much a myth as the one about alligators in the New York City sewers. Though it may come as a surprise to folks accustomed to seeing deserted, graffiti-sprayed factories from commuter trains in the Northeast and elsewhere, manufacturing output is higher than at any other time in the nation's history. It has also been growing faster than in any other advanced industrial country. And factory workers reduced to hamburger flipping are the rare exception. Manufacturing jobs--better paid than most people realize--are just about as numerous as ever.

It's true that manufacturing's relative share of the economy may be declining, though economists are wont to battle over this point. It depends on which of two calculations is used to measure trends in the contribution of various sectors to the gross domestic product, or GDP. Both come from the U.S. Commerce Department's Bureau of Economic Analysis (BEA). By one measurement, based on each year's "current prices" for each sector, manufacturing accounted for 16.4% of the GDP in 1998, the latest year for which the calculation has been made. That's a decline from 18.7% in 1987 and 26.9% in 1947.

The story is different, however, if the trend is measured in constant, inflation-adjusted dollars. Economists like Mickey Levy, chief economist at Banc of America Securities, believe that the BEA's constant-dollar data "are probably more accurate than current-dollar numbers in telling you manufacturing's contribution to real output." These show that manufacturing's share of the GDP, in constant 1996 dollars, has held steady since 1977--17.4% back then, 17.1% in 1998. The BEA has not done a constant-dollar calculation for the years before 1977, but some economists believe that manufacturing's share has declined little if at all since the late 1940s.

What really counts is that U.S. manufacturing, which contributed a staggering $1.43 trillion to GDP in 1998, is huge in absolute terms. It has been growing at a fast clip, especially since 1992, when the economy shook off the post-Desert Storm blues. From 1992 to 1999, in a period when the economy as a whole grew by 29%, the Federal Reserve's index of manufacturing output climbed 42%. In the same period, durable goods production--which includes tough-to-make high-ticket stuff such as computer equipment and motor vehicles--was up by an even greater 73%.

Not bad for a supposedly postindustrial society.

For sheer size and steep growth, no other country comes close to the U.S. in manufacturing. International comparisons are tricky because of different definitions and adjustments in currency exchange rates. However, using 1998 figures from the United Nations Industrial Development Organization, the value of goods manufactured annually by America's 380,000 manufacturing companies is more than 50% greater than what's turned out in Japan and a third larger than the combined output of France, Germany, and the U.K. No major industrial nation has matched the U.S. rise in manufacturing output since the early 1990s.

Manufacturing does employ a declining share of the U.S. working population, but that's not necessarily bad. A country's manufacturing prowess isn't measured by the number of people working in factories. If it were, China and India would be the world's leaders. In 1993, 111 million Americans were employed in non-agricultural jobs, 16% of them in manufacturing. Today the total payroll has grown to 132 million and manufacturing's share has declined to 14%.

That said, factory jobs are not disappearing. After peaking at an all-time high of 21 million people in 1979, U.S. manufacturing employment declined in the '80s, during all the restructuring and leaning down. But since 1991 the total number of men and women on the payrolls of U.S. manufacturing companies has hovered around 18.5 million--a period during which France and Germany lost two million manufacturing jobs. Right now, many American plants are turning down orders because they don't have enough workers.

The U.S. today actually has more manufacturing jobs than the payroll data suggest. Many jobs once included in the total are hiding under services. In the last decade, manufacturing companies have been paring away as much internal service activity as possible. When they haven't shrunk them, they have outsourced plant-maintenance staffs, computer-network support teams, and other services from lawyers to transportation experts. Counted under "manufacturing" when the workers were on the manufacturer's payroll, they're now in some other economic sector. Though they are contributing to the growth of services, it's manufacturing that they are serving.

Since U.S. manufacturing employment has stayed roughly the same, the huge increase in output is all the more spectacular. Output's up. Head count's flat. That, of course, is called productivity. It's what drives up the standard of living, since improved productivity leads to higher profits and better wages. In the U.S., manufacturing productivity has been increasing steadily for 20 years, outpacing the economy as a whole. It rose by 3.4% annually in the '80s and then powered up in the booming '90s. Between 1992 and 1999 it was up 31.6%, vs. 13.4% for the entire nonfarm business economy. Again, the U.S. leads the world. Output per hour worked in U.S. manufacturing is half again as high as it is in Canada or the U.K., a third again as high as in Japan.

Jobs in manufacturing are well worth having. One of the biggest canards is that U.S. factory workers are getting cheated--producing more while the pay stays the same. On a current-dollar basis, average hourly manufacturing wages of production workers increased from $7.27 in 1980 to a recent $14.37. Critics point out that while wages have been rising faster than inflation in the past several years, production workers haven't regained ground lost in the '80s and early '90s. Overall, in constant 1982 dollars, average wages have declined slightly, from $8.49 an hour in 1982 to $8.25 in 1999. What's wrong is the inflation factor being used when adjusting current dollars. Even the Federal Reserve Board has said that annual price inflation has been lower than reported. Many economists now agree that it was overstated by about one percentage point for decades. Correct for that and you have a significant gain in real hourly pay.

Some manufacturing jobs pay far more than is indicated by those dollar-per-hour figures, which are for blue-collar production workers eligible for overtime pay. Almost one-third of the manufacturing work force is made up of salaried, or exempt, workers who are ineligible for overtime: technical, professional, and supervisory employees. A recent survey by the U.S. Bureau of Labor Statistics (BLS) shows that if all full-time workers, both hourly and exempt, were included, the average pay in manufacturing in March 2000 was $16.21 an hour.

The biggest error in the debate over how much people earn occurs when only wages, not total compensation, are looked at. According to the National Association of Manufacturers, almost eight out of ten manufacturing companies have retirement plans. And in manufacturing, a higher percentage of employees receive employer-paid health insurance than in any sector other than government. According to that recent BLS survey, total hourly compensation for hourly manufacturing employees was $23.74 on average, counting $7.53 in benefits on top of the paycheck amount. Assuming a 40-hour workweek, annual compensation adds up to a shade under $50,000 a year.

One reason Americans think that manufacturing is declining is the concentration of national media people in New York. Decline is what these folks think they are seeing from commuter trains on the way to and from the office. Hit hard by defense cutbacks and industrial restructuring, New England and the Mid-Atlantic region have lost thousands of manufacturing jobs. But the old, multistory factories visible from the trains, built when every plant had a rail siding, have been replaced elsewhere with modern single-story structures that have lots of truck docks and big employee parking lots. They're usually located near interstates, not commuter railroads, and are often hundreds of miles away in the Southeast.

U.S. industries that you were absolutely certain are stone dead, such as textiles and apparel, aren't. Employment has declined in both businesses but for different reasons. In textiles, it's productivity. The Textile Manufacturers Association says it used to take 13 minutes to make enough cloth for a shirt. Now it takes three minutes. Despite sizable imports of cloth and apparel, production has increased. A simple measure that avoids the distortions of inflation and changing prices is the amount of fiber used by U.S. textile mills: up 22% since 1991 to 16.6 billion pounds, 89% of it American-made.

It's a fact that the T-shirt business is pretty much gone. Apparel makers have certainly not fared well. This is a busy-fingers business, and lots of it has gone to countries with low labor costs. While U.S. apparel output is down just 11% since 1992, employment has dropped from one million workers to 650,000. But the worst may well be over for American apparel makers. We're not going to get back the T-shirt business--and who wants it? Yet there are now six selling seasons for women's clothing, forcing garment makers to shorten their supply line so that they don't get hammered with out-of-season inventory or rapidly shifting tastes. Thus some production has stayed in the U.S. or even returned.

One surprise: Last year the U.S. exported $7.9 billion of apparel. Of that, $6.2 billion was actually pieces cut in the U.S. and sent to the Caribbean basin and Mexico to be sewn together. In other words, the skilled jobs--pattern making and cutting--are in the U.S.; the lower paying--sewing--are elsewhere. And three out of four yards of the cloth were made in American mills.

Don't get teary-eyed over photos of big, shut-down steel mills. In the early '80s, steel production in the U.S. was hit hard by recession. In 1982 total raw steel production declined 38% in just one year to less than 75 million tons. Since then output has trended upward to last year's 107 million tons, admittedly helped a bit, as were the textile companies, by friends in Washington who provide some import protection.

Steel's also a case of big gains in productivity. Much of the increased melt has flowed out of mini-mills, which recycle scrap in highly efficient electric furnaces. The minis, which now produce 46% of America's steel, have been installing new capacity almost as fast as it has been junked by integrated steelmakers, which produce virgin metal starting with ore. In 1982 it took more than ten man-hours on average to make a ton of steel in an integrated mill, a number that has since fallen by two-thirds. But Nucor, the leader in mini-mills, makes a ton of plate, bar, or rolled sheet in less than one man-hour and, in some cases, less than half an hour.

Whether the steel comes from U.S. or foreign mills, trends in steel consumption leave no doubt that the U.S. remains an industrial giant. Last year the economy used 128 million tons of steel, down only slightly from the record figure for 1998. Some of that steel went into construction. But most of it--despite decades of paring the amount of steel used in industrial products and substituting other metals and plastics--was food for a voracious manufacturing establishment.

What's made in the U.S. is world-class. Forget all that stuff about poor quality and no attention to detail. Turn off the TV and just recite along: Caterpillar, Cessna, Cisco, General Electric, Hewlett-Packard, IBM, Intel, and on through the alphabet to Sun Microsystems and Xerox. And don't forget those booming contract manufacturers producing infotech equipment for others: Solectron, SCI, Flextronics, and Jabil. All these electronics manufacturers have plants abroad but have also expanded production in the U.S. In every state, moreover, are world-class manufacturers most Americans never hear of: companies like JLG, which makes aerial platforms in McConnelsburg, Pa.; Gleason, which turns out sophisticated machine tools in Rochester, N.Y.; and Marconi Medical Systems, which produces extraordinarily complex medical equipment in Cleveland.

U.S. auto and truck assemblers also have become highly efficient, world-class producers. It's true that, as reported by the Harbour & Associates consulting firm of Troy, Mich., 27 U.S. auto plants have closed in the past 20 years. But Harbour also counts 22 plants that have opened, ten of them owned by Japanese and European companies. Since 1993 the number of U.S. autoworkers has increased from 862,000 to 1,030,000, an all-time high. The Japanese? About seven out of ten new Hondas and Toyotas sold in the U.S. are made in the U.S. by American workers. The Germans? Every sexy BMW Z-3 two-seater sold in the world is made in South Carolina. As for those stalwart Mercedes M-class SUVs, more than eight out of ten are built in Alabama.

American exports aren't all wheat, rice, and other agricultural products, which make up only 7% of the total. According to the U.S. Census Bureau, about 80% of America's $696 billion in exports last year were manufactured goods. And the U.S. accounts for about one of every eight dollars' worth of manufactured products in world trade. No country does more. Not long ago, Japan or Germany, those giants of world sales, vied for the top spot. They're now respectively in second and third place.

You're absolutely right: Imports have gone up faster than exports--by 87% since 1992, to a shade over $1 trillion in 1999, of which about 85% were manufactured goods. For some time the U.S. has bought more from abroad than it exported. In recent years the gap has widened mainly because the U.S. has prospered and the rest of the world has not: They're not buying, but America is. As the rest of the world economy recovers, the disparity will undoubtedly shrink. Meanwhile, busy U.S. factories need raw materials and parts from abroad. Industrial supplies account for one out of every five dollars in imports.

Don't forget Economics 101 and the concept called specialization according to comparative advantage. That's what's going on. Many other countries make things that have high labor content and thus are competitive only if wages are low. The U.S. builds sophisticated products in which labor content is low and the requirement for worker skills is high. Says Daniel Griswold, an economist at the Cato Institute: "We are a nation that has specialized in high-skilled, higher-end products. So we are an exporter of civilian aircraft, computers, space technology, and the like. And we will continue to expand those industries as we contract the lower-skilled ones." Since 1992, while apparel was declining, the Federal Reserve production index for U.S. output of industrial machinery more than doubled, and the output of electronic and electrical equipment almost quadrupled.

Most U.S. workers have nothing to fear from import competition. To start with, Griswold calculates, more than eight out of ten employed Americans are in jobs almost completely sheltered from foreign competition--most services, all government jobs, construction trades, and so on. Cheap imports are just a good deal for these workers and their families. Seven out of eight manufacturing workers also have little to worry about. They work in industries such as auto parts, food processing, pharmaceuticals, plastics, and steel. According to Griswold's calculations, imports account for less than 30% of the market in these products.

Most manufacturing capital isn't fleeing America. For every dollar U.S. manufacturers invested abroad in 1998, they invested more than seven dollars at home in plant, property, and equipment. Most of what's invested abroad doesn't go to low-wage countries. In the first place, over half of what the U.S. imports comes from Canada, Western Europe, and Japan, hardly low-wage producers. It's these countries that attract investment by U.S. companies, which are usually more interested in affluent customers than in low-wage workers. Out of the $27 billion invested in foreign manufacturing by American companies in 1998, four-fifths went to high-wage countries. A mere 7% of that amount, $1.7 billion, went to Mexico and China.

The real deal is investing in U.S. manufacturing, something the rest of the world has figured out. From 1994 to 1998, a bit over $147 billion was invested abroad by U.S. manufacturing companies. During that same period, $209 billion was invested by foreigners in American manufacturing. In other words, in the period following U.S. entry into the World Trade Organization and the North American Free Trade Agreement (NAFTA), 42% more capital flowed into U.S. manufacturing than flowed out.

This doesn't mean there's nothing to worry about. The outsized trade gap, some economists warn, could help bring on a recession. It's also true that some older workers and people stuck in one-industry towns and regions have been left behind as industry has restructured. Restructuring also has led to a need for higher-skilled, better-educated workers that much of our educational system seems unable to satisfy. All that needs to be fixed. But none of it contradicts two central points. In spite of what you hear, the U.S. hasn't been de-industrialized. And when it comes to manufacturing, no country is better at it.

I'mmm aaaaa computer consultant....

Au contraire, Homeland Security is NOT hiring workers. Last year they were laying off a bunch of their workers. This was a hot issue in my area of Pittsburgh PA, because we felt that the Pittsburgh airport bore a disproportionate share of the cuts.

Yes, Dell has moved customer support to India.

"In the next decade, as many as 6 million jobs might be sent to India and other nations by US companies in search of lower costs and a tech-savvy, English-speaking workforce," Goldman Sachs Group Inc. said in a recent report.

BULLHOCKEY!!

Have you called Dell for support recently? They are NOT tech-savvy (they read from a decision tree and constantly put you on hold when the tree doesn't conform to your problem which it rarely does). And they are barely English-speaking. Some times I go through two or three people before getting one I can understand.

This is why Dell recently moved their big corporate account customer service back to the states. Too many corp. customers bitching. Wish they'd do the same for the home office guyz like me.

Personally, I think all this "outsourcing" is gonna come back and bite alot of butts. The sooner the better.

After careful consideration of many threads on this outsourcing to India problem, here's my opinion: I want the cheapest prices for the products I buy. I am now retired (as of October 31st) and I want every dollar of mine to count. Why should I pay for the ridiculously high wages of high-living techies? They lived better than I did in their heyday, and they're still living better than I am in my retirement. I don't give a rat's patootie if their wages are brought down due to HB1 visas or outsourcing.

To see our future look at Mexico today.

I don't have to travel that far south, I can see it in Tejas already.

Mol As for those "low wages" .. just wait till the Unions get ahold of them .. won't be low paying for long

That may be our only hope. Introduce American-style unions into India, and internet law school correspondence classes.

Ain't facts grand ? :-)

I've called India a few times. Accomplishing what you say is a crap shoot.