Posted on 06/13/2004 5:46:49 PM PDT by lasereye
Edited on 07/12/2004 3:42:20 PM PDT by Jim Robinson. [history]
The noisy agitation over offshore "outsourcing" died down a bit. But assertions repeated with such stridency often remain believed long after they are proven false.
The original story focused on a supposedly permanent loss of high-paid jobs among computer specialists. These jobs were said to have been lost to India, rather than to cyclical business failures.
(Excerpt) Read more at washingtontimes.com ...
The market for big jets isn't as big as it once was. Boeing is going to have lower volume anyway. Smaller players, using older jets or smaller aircraft in general will limit Boeing's growth for a while. Of course if you shut down international trade, their market will be even smaller.
The fault of outsourcing completely rests on the factors that make creating/maintaining jobs in this country too costly: taxes & regulations at all levels, unions, etc. More rules and regulations aimed at limiting companies flexibility to operate as they see fit to the benefit of their shareholders will only make it worse.
If it weren't so hard to employ Americans, jobs wouldn't be outsourced. That said, the point of this article is that it isn't as bad as its been hyped to be for a variety of reasons.
Any engineer will tell you that engineering is cyclical. Of course eveyone here likes to use this a stick to beat nerds with, but it is a two-way street. If you want engineers to stop complaining at the bottom end of the cycle, then it is only fair for corporations to STFU during the high end of the cycle instead of crying that they need to import more workers.
America's problem isn't free trade. America's problem is a deep cultural hatred for educational achievement. Chinese and Japanese students are learning about calculus and quantum mechanics. American students are learning about beer and NASCAR.
Please read this article carefully:
>>>"... (BLS) released projections..."
Note the word PROJECTIONS.
These are the government's projections that nothing is wrong.
The ACTUAL job counts of IT people continue to fall as I read this last week.
Those in the telecomm industry that I know had to train their offshore Indian replacements and none has found an equivalent or even 1/2 way stable job.
Hoppy
While your point about American students is well taken, we have a considerable problem with free trade. China and India, among other fast-growing economies, have trade restrictions that favor domestic growth. We, however, open our markets to everyone - to our considerable detriment.
Law and government jobs - way to go!
No, you got it wrong. It is YOU who believe what your hear on the news or what you read in some studies. They believe what they see with their eyes.
Another trend is the number of US Computer Science grads is about half what it was in 1985 (when I graduated). Large scale software development is an extremely complex activity that requires very close coordination with the customer--I have always had doubts about how easily it could be offshored.
BTW--does anyone care to guess what percentage of engineers actually do REAL engineering? My own guess is under 50%.
You're right. The protectionists would go crazy. On the other hand, the kids might learn something.
*PING*!!!
Yeah, whatever.
We'd need another Hoover and another FDR to have another Great Depression. That being said, we are due for a debt retrenchment. SSI, etc. taking over 15% of everyone's (well, everyone making under 88K a year) salary is having a deleterious effect on the American savings rate, but not stopping them from taking on a lot of debt (incentivized by a Federal Reserve practically giving away money).
And the other 99% of Americans enjoy the benefits. THe U.S. economy is not static, it is dynamic, and workers must be freed up for new enterprises or we WILL become stagnant.
Walter Williams addressed the changes in the telecomm industry a while back:
"In 1970, the telecommunications industry employed 421,000 switchboard operators. In the same year, Americans made 9.8 billion long distance calls. Today, the telecommunications industry employs only 78,000 operators. That's a tremendous 80 percent job loss.
What should Congress have done to save those jobs? Congress could have taken a page from India's history. In 1924, Mahatma Gandhi attacked machinery, saying it "helps a few to ride on the backs of millions" and warned, "The machine should not make atrophies the limbs of man." With that kind of support, Indian textile workers were able to politically block the introduction of labor-saving textile machines. As a result, in 1970 India's textile industry had the level of productivity of ours in the 1920s.
Michael Cox, chief economist at the Federal Reserve Bank of Dallas, and author Richard Alms tell the rest of the telecommunications story in their Nov. 17 New York Times article, "The Great Job Machine." Spectacular technological advances made it possible for the telecommunications industry to cut its manpower needs down to 78,000 to handle not the annual 9.8 billion long distance calls in 1970, but today's over 98 billion calls.
One forgotten beneficiary in today's job loss demagoguery is the consumer. Long distance calls are a tiny fraction of their cost in 1970. Just since 1984, long distance costs have fallen by 60 percent. Using 1970s technology, to make today's 98 billion calls would require 4.2 million operators. That's 3 percent of our labor force. Moreover, a long distance call would cost 40 times more than it does today.
Finding cheaper ways to produce goods and services frees up labor to produce other things. If productivity gains aren't made, where in the world would we find workers to produce all those goods that weren't even around in the 1970s?
It's my guess that the average anti-free-trade person wouldn't protest, much less argue that Congress should have done something about the job loss in the telecommunications industry. He'd reveal himself an idiot. But there's no significant economic difference between an industry using technology to reduce production costs and using cheaper labor to do the same. In either case, there's no question that the worker who finds himself out of a job because of the use of technology or cheaper labor might encounter hardships. The political difference is that it's easier to organize resentment against India and China than against technology."
They're no threat to the US now, maybe after 2/3 decades.
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