Posted on 09/08/2004 3:36:00 PM PDT by Destro
Posted on Sun, Aug. 22, 2004
Business books: 'Exporting America: Why Corporate Greed Is Shipping American Jobs Overseas'
"Exporting America: Why Corporate Greed Is Shipping American Jobs Overseas," by Lou Dobbs (Warner Business Books, 208 pages, $19.95)
Look out, Silicon Valley! Bangalore, India, is gaining on you. Some folks in India even believe that their country's version of Silicon Valley has already surpassed its California counterpart as a center for high-tech employment.
In his new book, "Exporting America," CNN's Lou Dobbs shows how strongly that belief is held in India with a headline from the Jan. 6, 2004, issue of The Times of India: "Silicon Valley Falls to Bangalore."
The story under that headline, Dobbs writes, bragged that Bangalore has 150,000 information-technology engineers compared with 130,000 in Silicon Valley. Dobbs believes that that story can't be written off as merely nationalistic exaggeration.
"India is only one of the many countries benefiting from the exporting of American jobs. But it has also been one of the most aggressive in pursuing professional-level jobs, from medical technicians to software programs. American companies have been all too happy to answer India's siren call of educated English-speakers willing to work at some of the world's lowest wages," Dobbs writes.
General Electric's Capital International Services, Dobbs points out, was one of the pioneers of outsourcing domestic operations to India. The company, Dobbs writes, employs 1,300 at its four centers in India and says it saves about $400million annually by not having Americans do those jobs.
"The people there write software; they review invoices and insurance claims; they do market analysis. CIS also offers its services to other American companies looking for outsourced resources," Dobbs writes.
Although India lags behind other Asian countries in manufacturing, it has a leg up, according to Dobbs, in the service sector and is a magnet for some of America's highest-paying jobs.
"There are programmers all over the world, but the Indian Institutes of Technology (known as IITs) are turning out thousands of these programmers a year. They are men and women who are well-educated, speak impeccable English, and are thrilled to make $10,000 a year," Dobbs writes.
GE, as Dobbs makes clear in abundant detail, is only one of many companies outsourcing high-tech and professional jobs to India and other parts of the world where wage expectations are lower. Among the others spotlighted by Dobbs for outsourcing jobs to India, the Philippines, Romania, Ireland, Poland and other countries are IBM, SAS Institute, Intel, Microsoft, Perot Systems, Apple, Computer Associates, Dell, Hewlett-Packard, Oracle and Sun Microsystems.
Early in the book Dobbs delivers a broadside against the general trend of shipping jobs offshore. He says it is undermining the American middle class, putting Americans out of work, forcing Americans to work harder and longer for less pay, devastating some communities and depriving governments at all levels of the tax revenue for upgrading public education and providing other essential goods and services.
Dobbs, whose views on shipping jobs offshore have been under continual attack by advocacy groups and consultants for multinational corporations, takes the view that corporations who send jobs offshore are firing their own customers, because American workers will eventually find themselves unable to purchase the goods and services being exported back to America by American companies.
"India can provide our software; China can provide our toys; Sri Lanka can make our clothes; Japan make our cars. But at some point we have to ask, what will we export? At what will Americans work? And for what kind of wages? No one I've asked in government, business or academia has been able to answer those questions," Dobbs writes.
- Cecil Johnson,
Knight Ridder Tribune
regret? not the current group, the Carly Fiorina types. They have their 9 figure bootys tucked away, they will be fine, living outside the US and renouncing their citzenship.
Unlike India and especially China, the US is a republic where its citizens vote. Get enough economically displaced Americans, and your small business will be quite heavily taxed in a few years to pay for all t he new programs the Hillary(or worse) admin will put in place.
Outsource CEO's.
Think how much companies will save by not paying their fat American a$$e$.
Why, I'll bet for everyone of those CEO's making a hundred million a year, there's probably a dozen equally smart Indians who'd stand in line to do that job for 50K a year.
I worked as a contractor for Lockheed-Martin in nj once, and alot of the software developers/analysts there were in a union of some sort (related to comm workers? I forget) - but they were all given the choice of joining or not. First time I'd seen it, but it does exist.
right now, I think we may be in recession by late 2005. job growth is not strong, I see a slowdown at work, more layoffs at large coprorations, more grinding down of health benefits and elimination of retiree medical - add $40 oil to that, and Greenspan wanting to take the fed funds rate to 4% - we could be in recession (or damn near close to 0% GDP) later in 2005.
As a former software engineer (stay-at-home-mom now), he's right.
Great engineers are being outsourced to lower paying engineers. It's the engineers that are older, well-educated, and have high saleries that are getting outsourced.
American small businesses find they can be more competitive by hiring Indians electronically. Some, like Willie Green, would advocate protectionism. OK, let's delve into that. Say we pass laws putting punitive taxes on corporations that offshore. Fine, those taxes get passed along to the shareholders and consumers as either lower dividends or higher prices.
Since all consumers SHOULD have a choice of what and when to buy we find that the higher prices offered by domestic corporations cease to become competitive when compared to the burgeoning manufacturers of the near and far east.
Taxes. Since the domestic corporations have a higher tax burden than those that export to the US we find that the higher prices offered by domestic corporations again cease to become competitive.
We pass more laws further restricting the globalization of our domestic businesses.
Pretty soon we are left to our own devices since most domestic corporations have left the US for foreign shores where capitalism is less restricted. Most of our GDP is service oriented and internal since we have isolated ourselves from the rest of the world.
We have a period of many years where wealth is not created in America because the large businesses have left and the small business can't compete with cheap black market imports and even if they do, they are taxed to the hilt and regulated to the nines.
We can isolate ourselves all we want but the rest of the world is not going to sit around and wait for America to get on its feet.
If we can't compete in the world as it is right now, today, here, then we might as well pack up our bag of goods and retire. There is no escaping it, there is no amount of protectionism that will "save" us, there is no amount of government action that can overcome the inevitable worldwide market of supply and demand.
Get over it. If you lost your job to outsourcing go back and read about the guy who lost his job making buggy whips. Take a lesson from him and get back in the game. Nobody owes you a job and unless you want totalitarian government nobody is going to give you one because "they care".
Just what is the half of the American work force that is of below average intelligence to do?
That's the way it worked, even before outsourcing. If you're working in a non-management position in a corporation in your 50's, you are fair game. There comes a point where it's just cheaper to hire two young kids than to keep the old guy (even with his "legacy" knowledge) who has been given perfunctary raises for 10 years.
It's not fair, it's not right, but that's the way it works.
we need sane trade policy, and we don't have it. we signed NAFTA in the hopes of using Mexico as a source for low skilled, lower wage manufacuring jobs right on our border, in part to stem immigraion into the US by providing a source of jobs in Mexico. so then what did we do? we signed free trade agreements with China, and all the manufacturing jobs are fleeing Mexico to China, and the Mexicans are coming over the border to take US service jobs, deepressing those wages. does that policy make any sense?
we should have tariffs on chinese manufactured products, period.
you attitude basically says "we give up" - let's race to the bottom.
Because there isn't much more that unions can offer their workers wrt workplace safety and child labor issues, their main concern today is collective bargaining. The important issues beyond collective bargaining have been resolved for decades. Sure, there is always room for improvement. But if the unions were only needed to work those issues, then there wouldn't be much need for their existence anymore. So all they have to offer their workers as the years pass is higher and higher wages. And it is for that reason that I believe the unions have priced themselves out of the global market.
I believe in liassez faire economics. You cannot unilaterally raise the wage scale, no. Whatever the global market dictates is what the wage rates should be imo.
Of course i'm not in favor of offshoring jobs but that is what the global market dictates at this time. That is what globalism and free trade dictate. Whether i'm in favor or against globalism and free trade or not is irrelevant. That is the situation we are in.
If you have a hard time understanding how this works, and if i believe that you are smarter than the average bear, then most of America doesn't understand this. It is easier for them to believe that "Bush is selling our jobs overseas". Basic economics like this is something most people can't grasp, unfortunately.
age discrimination lawsuits have done much to quell that.
So where do you think oil will trade by late 2005? I'm glad to know another prognosticator.
Well then, the only way America will be able to compete, is when it costs as little to live here as it does in India.
Real estate has a long way to fall before it's as cheap to buy a house here as in India.
Otherwise, no matter what that former buggy whip maker decides to next, he'll soon find that career sent overseas, too.
Big mistake for our civilization to have sold its knowledge and tools to the third world.
Nothing good will come of it in the long run.
Pehaps Dobbs should write less, and read more.
10 Truths About Trade--Hard facts about offshoring, imports, and jobs.
Many Indian engineers come from the India Institute of Technology. They do get advanced degrees at US universities. But if they work for 1/5 of what Americans make, it makes no economic sense whatever for Americans to go into debt to go to engineering / CS school.
Corporate "greed" in the real world is Corporate fiduciary responsibility to maximize ROI for its stockholders. I thought conservatives understood that simple concept.
Define sane. What is more sane than free trade? Isolationist policies like those I see advocated on this board are nuts. We can isolate ourselves into non-competitiveness. Do you seriously think that GM could survive without its exports? And if it could, how would we survive without all of the parts GM imports. The world has changed. Get with it.
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