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.

[samuel_adams_us]

There are hundreds more of your fellow citizens on this list. Hello Mr. President, we are paying your salary, are you listening? If not, it doesn't matter, salary or not, we vote.

[LS]

Um, your big "buy American" push in the 1980s was a joke. What HELPED (along with lower taxes) to revitalize the economy was that U.S. industry (especially cars, steel, and IT) got so competitive because of the jobs it laid off that it could afford to grow again. Ever hear of Nucor Steel? Probably not. While all the attention was on U.S. Steel's "downsizing," Nucor was creating the world's most efficient plants and the first truly integrated steel rolling mill using scrap iron as a raw material. Nucor's management to plant ratio was LESS THAN ONE. That's good. It means that you don't have layers of white collar bureaucrats between the front office and the assembly line, making products more effective. Nucor's steel output and overseas sales rose, just as did hundreds of IT/telecom firms that were relatively unregulated and which were not "smokestack industries." While the rust belt people complained about losing their jobs, a whole new wave of Americans were getting jobs that didn't even exist ten years before.

The same thing is happening now, for those not obsessed with India.

[tkathy]

This is the making of the largest national crisis in modern times other than the wars.

[Semper Paratus]

AFL-CIO is pressuring Congress on the abuses to the 2 tmeporary work visa programs.

Just one well publicized indictment of a major company by the Justice Department for visa abuse would 1) Scare others into compliance, and 2) take away the issue from dems.

[samuel_adams_us]

Really, what jobs are being created here in the States? You care to list them? I didn't think so.

[samuel_adams_us]

I can hardly wait!

[dfwgator]

The government will have just about as much luck stopping offshoring as the RIAA has with stopping the downloading of music.

[samuel_adams_us]

Really, kind of like the EU taking out microsoft.

[harpseal]

The same thing is happening now, for those not obsessed with India Then why according to the Department of labor statistics did the number of jobs in the USA fall every month fo rthe last six months. Please for a change cite some facts traitor.

[harpseal]

The government will have just about as much luck stopping offshoring as the RIAA has with stopping the downloading of music.

Can you say tariffs? A tax on offshoring easily collectable and not cost effective to avoid.

[DugwayDuke]

Do you think you have a right to a job?

[harpseal]

ping

[Mr. Bird]

This is the making of the largest national crisis in modern times other than the wars.

What, is today Hyperbole Day?

[samuel_adams_us]

No, I have the right to compete for a job in a fair competition. BTW, I have a job, just standing up for my fellow man, try it some time.

[dfwgator]

Define what exactly "offshored software" means. Does it mean if one small component was developed in India, does that make it an "offshored product?" The only people that are going to benefit from these tariffs are the lawyers who get to tie up the courts as they try to split hairs on just what exactly constitutes "offshored software."

[DugwayDuke]

"Can you say tariffs? A tax on offshoring easily collectable and not cost effective to avoid."

I can say "tarriffs". Can you say: "job subsidies"? Why do you want the federal government to subsidize your income? 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. Sounds like a theme more at home in the democrat party.

[DugwayDuke]

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".

[Dirk McQuickly]

A job isn't a right, per se. But the powers that be have a fiduciary responsibility to the nation that the economy be stable -- and be job-rich. Capitalism is not a work program for some other nation.

If you think this is not going to come home to roost in a major way in the not-so-distant future, you are sorely, SORELY mistaken. The 6.1% unemployment rate does not include the legion that have already blown through their benefits...

[LibertyAndJusticeForAll]

It is easier to read the article from the link provided and I have copied here:
http://www.msnbc.com/news/767146.asp?0cv=CB20&cp1=1

Within this article are the following links to 2 other recent MSNBC articles on this topic:

"Jobs Go Global"
http://www.msnbc.com/news/947478.asp

"Men at Overwork"
http://www.msnbc.com/news/946725.asp

[scottlang]

This is the making of the largest national crisis in modern times other than the wars.
What, is today Hyperbole Day?


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.