Protectionist Backlash Against Outsourcing

The Associated Chambers of Commerce and Industry of India ^ | July 2003 | ASSOCHAM

[sinkspur]

This is the beginning of the end for the "working class" unless government intervenes.

How does government intervene? All of this work can be done via the internet.

[LibertyAndJusticeForAll]

Outsourcing ping!

[RockyMtnMan]

If they are just like us why don't they have a world-class economy? Shouldn't they have built one by now? Why should I have my wages decreased because of their lack entrepreneurship in their own country?

[sinkspur]

Governments role in the economy is to ensure a level playing field for all competitors. Laborers compete for work, therefore the playing field must be leveled to foster competition. Until they bridge the gap in wages there is no competition, therefore India holds the monopoly on labor.

Actually, the Phillipines and Malaysia are beginning to undercut India. India's costs are beginning to affect the hourly rates.

There's no way to level this playing field. The big boys, like IBM and Dell, and HP, have a global presence in these companies. Indian or Phillipine code developed within IBM can be used globally, within IBM. The feds don't have the manpower to check every line of code in every program.

[RockyMtnMan]

Do you think reputable companies would risk subverting a tariff to save a few bucks?

I am very confident our government will find a way to make tariff/tax collection work.

[eccl1212]

I will take a stab at it...

what you call outsourced is in reality an IMPORT. PAID for by the importer.. for sake of arguement... IBM USA is importing code from IBM-India... and any money they use from the USA corporation to transfer to their INDIA operation can be taxed as IMPORTED LABOR VALUE... They try to transfer 100 million in 'expenses' to india...its cool... but they have to pay the USA 100 million EXPORTED JOB/Imported work product tax or the money cannot go off shore to pay the indian subsidy employees or the rent on their offices and equipment.

Just a stab at how they would TRY to do it.
Necessity is the mother of invention, but I am not sure we can innovate our way out of EVERY nightmare job scenario.

Give an example of how as a nation WE could innovate our way out of this... perhaps we could subsidize our businesses heavily to keep jobs here, and thereby make our own services prohibitively inexpensive, by the same means the japanese do it with their "consei" manufacturing of autos... steel and other items.

I'm all for open competition, but it seemeth to me that something dirty is undermining the "levelplayingfield" that competition presumes.

What's your idea?

[sinkspur]

Why should I have my wages decreased because of their lack entrepreneurship in their own country?

Because you're not competitive. Get competitive. Offer something that the Indians can't offer.

[RockyMtnMan]

That's what whistle-blowers are for.

[RockyMtnMan]

I'm hyper-competitive so I have little to fear. It's the economy in general that I'm concerned about. This trend has the potential of pushing us into socialism by eviscerating the middle-class.

[sinkspur]

What's your idea?

The positions that will likely stay are project managers, who need to be close to the business people for whom the code is being developed.

Writing code in Java is like cutting someone's lawn. It's easy to do, as long as you know how to crank a lawnmower.

The landscape architect who designs the lawn, however, requires a bit more smarts.

[eccl1212]

The government seems to be willing to take on file sharing via the internet of music... that involves songs worth only a few nickels at best... why they would be unable or unwilling to go after internet commerce that violates the intent of our import/export laws?

(at least they will when they rewrite the export/import laws to fit the global/internet paradigm)

I think that trade wars are a legitimate role for government, as they DO affect all aspects of our national security... I take it you disagree?

[sinkspur]

That's what whistle-blowers are for.

That's funny. It wouldn't work, but it's funny, nonetheless.

[RockyMtnMan]

Writing code in Java is like cutting someone's lawn. It's easy to do, as long as you know how to crank a lawnmower.

Your ignorance is showing. PM jobs are moving closer to the work and the "business people" can do a telecon just as easily as meeting face-to-face.

How much do you know about programming? Are you in a marketing department?

[Dissident1]

Because you're not competitive. Get competitive.

OK, let's talk manufacturing in China. Should the US start eliminating things like EPA, OSHA, and Workman's Comp to get competitive? Some will say yes. Or how about forcing EPA, OSHA and Workman's Comp onto China so we can level the playing field.

[sinkspur]

I think that trade wars are a legitimate role for government, as they DO affect all aspects of our national security... I take it you disagree?

Nobody on this thread has uttered one word about the reason the costs of doing business are so high in America: regulations and taxes.

Instead, you'd rather tax already overtaxed and overregulated businesses because they're trying to remain competitive.

Line coders are gone, forever. You're just going to have to accept that fact. As are, likely, some financial industry jobs that require boring, repititive tasks.

The rule is this: if your job can be done from your home, it can be done from India, for a lot less.

[sinkspur]

I sell software, and I've been in IT sales for 25 years. I know about the programming environment, and it is changing, dramatically.

[sinkspur]

Or how about forcing EPA, OSHA and Workman's Comp onto China so we can level the playing field.

You're not going to force it on China. So, we eliminate some of the onerous regulations here, or remain uncompetitive.

[RockyMtnMan]

Nobody on this thread has uttered one word about the reason the costs of doing business are so high in America: regulations and taxes.

Give it time somebody will begin that train of thought.

Line coders are gone, forever. You're just going to have to accept that fact. As are, likely, some financial industry jobs that require boring, repititive tasks.

How does one become a good designer/archtitect/Sr. Engineer without first being a "coder"? Do you think all IT people start at the top?

[superloser]

This development work is not "sold"; it becomes part of the infrastructure of a company.

No, it doesn't, really.. Development work doesn't have to be "sold" -- labor, material, and "research and development" can be defined by a clever piece of legislation as components of a product or service - and require declaration thereof - and therefore be deemed subject to a tariff.

The Constitution grants the power to impose tariffs. The definition of what particular goods and services may be taxed is left to Congress.

Besides, R&D is not held as an asset on the balance sheet -- so it cannot be deemed "infrastructure." Take a look at automobiles which must declare point of assembly and "place of origin" of parts for an example.

If Congress can make that part of how autos are sold, there is nothing that says they cannot apply similar principles -- and tax them -- to any other product or service consumed within the borders of the United States which is of foreign origin or contains any foreign components whatsoever.

In terms of technology, Government can pass whatever law it wishes and regulate any commerce it likes of this sort via the commerce clause. Goods, services, labor, capital all may find themselves landing under that particular Constitutional clause.

IMHO, this would be a very, VERY bad thing, but it may just happen if enough people become perturbed about offshoring.

You need to know what you're talking about, first.

Unfortunately, I do. I will not underestimate the creativity of a Congresscritter and I also will not underestimate the ability of the Supreme Court to uphold such a law.

If I can figure out very quickly a simple method of making such a tax legitimate, do not, for one moment assume that 535 Congresscritters cannot do the same quick analysis and then act on it.

[RockyMtnMan]

Sales and Marketing are one in the same brainless job. Who do you think wrote the products that you've made a living on over the last 25 years? You stand more to lose than most by the offshoring trend.

Have you ever thought that maybe this trend will negatively affect the market thereby reducing your sales?