Newsweek column on outsourcing

Aug. 7, 2003 / 5:32 PM ET Readers on outsourcing: I’ve been corresponding with readers this week about two Newsweek pieces, one on the “jobless recovery” phenomenon and the other on offshore outsourcing. It’s a major hot-button topic, particularly among IT workers, but the mail for the most part has been quite reasoned, if somewhat sorrowful and resigned. A few readers asked some pointed questions:

Name: Marc Hansen Hometown: Seattle When all the Microsoft, Oracle, and IBM software production has been outsourced offshore, and when all Intel factories are completely automated, and when all Home Depot stores have self-check-out lines. ... my question is: Who, in America, will be able to afford the food that the McDonald’s robots cook?

Name: EV Hometown: Annapolis, Md. Where do all of these upper level managers think they will be when everyone has been outsourced? Guess they better learn Hindi or one of the other 18 dialects. You are only a manager if there is someone left to manage.

Name: Daniel E. Platt Hometown: Putnam Valley, N.Y. Sixteenth century Spain was quite rich on gold from America. While they funded the industrial revolution in the rest of Europe, they were largely left behind in the end. Are we doomed to the same fate? Or should we purchase a future at the cost of lower profit margins now?

Rogers replies: All good questions. Here are some personal tales from the trenches:

Name: Toni Klinger Hometown: Massillon, Ohio I am so angry. My husband is 59 and lost his job to Canada four months ago. Yesterday, my sister-in-law was notified that her skip-tracing job was going to India. Hey, no problem, she’s only been with the company for 21 years! I have never been so frustrated in my life. People in their 50s just can’t start over. I hate life!

Name: G. Popsworth Hometown: Dallas, Texas I am struggling with what to suggest to my children for a course of study at college. It is becoming more and more difficult for college grads to find employment. Now with outsourcing rampant, they need something stable for their career opportunities. A small town dentist, doctor or lawyer might be appropriate.

Name: Thela Jinseet Hometown: Clinton, N.J. Here’s my story: I am a journalist for an online publication, and I’m bracing for impact. My employer’s entire technical staff is from India, making up nearly 50% of the employees here. The owners of the company are also Indian and they outsource to a team in India. Our Indian employees are a real bargain because they work ungodly hours: 10- to 12-hour days every day and on the weekends. They are also extremely bright. And it’s for low pay. But there’s more. My husband lost his electrical engineering job four days after 9-11 from a major Japanese company that closed its plant and moved its operations to France. Despite graduating with honors from a top university, it took more than a year for him to find work. And just in time: We had two weeks of unemployment benefits left, which was barely enough to pay for our mortgage. This time, he saw a substantial cut in pay. I am truly frightened after our experience. I am scared to buy another house. (We had to sell ours for his new job.) I am scared to have a baby. We can’t afford to save for retirement. Pensions are a thing of the past. My company doesn’t even have a 401(k) plan or even direct deposit for paychecks. I fear we will be poverty-stricken when we retire at 75. Why isn’t Congress listening?

Name: Bill Hometown: Roswell, Ga. Outsourcing customer service jobs overseas is a double-edged sword. One side slashes the number of jobs that are available to U.S. employees and the other side slashes the income taxes that the federal government can collect. Uncle Sam ends up funding unemployment benefits for U.S. citizens who are denied jobs that have been sent overseas. One solution may be to penalize these outsourcing companies in the form of a negative subsidy so that they can help pay benefits for the unemployed.

Name: Mike K. Hometown: Aurora, Ill. Outsourcing makes for some really profitable companies, but fewer consumers have the money to buy that company’s products. That profit won’t last for long. Remember the big “Buy American” kick back in the 80s? I think we’re on the way to the “Hire American” craze. Find out who outsources and who doesn’t and support those who support America by hiring Americans.

I don't have class envy and I don't believe corporations are inherently evil. I have voted a straight Republican ticket since Nixon. As a Christian Conservative the pro-life and family values of the Republican Party keep me loyal. It doesn't mean I'm altogether happy with my party either.
You sound pretty angry. I get angry about this issue when I think of how much has been sacrificed by Americans and how much is being lost by what I consider short-sighted business practices and economic policies.
I think the Savings and Loan bailout is an example of domestic corporate welfare.
No doubt there are frivilous lawsuits brought against businesses. But, sometimes it is one business against another, like the SCO/Linux mess.
Sure we're stable now. We do not have civil unrest with Muslim and Hindu factions ready to attack each other. Our inner-cities could use some help, and our Mexican border needs protecting, but we are still a superpower and a secure nation. It is the future I'm concerned about.
A lot of our strength comes from our large and vital middle-class. It is shrinking under the current economic policies. That is not good and does not bode well for America's future.

see post # 348 dfor a staring of name calling. Then see him defend OPIC as the leaast the government can give corporations a subsidfy giving something of value to encourage investment overseas. Please tell me who is talking subsidies.

Hey Poohbah subsidies are Socialist at least and may well be Marxist. Even LS doesn't like Subsidies and neitehr do I.

I am presuming for your discussion of railrod subsidies and how counter productive they are you do not support any government interfereing in the Free market with subsidies. Most especially I presume you do not support interfering with the normal allocation of Capital investment with subsidies.

Both of you love America dearly. I beleive the issue of whether or not a tariff is inherently harmful to a nation is a very important question on any thread discussing Free Trade. I proposed the historical record as a means to answer this central question. clearly if a tariff were harmful to the antion imposing it I would be wrong for advocating such a position and I would clearly apologize to all for such advocacy. If, however, the historical record proves otherwise, then I would presume the same courtesy from him.

LS since you are mentioned in this thread i thought you should be included in the flag to it as a common courtesy

see post # 348 dfor a staring of name calling.

My saying that maui_hawaii's economic analysis--one that assumes decreased supply and increased demand, but concludes that prices would not increase--is "laughably Marxist" is name-calling, but your referring to those who disagree with your stance on tariffs as "Free Traitors" isn't.

Thanks for the laugh.

I don't have class envy

As you complain about "multi-million dollar bonuses."

(Snicker.)

A lot of our strength comes from our large and vital middle-class. It is shrinking under the current economic policies.

Another liberal Democrat talking point that ignores the fact that MOST of the disappearance of the middle class is associated with movement UPWARD out of the middle class, not downward.

That is not good and does not bode well for America's future.

Yeah, God forbid that more people become rich.

Even in the presence of subsidies by other countries, free trade is still beneficial (what the foreign countries are really doing is subsidising American consumers at their own taxpayers' expense).

here is the major point of disagreement I have asked LS to provide some evidence of this assertion from the Historical record. I make the same challege to you. The Historical record from 1789 untilk 1995 was the historical record of protective tariffs in teh USA. The net result was the USA went from a relatively unimportant coast hugging agricultural nation to a continent spanning super power. I will citre the Fordney - mcCimber Tariff of a tariff increase taht diectly preceded a boom. I will submit revues raised from tariffs cwhich replace the income tax are morelikely to resultin a boom than the same amount of revenue raised solely from the income tax

Can you cite evidence of tariffs harming the USA. be careful Smoot Hawley is notr everything you think it is.

and your support of the People's Republic od Chins leveying tariffs on American goods with nor eciprocal American tariffs isn't Marxist. by the way the OPIC budget is approved as part of foreign aid. Even its supporters admit it is an aid program and was established as such.

Now I challeneged LS to come up with some evidence of tariffs actually harming the US as opposed to tariffs directly helping the USA. This is actually looking at facts care to take up the challenge? Thanks for the laugh.

A while back another poster was shocked that someone would call a "Free trader" a Marxist. Ipointed out that sometimes the response was called for by some "Free trade advocate being the first to use that term. thank you for proving my point.

I especially thank you for proving my point about being teh first to use teh Marxist label in the same thread where you defend government subsidies to offshore investment. That is taking American tax dollars to give it to companies to employ foreign workers to compete against US citizens.

...as evidenced by the fact that many companies selling foreign-made products are doing just fine (look at Wal-Mart).

To me, this just means that Wal-Mart might become a big, juicy target for picketing by the unemployed. I could be wrong.

and your support of the People's Republic od Chins leveying tariffs on American goods with nor eciprocal American tariffs isn't Marxist.

Yup. If China wants to blow their foot off, I see no reason to emulate them.

Now I challeneged LS to come up with some evidence of tariffs actually harming the US as opposed to tariffs directly helping the USA.

Smoot-Hawley triggered retaliatory tariffs around the world, leading to 4% of the GNP just evaporating at a time when we couldn't afford to lose any more. It also did wonders for getting nutballs put in charge of Germany and Japan.

Now, in the long run, by triggering World War II, it made the prosperous 1950s & 1960s possible--it's amazing how much the market price for American industrial goods increases when the rest of the world's industrial plant has been turned into rubble.

That is taking American tax dollars to give it to companies to employ foreign workers to compete against US citizens.

Right after those US citizens voted for all manner of higher taxes on businesses, family leave benefits (at the company's expense), worker's compensation packages that are increasingly unrealistic, insane product liability lawsuits...

And the companies are supposed to say, "Thank you sir, may I have another!" in harpseal's world.

Hey, do away with OPIC. But don't expect any changes in the outsourcing picture.

Smoot Hawley did no such thing the great deoression was well iunderway at the time and the effects f the Federal reserves tightening of credit more tah acoiunt for account for the evaporation of the GDP and while we are at it do not forget the income tax policy. Smoot-Hawley was passed in June 1930 the Depression was started on Black Tuesday in October 1929. If Smoot Hawley was harmful then teh Fordney McCumber should have been just as harmful. It however was combined with a cut of the income taxes and led to the boom years of the "Roaring Twenties" Now would you care to prove your assertion that Smoot Hawley caused that 4% drop in GNP. I would be very interested to see how you break out Smoot Hawley from the Federal Reserve's credit contraction which was continuing at this toime. I would also like to see how you isolate it effects from the cancelation of a proposed income tax cuts.

You earlier in this thread were defending OPIC as a god program. Now care to atke up the challenge and provide clear and convincing factuial evidence that protective tariffs have harmed the economy of the USA. Preferably a case where a protective tariff has harmed the USA when the overall effect of that protective tariff was the revenue raised offset other taxes. Because I am not arguing for higher overall taxes merely a shift of teh revenue sourceing to tariffs instead of income taxes. As I ahve repeatedly said my choice would be from Corporate income taxes.

Because American students don't want to actually learn anything, they just want a nice high grade to help their self-esteem.

Actually you are describing American educators, particularly K-12. You must be a beneficiary of government growth, how do we taxpayers benefit by paying you?

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