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.

Farmers operate on such a low margin of profit, if they suddenly had to change crops next year, how would they finance the new equipment etc? If they are orchardists and they can't grow peaches anymore what do they put in? Another orchard crop maybe olives, where your first crop isn't harvested for 7 years? How do they and their families make ends meet waiting for the new crop?

What is wrong is the flippant way people in this country view the livelhoods of others. And orchardist cannot summarily switch to row crops, they must learn how to grow that crop just like they learned to grow tree fruit.

Free trade is destroying every vital industry we have. Someone should wake up and smell the coffee.

By the way, the farmers who have to "switch crops" often end up selling their land for development or to some sleazy land trust which takes the land out of production forever and takes if off the tax rolls forever too. So you end up with a very far reaching effect for the economy. Again, its not just the farmer who goes out, he takes his suppliers with him, another part of the American culture dies, and tax revenues are diminished by the greedy land grabbing environmentalists.

Free trade truly means "race to the bottom". Free traders advocate hardship, depravation, loss of culture, loss of infrastructure loss of everything because human beings to them are only consumers and laborers, not citizens with Constitutionally protected rights.

Farmers operate on such a low margin of profit, if they suddenly had to change crops next year, how would they finance the new equipment etc? If they are orchardists and they can't grow peaches anymore what do they put in?
Dude, you know way, way more about this than I do. But I'm willing to learn.

I live in NJ. Last year I had to drive around the Ft. Dix/McGuire AFB area. Lots (LOTS!) of Jersey farmland. Beautiful to look at, crops growing and all. Anyway, so, FARMING GOOD, imho.

Let me summarize - you're saying crops are also hard to "re-configure". OK. I have no clue as to how farmers plan to plant crops. I've always considered them kind of a commodity - like, sold on the Chicago Merc. Do farmers (or, specifically, cling peach growers) take into consideration the effect of European (or S. America, or Asia) peach growing efforts when planning their crops? And the possiblity of dumping? Or is this dumping just so unexpected that it couldn't be planned for?

What to do? Do you propose a level playing field via tariffs or trade agreements? And for how long? What would help correct this problem?

Yow, too many questions - thanks for your reply. Also, I never realized the diff between orchard vs. row growers. I my have been dropped on my head.

Do farmers (or, specifically, cling peach growers) take into consideration the effect of European (or S. America, or Asia) peach growing efforts when planning their crops?

No one was prepared for the effect of NAFTA and GATT. Remember our honest elected officials(many of whom never read the treaties they signed) said the treaties would help the economy and create jobs. How can you prepare for disaster when the people who are supposed to be protecting your rights, are selling them to the cheapest foreign competitor.

We are told every day, gobalism is inevitable, it will make America great. Lies every one. The only inevibiltiy about globalism is that our government is forcing it on the American people without debate or discussion, and apparently without a look into America's future when it is no longer an economic or military powerhouse, but just a chump waiting for china to pull the plug on our economy. Remember, Bill Clintons rabid support for globalism? He chortles with glee at the thought the US will no longer be "the big dog on the block" and over and over again has told American citizens' to get used to it.

And even if the farmers could switch, why in God's name would our government want to put them out of a business they love and are good at and contributes to our nations security with a safe abundant food supply, with their policies?

Ok, I just realized that peaches grow on trees. (Like Atlanta, where every other street is named PeachTree). Ok, very tough to change from being an orchard (trees) to something else. Since this is the case, I'd also opt for more protections (tarrifs, etc.)(again, time-delimited) for this product.

Very true.

Between Enron and outsourcing and people losing their savings on tulip tech stocks the little guy is plenty mad at being screwed all the time.

Free trade is becoming a dirty expression. We can expect the creation of a downright business-hostile electorate that has no confidence whatsover that what is good for General Motors benefits them in the least.

Your mom and pop model of the world is ridiculously archaic.

The modern multinational corporation is something closer to "The Company" in the Alien series than your libertarian fantasy of a mom and pop firm. Babbling about "free markets" ignores the reality of a transnational corporate plutocracy "harmonizing" legal systems and governments througout the world to benefit a gated community shareholder elite.

You don't like economic decisions made in Washington. Would you rather they were made in the Cayman Islands ?

I suppose you're the free trade pr flack assigned to explain to us all how setting America up for an arms race 10 years from now with China that America will no longer have the technological base (guess what genius. Have you ever looked at the demographics of American technical schools lately ? Nearly half Asian. And if you can't expect a secure career in technology what American would think it a wise investment to acquire a hard science PHD ?) or the manufacturing base to win is true conservatism.

Tell me how conservative such stupidity is.

The difference, LibertyandJusticeForAll is that you are a Christian and a patriot. You aren't perfectly willing to wall yourself off from the rest of humanity behind monied callousness. That is not what Christians do. It is what libertatians do.

You don't think that the displacement of America as a great power is something you can personally just buy your way out of and won't affect you.

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