U.S. Offshore Outsourcing Leads to Structural Changes and Big Impact

cio.com ^ | August 13, 2003 | Diane Morello

[RockyMtnMan]

They are gambling with the idea that strong economic ties now will transcend global ambitions in the future.

Corporations benefit directly in the short term from offshoring where laborers are expected to wait and hope for new opportunities to be generated in the future.

Sounds as if the globalists are telling us to gamble with the future based on their current profit ambitions. I never considered gambling a conservative trait.

[lelio]

earlier on this thread I noted that self-serve check out lines now lets one checker do the job of four

A more current example would be: a business brings in 4 H1b visa workers for the price of one American. Hey, its just economics.

[RinaseaofDs]

You have your economic terms crossed. You describe a productivity improvement of three checkers. You made them obsolete with the application of technology, you didn't send the checker work to Nova Scotia. Welding made riveting obsolete. Steam power put sail makers out of work.

With IT outsourcing, you haven't made anything obsolete. The phone bills, a record of every call you've ever made to anybody, is in real life as we speak for every phone company in the US, handled by an Israeli company that used to be called Comverse Infosys. Your bank statements, India or Pakistan. I wonder where your medical records are being digitized? Russia maybe? Ever used a customer support line call centered in India? "Can I speak to somebody that knows something about rebuidling the IP stack?" "Sorry to be telling you, sir, but there is only me."

'Good, you deserve Dean' was this guy's answer to the original post. That's a flip response, and it is going to earn you Dean if that's the sum total of what you have to tell intelligent, right leaning, Master's Degree holding, displaced IT workers.

This kind of outsourcing allows countries that aren't exactly allies to be exposed to either very sensitive information, or outright trade secrets in the case of software application development and silicon technology.

The work is both sensitive and strategic. It isn't that the work can now be handled by your epsilon semi-moron either. Outsourcing is an improvement in marginal costs in short term at the expense of having native talent and trained labor in the long term.

Here's another problem with it. Let's assume the economy recovers, and you really need software developers, now. Those that were insane enough to get degrees in it despite the outsourcing trend are going to ask the following question: 'Ever outsource key aspects of your development to another country?'

What do you say to that? If you say yes, the guy is either going to say, "Fine, you are going to make it very worth my while in the short term." or they will say "Bye now."

What seemed like a golden boy idea for the CIO today is going to end up hanging the kevorka curse around the neck of your company for attracting key talent for the next twenty years.

[Dane]

If my way of cutting costs was dumping toxic waste into a river then I think the government has every right to step in.

Sheesh, non-sequiter hyperbole. Where has anyone mentioned toxic waste?

Hoover thought the same things about keeping the government out of the Depression and look what that got us

Yep the Smoot-Hawley tariffs Hoover signed in 1930, helped worsen the depression by starting a trade war.

[RockyMtnMan]

There's a big difference in sending them in bulk so they can keep parts on hand vs. making them smuggle them out of the country.

Don't ban the auto-checker because more skilled and higher paid workers depend on it's development. So your checkers that pay no taxes are replaced by a development team that pays approximately 20k each year over year. If the checkers want to they can develop the skills neccessary to develop their own auto-checker. Automation generally leads to more high paying jobs, offshoring just eliminates them.

[Dane]

You describe a productivity improvement of three checkers. You made them obsolete with the application of technology, you didn't send the checker work to Nova Scotia. Welding made riveting obsolete. Steam power put sail makers out of work.

Huh, in the 70's massive amounts of Americans found that Japanese cars were more productive in their life. Would you have ordered by fiat that Americans couldn't buy a Toyota or Datsun.

[lelio]

Sheesh, non-sequiter hyperbole. Where has anyone mentioned toxic waste?

Right here:
[ Dane ]: how would you feel if a government beureaucrat said you couldn't.

And I brought up a point where the government should step in, mainly to show that there is a role for government in business.
Perhaps you didn't like the example. How about "you can employ prisoners in communist China for $1/hr, should you be allowed to?"

[lelio]

Yep the Smoot-Hawley tariffs Hoover signed in 1930, helped worsen the depression by starting a trade war.

So the Depression was worsened because Americans couldn't buy goods from other countries? Do you have any facts to back that up?

[RinaseaofDs]

Because if a staunch republican can do it off the top of their head, liberals in the press will be able to carry it off pretty well as it gets down to the wire.

I'm for Bush, plan to vote for him again, twice if possible. Would love to see Murray, McDermott, Larsen, and some of the logic-impervious, business-destroying liberals relieved of their reponsibilities in representing my state.

I own a business that sells competitor information management software. Best thing you can do for your business is to profile it as if you were a competitor.

The things I just said in that paragraph are not yet Demo talking points. I have yet to hear any of the Dwarves, or the ex-co-president say any of what I just did.

But they could, and it would sound pretty reasonable to a right-leaning IT worker, wouldn't it? It might sound pretty good to a hard right guy as well.

Personally, I don't think Bush should make ANY deals with democrats. Look where it's got him? Where are all of his judicial nominees. Look at what his Dad's deals did to the SCOTUS.

As far as taxes, I am all for the new fair tax initiative, and abolishment of the IRS in the near term.

If Bush's strategy is to take issues away from the D's, then the outsourcing one is an issue that, let's say, he needs to get around to sometime in the near future.

[montag813]

Yes, we get it...sarcasm. It is funny once, not three times.

[RockyMtnMan]

He's going to wait as long as he can before he has to address the offshoring issue. His main contributors are the ones doing the offshoring.

He'll bring the issue up when he thinks he has enough cash for his campaign. If just parrots the free trade mantra he'll go down like an Iraqi Mig.

[RinaseaofDs]

Agree completely. They are going to have to be extremely careful in timing, and probably have to sit some CEO's down for a reality clarification session before hand as well.

[Dane]

And I brought up a point where the government should step in, mainly to show that there is a role for government in business. Perhaps you didn't like the example. How about "you can employ prisoners in communist China for $1/hr, should you be allowed to?"

Weak analogy, IMO. Toxic waste dumped into a river affects a person's physical health, while a business owner seeking the best price on a product does not affect a person's physical health.

BTW, when you compare prices on socks or a car, does you toxic waste analogy automatically pop into your head?

[Dane]

So the Depression was worsened because Americans couldn't buy goods from other countries? Do you have any facts to back that up?

While the consequences of the Smoot-Hawley Tariff have been a subject of dispute, few would deny that it stimulated a cascade of retaliatory tariffs by foreign governments which made it very hard for American businessmen and farmers to sell goods overseas. This took the American economy, already staggering after the Stock Market Crash of 1929, and shot it in the knee. The Smoot-Hawley Tariff may not have caused the Great Depression but it made it matters much worse.

When the Democrats returned to power they slowly began to reduce tariff rates and the Republicans with few exceptions have abandoned protectionism. Today, for the most part both political parties assert that government tariffs that either fatten the profits of poorly run businesses or keep alive jobs that do not make economic sense anymore, cheat the vast majority of Americans of the benefits of affordable goods and make it harder for us to sell our products overseas.

So it looks like it was your precious Roosevelt, Mr. New Dealer, who helped roll back tariffs.

LINK

[lelio]

So it looks like it was your precious Roosevelt, Mr. New Dealer,

I'm not sure what that comment's supposed to mean. Do you think I want another FDR? No. But you don't seem to realize that FDRs don't grow in a vaccuum: they come up as politicians and leaders sit around thinking everything's fine while millions of people watch their dreams go up in smoke. The blame for the rise of FDR can be placed partly at the feet of Republicans.

[Dane]

No. But you don't seem to realize that FDRs don't grow in a vaccuum: they come up as politicians and leaders sit around thinking everything's fine while millions of people watch their dreams go up in smoke. The blame for the rise of FDR can be placed partly at the feet of Republicans.

Well let's go back to your reply #59.

And be careful what you wish for: Hoover thought the same things about keeping the government out of the Depression and look what that got us

Well I just pointed out that Hoover did something that you are very supportive of, raising tariff.

[Cronos]

Those $50 Nikes are on the streets of Beijing and Delhi.

[Cronos]

Those $50 Nikes are being sold in the shops and worn by the folks in Beijing and Delhi.

[Marauder]

Now all we need is a conservative leader.

Fat chance.

[taxed2death]

"....what is the President supposed to do...?

Take a good hard look at OPIC.

Why is El Presedente' Jorge Bush continuing the Clinton policies of outsourcing jobs? Why is he offering big bisuness huge tax incentives to move jobs offshore? Why not offer huge tax incentives to employ more americans here at home? Why did King Jorge sign onto the L1 visa program, wasn't the H1-B visa program a big enough screwing for the American workers?

You don't have to look very long or very hard to see that our fearless leader cares more about workers in China, India and Mexico, than he does about Americans.