Study: Outsourcing technology jobs strengthens U.S. economy

SFGate.com ^ | 3/29/04 | Rachel Konrad - AP

[NormsRevenge]

Outsourcing white-collar jobs to low-wage countries such as India and China has thrown some Americans out of work, but a new report predicts that the trend will ultimately lower inflation, create jobs and boost productivity in the United States.

The Information Technology Association of America, in a survey out Tuesday, acknowledges that the migration of tech jobs to low-paid foreigners has eliminated 104,000 American jobs so far, nearly 3 percent of the positions in the U.S. tech industry.

[Jeff Head]

harpseal

[rogueleader]

Outsourcing dramatically reduces labor costs

And our standard of living.

[AZLiberty]

No, it only reduces the standard of living of those who choose to compete directly with the offshore workers. It raises the standard of living of the rest of us here by lowering costs for almost everything, and it raises the standard of living of many people abroad who might otherwise think of joining organizations like Al Qaeda.

[edeal]

This has got to be a joke or perhaps their media relations have already been outsourced. With political savvy like this, it sounds like they may have hired some Republican strategists. Too bad they left out the part about how the hunger crisis can be solved by eating babies (2 fold benefit).

Please note, the last line was sarcasm, I do not think there is a hunger crisis, but babies certainly are delicious.

[vp_cal]

bookmark

[sixmil]

but a new report predicts that the trend will ultimately lower inflation

And on another thread "Inflation at its lowest rate in decades" or "Deflation could stall the recovery"

Software engineers have been particularly hard hit. Researchers at Global Insight Inc., which prepared the report for the ITAA, predicted that demand for U.S. software engineers would shrink through 2008.

"This report shows that, assuming the recovery continues, the number of IT jobs will actually increase."

Trading software engineering jobs for IT jobs? This is good news?

Indian programmers earn roughly one-sixth the $60,000 U.S. average, and Chinese engineers earn even less.

On another thread it's $120,000

Outsourcing dramatically reduces labor costs, allowing companies to sell goods ranging from software to tax-preparation services at lower costs or higher profit margins.

Wait, I thought the savings were being passed on to the consumer.

Greater profits theoretically allow companies to buy new equipment, build laboratories and conduct scientific experiments -- even in expensive Silicon Valley and other U.S. tech hubs.

That's the theory, let's see some numbers.

Savings from outsourcing allowed companies to create 90,000 new jobs in 2003, with more than one in 10 of them in Silicon Valley or elsewhere in California, researchers said.

What kinds of jobs are those?

Companies spent $10 billion last year to outsource jobs ranging from medical transcription to nanotechnology research.

This time the jobs of the future won't even start out here.

Such legislation would be "protectionist" and "unwise," according to the ITAA, whose 500 members include Microsoft Corp., Hewlett-Packard Corp. and Amazon.com.

No comment necessary on this one.

[sixmil]

It raises the standard of living of the rest of us here by lowering costs for almost everything,

The article fails to mention that the savings are being passed on to the consumer, which of course is BS anyway.

and it raises the standard of living of many people abroad who might otherwise think of joining organizations like Al Qaeda.

Yeah, poor guys like Bin Laden.

[Joe Hadenuf]

Outsourcing white-collar jobs to low-wage countries such as India and China has thrown some Americans out of work, but a new report predicts that the trend will ultimately lower inflation, create jobs and boost productivity in the United States.

And a develping study to be released tomorrow, will indicate that the millions of unskilled, uneducated illegal immigrants pouring in, is a big plus to the economy.

[rogueleader]

No, it only reduces the standard of living of those who choose to compete directly with the offshore workers.

In case you haven't been paying attention, that's everybody.

Doctors, lawyers, tax preparers, call center workers, printers, manufacturers, farmers, textile workers, computer programmers, government workers (!), accountants, bookkeepers, technical writers, editors, copy writers, engineers, architects, and so on.

If you want to choose not to compete directly with people who run around in their underwear while making $3 a year, you get to choose one of the following career paths: politician, judge, CEO, banker, military, nurse's aid, janitor, gruel cook, slop wiper upper, or prison guard.

But then of course, pretty soon all those will be outsourced too, or taken by the hordes and hordes of desperate immigrants who will work minimum wage for PhD caliber jobs.

Quite frankly sir, I don't give a rip about your BMW SUV lifestyle. You people are killing America and the American middle class. I frankly don't know which is worse: getting attacked by terrorists or selling our country off bit by bit, impoverishing us all. I mean, what the hell are we supposed to be fighting for?

And yes, cheese boy, I have an economics education, I have my bachelor's degree in econ, and I am not impressed by this elitist claptrap they keep sending us.

Something better change soon or there will be hell to pay for GWB on November 2nd. Unless he figures out that this is a a BIG PROBLEM, Bush can forget about 4 more years, even if John F Kerry makes campaign stops with Jacques Chirac and promises to make kissy kissy with Osama. No one cares about hat crap if they are eating prok and beans when last year it was alfalfa with abalone dip. Sorry. I flipped out. If my rant doesn't apply to you, then let's just say it applies to someone else.

[hedgetrimmer]

Eighty percent of the U.S. labor force is classed as non-supervisory employees.

It is their standard of living that is in jeopardy by free trade.

Free trade between countries with unequal wage levels is a defacto commitment to a low wage policy-- a wealth giveaway to the low wage trading partners-- and a lowering of the standard of living from the high wage countries so that "harmonization" of economies can occur.

Free trade encourages standards lowering as well, because high standards companies/countries cannot compete financially with low or no standards companies/countries.

Raising the standard of living for many people abroad by wealth giveawy programs like "free trade" is socialism.

[RussianConservative]

will ultimately lower inflation

They right, eventually if salary continue fall, it can cause deflation which is much worse too then inflation.

[Fledermaus]

They right, eventually if salary continue fall, it can cause deflation which is much worse too then inflation.

HUH? That's the stupidest sentence I've read in a long time. You need to take some basic economic courses.

[RussianConservative]

So if outsource manufacture, IT, clerks, economists, x-ray reading doctors, phone operators, support staff, film & graphic editors, accountants, what is left? Light labor & burger manufacturers (Mexican do that)...sales? Everyone sell to everyone but no one produce....hmmm good economy...oh here is two thing that your type always forget: one, when IT not earn monies, they not spend monies, that means fewer resturants in need, less clothing bought, houses, cars...so those peoples cut work force too...who in turn buy fewer things and thus more work force to cut...also is Social Cost of cheaper crap...you know: unemployment, welfare, drug rehab (when unemployed turn to such), police (when they turn to crime), lower tax base, etc.

[RussianConservative]

If income fall, that mean less purchasing power to average family, that mean less goods bought, that mean more stock, less sell so pressure to lower price, WHICH SMART GUY IS DEFLATION..as price falls, profits falls, peoples laid off, to few dollar chase to many goods...as peoples laid off, less bought and so on...

So go find perch to hang from.

[Fledermaus]

Hey lightweight...I have a masters in Economics and taught it in college for three years. I give you a D at best.

Nice try young man. Now go hit those books. The concept of real deflation was wiped out in the mid-1980's.

You don't understand the concept fully, but needless to say, your definition is simplisitic and inaccurate. Deflation also means the deflating of asset value which has not occured and will not. Stocks, real estate and market securities are NOT deflating.

You should really try becoming more informed before you post on a large forum like this were REAL economist might be posting also.

What you are describing is simple supply and demand. Less demand and more supply lower prices. That's not deflation. Under you pitiful definition, the lost purchasing power of the 1970's through wage and price controls should have created deflation. Instead it created MASSIVE inflation along with HIGH unemployment along with HIGH interest rates. Now, according to you, that high unemployment rate SHOULD have resulted in lower prices.

Then why did prices go up? Huh? Huh?? HUH?

The education you kids today are getting is criminal.

[rbmillerjr]

Red is green

and bad is good

move along, everything is A - OK

[FITZ]

and it raises the standard of living of many people abroad who might otherwise think of joining organizations like Al Qaeda.

Is the Chinese peasant anymore than a Chinese peasant still? The Communist Chinese government would have seen it's economy collapse by now --- just like the Soviet Union's collapsed, but free trade is keeping them in business.

[dennisw]

But if China ever has an economic collapse they can all hunker down back at the farm since 80% (my guess) of Chinese are agriculturally based. The big city Chinese have relatives who live in the boonies.


IOW they would fare better than us in an economic depression.