White-Collar Exodus

ABC News ^ | July 29, 2003 | Betsy Stark

[Lazamataz]

They actually do pay payroll taxes, but I get your gist, there should only protection for the guilded IT worker, even though technology and globalization is effecting everybody for good(savings for the companies) and bad(some IT workers losing there jobs).

Another question: Do you have the mistaken impression that outsourcing only effects IT workers?

[andy58-in-nh]

This could very well be the issue with which the Democrats will retake the White House, if not next year, then in 2008. It is a real and growing problem, and, as yet, the Republicans do not even have it on their radar screens.

The offshore outsourcing trend has affected not only the high-tech (IT) sector, but is expanding in the financial services and telecommunications areas as well. American companies are hiring foreign workers at a fraction of American wage and benefit rates because it makes perfect, rational economic sense for them to do so in a globally competitive economy. What does NOT make sense, and what will (IMHO) ultimately result in a US financial crisis is that an increasing share of workers are paying no US taxes nor are they subsidizing the ever-expanding entitlement programs that Congress has mandated (SSI, Medicare, etc.) In turn, these same workers are not reinvesting their earnings in American goods and services, which means that future growth and job creation are being stunted. Meanwhile, our convoluted and literally insane tax code combined with bloated Federal spending is choking off opportunities for new American companies to produce new American jobs.

Even though the Democrats' likely prescription for all of this (more government/higher taxes) would surely be worse than the disease, many people will be receptive to politicians who seem to recognize problems rather than to those who seem to ignore them. Right now, the Republicans are ignoring them.

[RockyMtnMan]

I'm just pointing out the economic difference between the two scenerios. The checker has the opportunity to go to college and develop more significant skills. Although with the offshoring trend I'm not sure what I would tell the checker to major in.

[Dane]

Now, I have a question for you, my high-school chum: If almost all the jobs related to manufacturing are nearly wiped-out as a profession in America; and if we are offshoring (and thusly not doing) accounting, engineering, software, call-center work, reading and interpreting medical data, financial planning, and soon enough medical doctor and lawyering work; and if immigrants are doing transportation, agriculture, and the remaining other low-tech work; and if robotics will be completely eliminating 90% of retail sales jobs with RFID technology and self-checkout lanes.....

.....what will we be doing?

The most successful will be managing those businesses and be trying to find new and better things from the opprotunities that spring up and not lamenting their so-called salad days of going into work 9-5 at a desk job. Look I lived through this type of thing before when I was teen in the Pittsburgh area in the late 70's and early 80's when the steel mills shut down. The whiniest mill workers were all lamenting how the "Japs" had taken away their good paying jobs and how that they couldn't pilfer tools from the mill and make 30g pushing a broom, others moved on and prospered.

The area survived, because people found new opportunities, even with the incessant moaning of those who wistfully wished for a time that has passed.

This has happened all through recent human history. Maybe you should do a google search of the British Luddite movement.

[LibertyAndJusticeForAll]

There is a difference between offshoring jobs to another country and simple modernization.
Consider, there will be an American field service technician (because machines break), an American manufacturing plant with American engineers and computer s/w engineers who all have jobs to create the modernization.
The unemployed former American cashiers can very easily be retrained for a better career.
But, how does a nation retrain millions of offshored degreed engineers with (in some cases) decades of experience? The most experienced are being replaced first, (Sun Microsystems has a class action lawsuit right now for age discrimination - they fired all the really experienced engineers and replaced them with young Indians).
In offshoring, America loses all around. In modernization, America gains all around. There is no comparison.

[sinkspur]

B) Continue at the same pace and risk government intervention.

There'll be no government intervention, except to limit the H1-Bs coming into the US.

It is possible, you know, for a business to completely offshore a particular function, thus taking it completely out of the country.

Competitiveness is the issue here: find lower-priced labor and costs and survive, or leave the function here and risk losing the entire business.

[MrNatural]

I remember the discussion you and Nick had the other day about the effect of corporations being able to shift work around the world and deploy automation, forcing the return on labor
(wages, salaries) to a minimum. Nick's idea was that if the trend continues, the return on capital will increase correspondingly and even the US ultimately becomes a country with
a small super-rich elite and a huge underclass just hanging on.

The danger of a socialist populist political movement to 'correct the social injustice' under those circumstances seems real enough, but how far in that direction can things go;
how can increasingly poor people be customers for the factory-owners products? Isn't it in the capitalists interest to have customers able to buy what's being produced?

Or are we tipping over into a 'tragedy of the commons' scenario with no one able to stop the destruction?

Is what's happening in the world economically the same thing happening in much of Africa physically: the exploitation of the weak by the strong?

[RockyMtnMan]

I sent an email to the GOP about a week ago and they said they were adding it to the Chairman's daily report. That may have been complete BS but I have to believe it's on their radar. I also suspect businesses are putting pressure on the Republicans to do nothing by providing sizable campaign contributions.

I have to think Bush has been simply avoiding the issue until he's forced to take a position. If he sides with labor then his campaign contribution pipeline will suffer. If he sides with business then he risks his voting base. So the GOP response should be very interesting both in timing and message.

[SamAdams76]

No, I don't think self-serve checkouts should be abolished. Self-service gas stations replaced gas attendants. I don't want to go back to some stranger messing with my car everytime I need gas. ATMs replaced bank tellers. I don't want to go back to standing in line at the bank just so I can cash a check or take out some money (remember those days?). The Internet is putting a lot of people out of work such as travel agents, but I don't want to sit in some hard plastic chair for a half-hour anymore booking my next cruise.

I prefer using the supermarket self-checkouts because I get through much faster than if a gum-snapping teenager rang up my purchases. Also, they always seem to get stuck for one reason or another. Either the machine runs out of tape or they need to get a price-check. Odd that I've never had this issue with the self-checkouts.

Speaking of supermarkets, my pet peeve is the baggers. Now I used to bag groceries at a supermarket when I was a teenager and I remember working quickly and efficiently and I was always done at just the time the cashier was ringing up the purchase. Now they are so freaking slow! Nine times out of 10, the cashier has to help with the bagging after ringing up the purchases because the witless bagger got backed up. When I bag my groceries at the self-checkout, I probably get it down in 1/3 the time. I am also not afraid to fill the bags to the top. So my groceries fit in five or six paper bags intead of a dozen and a half plastic bags - another pet peeve of mine. Plastic grocery bags suck! And it really annoys me when the bagger bleats "Paper or plastic" and gets visibly annoyed when I say paper.

[AlbionGirl]

"The train has left the station, the cows have left the barn, the toothpaste is out of the tube,"..

Somebody help this WC geinus develop a less annoying analogous summary statement. What a pencil-necked, geeky thing to say! The Fred Blassie award goes to this loser, for sure.

[Lazamataz]

The most successful will be managing those businesses and be trying to find new and better things from the opprotunities that spring up

Okay, you've accounted for about 2% of the workforce.

What about the other 98%?

You seem to think America can be a nation of CEO's.

Look I lived through this type of thing before when I was teen in the Pittsburgh area in the late 70's and early 80's when the steel mills shut down.

Leaving aside for a second that I simply do not believe you were alive in the 1970's and early 1980's, this differs greatly from the loss of blue collar jobs then. See, at that time we were told that we'd be able to get white collar jobs, even the lesser-skilled people.

Now there is nothing to fall back upon, except maybe pink collar jobs, since we will not be able to afford shirts.

[RockyMtnMan]

Or impose a tariff on the difference in wage value and lower taxes for that wage band. Net effect is zero for the corporation and lower taxes for the affected wage band, further reducing the cost of an American worker. That's a win win for both the wage earner and the corporation.

The foreign government or corporation will not like the tariff but if they think the effort is worth it they'll pay up. Let them put their money where their mouth is, if they want to compete skill for skill then bring it on.

[Dane]

I just love the self-service checkout.

So do I. Zip right in and out. I don't think that I have had to wait in line once to use the self-serve check out line.

[RWG]

This is about middle America's pocket book now and the threat of losing a job to offshoring...when that sucking sound was made by blue collar types every body said we need to become competitive and that the end result would make America stronger. White collar types should stop whinning and appreciate how this process is making America competitive in the world economy.

[harpseal]

Ping. As has been pointed out by others nothing new here just a major news outlet picking up the Story.

As allways anyone who wants on or off this ping list let me know.

[garbanzo]

.....what will we be doing?

Something else.

[RockyMtnMan]

The white-collar types are the ones that start small businesses and employ blue-collar types. The blue-collar folks were told to improve their skills and move into the white-collar class long ago. Now those former blue-collar types are finding themselves in the same situation with their new white-collar brethren.

It it is in the common interest of both white and blue collar America to address this problem.

[harpseal]

Now the supermarket has effectively outsourced three cashier positions to the machines.

As pointed out on another thread the supermarket has not outsourced they have invested in productivity here in the USA. The key is to make the investment in american workers productivity more likely. Tariffs are one of the means of achieving that goal. Tariffs are Constitutional and should be so used. This was also pointed out on another thread which you did not answer.

[Dane]

You seem to think America can be a nation of CEO's

Nope but it can be a nation of small businessmen and women. People who see opportunities and are willing to work to prosper for themselves.

OH BTW, small businesses employ the majority of people in the US.

Leaving aside for a second that I simply do not believe you were alive in the 1970's and early 1980's, this differs greatly from the loss of blue collar jobs then. See, at that time we were told that we'd be able to get white collar jobs, even the lesser-skilled people.

Looking at your first sentence of the above italicized passage, I would reccommend that you don't enter stand up comedy. Second, it is the same mentality of the steel workers who got caught up in the explosive change that went through the US manufacturing sector in the late 70's and early 80's.

Some whined incessantly, the vast majority moved on and prospered in other areas.

[1066AD]

If the job is sent offshore that's one thing... but if a replacement is hired within the US, being paid Indian rates, then that is flagrant abuse of the L-1 visa program; I believe this was the case with Siemens.