Newsweek column on outsourcing

Newsweek ^ | 8-07-2003 | Michael Rogers

[samuel_adams_us]

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?

Rogers replies: There were also some suggestions about what to do:

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.

[DugwayDuke]

"Money over morals for you eh bud? Sold your soul to the devil?"

Do you not think it's rather presumptuous to lecture me on morals when you're the one who thinks it's perfectly right and proper to lower the living standard of your neighbor in order to increase your own?

[LS]

Ah, up to YOU to find out. That's part of the essence of finding and keeping a job. I didn't ask anyone where I had to apply, or where I had to move, or who I had to beat out to get my gig.

[Dirk McQuickly]

You know what they say about a fool and his economy...

[RaceBannon]

Moron.

[Sloth]

So you state a whole new wave of jobs is being created in the US, but choose not to support your assertion.

I think I'll add you to my list of "posters to ignore in the future."

[StolarStorm]

For many, this isn't about increasing living standards. It's about survival. I'm more than willing to sacrifice a small bit of my living standard so that my neighbors can survive. But then, I actually give a damn about other people.

[LibertyAndJusticeForAll]

Ignoring 200 years of American history? Ignoring Republican Party platforms when America was great?
Just offering insults about welfare?

OPIC and the Export-Import bank are the CORPORATE WELFARE that allow offshoring to take place.

Here's how important these funds which are AMERICAN TAX MONEY were to Enron.

"Ex-Im Bank, OPIC backed 18 of firm's overseas projects to tune of $1.7 billion"
http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=26159

"The absence of OPIC and Ex-Im Bank financing created serious problems for Phase II planning. Publicly, Enron would not comment on the extent of the damage done by the loss of OPIC and Ex-Im Bank funding, stating only: “We are monitoring the situation and it is premature for us to predict any potential impact on our projects.”292 Later, the company would again reassure investors that sanctions would not affect the construction of Phase II of the Dabhol Power project."
http://www.hrw.org/reports/1999/enron/enron8-3.htm

3rd World Countries are places of near slave-wages and high risk. Their governments are unstable. The "U.S. based multi-national" corporations could tumble right along with the unrest of the country they are offshoring to.

Add in the National Security Risks that have been written about and I can provide plenty of links, including Kissinger (who said he doesn't care about the economics of it, just the politics) and there is no case to continue offshoring American jobs:
“I don’t look at this from an economic point of view but the political and social points of view. The question really is whether America can remain a great power or a dominant power if it becomes a primarily service economy, and I doubt that. A country has to have an industrial base in order to play a significant role in the world. And I am concerned from that point of view.”
http://www.freerepublic.com/focus/f-news/947266/posts

Before the Civil War the North imposed tariffs on the South because Slavery gave the South an unfair (and immoral) advantage. The last tariff brought on the Civil War and an end to Slavery. Here's Walter Williams:
"The North favored protective tariffs for their manufacturing industry. The South, which exported agricultural products to and imported manufactured goods from Europe, favored free trade and was hurt by the tariffs. Plus, a northern-dominated Congress enacted laws similar to Britain's Navigation Acts to protect northern shipping interests.
Shortly after Lincoln's election, Congress passed the highly protectionist Morrill tariffs.
That's when the South seceded, setting up a new government. Their constitution was nearly identical to the U.S. Constitution except that it outlawed protectionist tariffs, business handouts and mandated a two-thirds majority vote for all spending measures."
http://www.jewishworldreview.com/cols/williams120298.asp

Americans are competing against Slave-Wages of Third World Countries. It is an unfair advantage. China has devalued its Yuan and created an unfair advantage resulting in a huge Trade Deficit and the loss of many small and mid-sized AMERICAN manufacturing firms.
The U.S. Constitution granted power to Congress to "regulate commerce".
Congress is not doing its job to protect Americans and America.

[UnBlinkingEye]

I stand up for my fellow man when I call protective tarriffs what they are "job subsidies". Subsidizing jobs is neither "fair" nor is it "competition".

The United States federal government is subsidizing companies to send factories and jobs out of the country. OPIC is an attack on middle class American voters.

[Dirk McQuickly]

We're not talking about NAFTA/sweat-shop/sneaker factory jobs. We're talking MBA-level, hi-tech, etc. down to an ocean of Baby Boomer retirees who can't even get work at Home Depot to augment the social security checks that will be gone when the next generation tries to retire.

Once again -- capitalism is not a job program for some other nation.

[samuel_adams_us]

Really, Would anyone in IT who loses their job be lowering your level of living? After they lose their job yes, but not before, would you be posting your jibberish here if it were not for american IT? Did you know Henry Ford overpaid his workers just so they could buy a Ford car? Do you think unemployed IT workers will buy a new Microsoft product?

[samuel_adams_us]

Really, Would anyone in IT who loses their job be lowering your level of living? After they lose their job yes, but not before, would you be posting your jibberish here if it were not for american IT? Did you know Henry Ford overpaid his workers just so they could buy a Ford car? Do you think unemployed IT workers will buy a new Microsoft product?

[Lael]

To many of us it is a severe crisis. We see our jobs going overseas and see immirgrants coming to compete for those that are left. If you think something is a crisis it is. Bush would be well advised to consider this nd this issue soon. I do hope he wins, but if thing do not get better it will hurt his reelection next year.

In a speech yesterday, Howard Dean gave a well thought out argument about "not feeling constrained" to allow the "reimportation" of goods produced abroad in countries where salaries, labor and environmental standards are inadequate.

He singled out Maytag and its production of appliances in Mexico..."reimportation" of goods formerly made in the U.S.A.

Neat...doesn't directly hit NAFTA or WTO, with its Democrat fingerprints all over.

Preparing a carefully crafted political assault on Bush and the Republican controlled Congress.

[LS]

Please do, because that way I can add you to my list of unreasonable and unimaginative people.

[LS]

Hehehehe. Love your intellect. Love it. This is Gray Davis at its best.

[DugwayDuke]

Then why did you support tarriffs to protect jobs? They are nothing more than a tool to increase prices to subsidize jobs.

The whole "fair trade" tarriff argument says that it is perfectly legitimate to increase the costs of foreign goods and services to the level of comparable domestic goods and services to switch consumer preferences to domestic supplies. Wealth transfer from one segment of the population to another is inherent to protective tarriffs. When you call for protective tarriffs you are calling for wealth transfer from one segment to another. Call this "job subsidies" or call it "welfare", it is what it is.

[samuel_adams_us]

Our forefathers were for tariffs in the right situation, and so am I, they founded this country, not you, nor I. Remember that.

[Mr. Bird]

I'm more than willing to sacrifice a small bit of my living standard so that my neighbors can survive

It doesn't really matter if you're willing or not. If you're working, you're sacrificing through paying income taxes, and not a "small bit".

[harpseal]

I can say "tarriffs". Can you say: "job subsidies"? I can say job subsidies. That is what the current trade envirornment is job subsidies to foreign nations. a tariff is not a job subsidy it is a duty laid on imports into a nation. When China has %50 tariffs on American consumer products going into China and sells products in the USA without being subject to tariffs that is a failure of the Federal government to take actions it was set up to take. Now, this has been explained to you several times in the past and tyou persist in your pro-Marxist stance taht tariffs are a job subidy. I must conclude it is intent to decieve on your part.Why do you want the federal government to subsidize your income?

Actually I do not want the Federal government taking actions which subsidize foreign nations at the expense of the USA. Nor do I want teh Federal givernment artrificailly lowering prices by allowing foreign nations to practice predatory trade practices in the USA.

When you call for tarriffs to protect your job, you are calling for increased prices for some so you can enjoy an increased life style at their expense.

There is nothing that madates anyone pay increased prices for anything merely forego purchasing those items subject to duties and you will avoid having to pay this tax.Sounds like a theme more at home in the democrat party.

The Clinton administration was responsible for removing the protectionist tariffs at the last round of GATT and sponsoring China's full unrestricted access to American markets. Since Republicans are supposed to be consertvative and thus pro American I fail to see how any person who is loyal to the USA can be against protective tariffs in appropriate circumstances. Now I can see Chinses nationals against American tariffs but Americans what rational would lead someone to want teh destruction of America and fellow Americans for a lower price on say a lawn chair Gee you get for $7.79 versus $7.99. In return you have helped the destruction of the USA great bargain.

Now something from your post reprised: Why do you want the federal government to subsidize your income?

A Far better question is why do you want to harm the American economy Duke? What is it about supporting the PRC and destroying America taht so attracts you?

[Sloth]

When you call for protective tarriffs you are calling for wealth transfer from one segment to another.

Isn't all commerce wealth transfer from one segment to another?

[DugwayDuke]

"We're not talking about NAFTA/sweat-shop/sneaker factory jobs. We're talking MBA-level, hi-tech, etc. down to an ocean of Baby Boomer retirees who can't even get work at Home Depot to augment the social security checks that will be gone when the next generation tries to retire."

Why, pray tell, should I be in favor of subsidizing the income of some hi-tech MBA?