[1rudeboy]

If you have 10 jobs, and ship 5 overseas, how does that result in rising productivity?

[CWW]

Look, we live in a market driven/profit driven country. CEOs are pressed to show gains to stckholders. If they can outsource to a foreign country and reduce expenses, they are obligated to do so because their legal obligation is to the shareholders.

Don't get me wrong -- I think losing our manufacturing base is not good for the country as a whole. But we need to face facts -- just as the steel industry went overseas, so will other manufacruing jobs. It's jsut like water seeking its lowest point -- it will flow where there is the least resistance.

[CasearianDaoist]

Well of course it doesn't - it results in higher profits.

To mask this slide of hand they call it a "rise in productivity." It is the "boss-speak" of the new era.

[Malsua]

>>If you have 10 jobs, and ship 5 overseas, how does that result in rising productivity?<<

It doesn't if numbers were reported accurately.

However, if I outsource the labor intensive bits of a process and buy a more complete "raw material" and then finish it or package it or put a sticker on it it now looks like I've produced the same thing as before with fewer people and for a lower cost. Productivity doesn't take into account the additional work produced by upstream providers. It just takes into account the cost of raw materials.

If I lay off 20 people here who get $10/hour for $200/hour labor cost and replace them with 100 people making 50 cents an hour in China, my resulting labor cost is now $50/hour. The difference is that those 100 people aren't counted as employees because they don't work in the US.

Before outsourcing/offshoring I would spend $200 in labor, $50 in material and all other costs for $250/hour total production cost.

After outsourcing/offshoring, I buy a mostly or completely finished good that may cost me $75 for an hour's production cost.

Instead of having 30 employees, now I've got 10. The bean counters call it "productivity" to do the same final output with 10 employees instead of 30 and I'm doing it for about 1/3 the cost. This is where all that miraculous productivity is coming from.

[KC_Conspirator]

If you have 10 jobs, and ship 5 overseas, how does that result in rising productivity?

Because the difference in paying lower wages and no health insurance equates to higher productivity. Its also the reason that these job growth numbers are disappointing.