But obvously, for the jobs that have left our shores, the foreign workers do not spend their money in all these places. Therefore the lack has to show up as less government revenue.
Show me your numbers. 
Posted on 02/04/2004 6:50:48 AM PST by ClintonBeGone
Outsourcing of information-technology services continues to be a hot topic — and a sore point for many IT professionals. As they stand in unemployment lines, they see their former jobs being shipped off to India, where they are now done by people making one-fifth as much. It has aroused much bitterness and led to legislative efforts to restrict outsourcing in the name of saving jobs for Americans.
I can't really offer any comfort to unemployed programmers, but the process of outsourcing is good for both the U.S. and world economies. Any jobs saved in the short-run by restrictions on outsourcing will come at the expense of better jobs in the future that will not be created.
The problem really arises because India, rather than, say, Canada or Germany, is the perceived threat. We don't generally worry about American jobs going to wealthy industrialized countries like Canada and Germany, because their workers are highly paid and cannot undercut us based on low labor costs. Because Indian workers are paid only a fraction of what a comparable American (or Canadian or German) makes, the competition is viewed as unfair.
But how did the U.S. and other wealthy countries get that way? It was by being the low-cost producer in some area. No doubt, the European farmers of the 18th century were bitter about being undercut by American farmers, whose cost of land was a fraction of that in Europe. They must have felt that this was as unfair as unemployed IT workers feel about India. But as time went by, costs equalized as capital and labor migrated to other countries and other industries. This is all part of the process of economic growth.
An article in the February issue of Wired makes this point well. It points out that Indians now doing jobs outsourced from America are seeing a rapid rise in their wages and standard of living. In the process, they are becoming more like Americans, which is translating into demand for American goods and lifestyles. The Indians also know that they can't compete only on price; the quality also has to be there, and they believe that they are delivering it.
Daniel Pink, the author of the article, goes on to make this important point: "Isn't the emergence of a vibrant middle class in an otherwise poor country a spectacular achievement, the very confirmation of the wonders of globalization — not to mention a new market for American goods and services? And if this transition pinches a little, aren't Americans being a tad hypocritical by whining about it? After all, where is it written that IT jobs somehow belong to Americans — and that any non-American who does such work is stealing a job from its rightful owner?"
Perhaps more starkly, Carly Fiorina, CEO of Hewlett Packard, recently said, "There is no job that is America's God-given right anymore."
It's worth noting that the U.S. is not the only country where outsourcing is happening. British and Australian companies are also outsourcing to India, while European companies are outsourcing to the Czech Republic and other formerly communist countries, where wages are low but education levels are high.
It's also important to know that when countries outsource work to India or China, they are only doing so for very low-end operations that require little skill or training. The high-end work and wages stay here — work that might not be retained if it could not be augmented by outsourced functions in low-cost countries like China and India.
A Jan. 30 report in the Wall Street Journal illustrates how this works, using the case of a computer mouse manufacturer called Logitech. It sells a wireless mouse called Wanda for about $40 that is assembled in China. Of the $40, China gets only $3. The rest goes to suppliers, many based in America, which make components for the mouse, and to domestic retailers. The biggest component of Logitech's cost is its marketing department based in Fremont, California, where the staff of 450 Americans makes far more than the 4,000 Chinese who actually manufacture the product.
Those 450 Americans, making good wages in California, might not have jobs at all if Logitech wasn't able to stay competitive by outsourcing some of its costs. Studies have also shown that workers displaced by outsourcing are often retrained for better jobs within the companies doing the outsourcing. Cisco, for example, is a leader in outsourcing, but has not reduced the number of its domestic employees because they have been redeployed into other areas, doing higher value-added work. These jobs often pay better than those that were outsourced.
I know that this is no solace to those who have lost jobs due to outsourcing. But the nation as a whole will be worse off if outsourcing is restricted.
ClintonBeGone is the ultimate asclown.
A nation of electricians and HVAC technicians is not likely to be a world-class military, economic, or technological power. Sure, they're all good and fine trades, but a broad-based economy is best for fostering the kind of environment that innovates, builds, and grows.
If these kids are bright and good students, try medicine, including nurse practitioner, physician assistant, physical therapist.
Again, all honorable service professions. A little weak on the R&D side, however. There are a few MD types doing research, but not many. I was part of a research group looking into treatment modalities for glioblastoma multiforme, a particularly refractory form of brain tumor. We had some neurosurgeons on the team but the only one who was any kind of scientist was from Japan. The US neurosurgeons were more like neurocarpenters, more interested in mechanical techniques for obliterating a tissue mass than solving the problem from a systemic approach, which, given the broad-based nature of the malady, was what was required.
The point is, a purely service-based economy is not one likely to be vigorous in producing new and better industries. Remember, none of us would be here doing what we're doing now (using a computer on-line) if a team of scientists working at a US research laboratory had not developed the semiconductor electronic device that replaced the vacuum tube. The transistor was invented by a team of physicists, not cosmetologists. Similarly, the superheterodyne circuit, the developmental basis for all modern wireless communications devices, was invented by a EE, not a hairdresser.
I wonder what inventions will be made in China and India when those countries become the world center of technology. Possibly they can surprise us, after all they were leaders in the past.
It is quite plausible that the Next Big Thing will merely be a new use for current technology (information or otherwise). After all, the "internet" was certainly the Next Big Thing, but the real economic benefits came from the creative people who figured out how to use it to make money.
Will we watch a movie 30 years from now and laugh when a young man is told the future is in "computers", just as we laugh now when Dustin Hoffman is told about "plastics" in The Graduate? I mean, are we so centered on IT as the boom industry that we fail to see opportunities elsewhere?
Hey, don't give these globalists any ideas. They'd probably cheer on such an outcome. A new "job" for the Ph.D.'s in condensed matter physics that are forced to work at Wendy's and Mac's: figure out the optimum closest-packing arrangement of the fries as you stuff them into the box or packet. You can get the Ph.D. in chemical engineering to calculate the optimum mix or water and chemicals as he's mopping the floor at KMart. Tell the weapons designer to use his skills down at the local beauty shop to redesign all those hairdryers. But, hey, its the "free market", and these people have only themselves to blame for choosing the wrong career. Who cares if we lack the intellectual capital and infrastructure to be a world power in military and technology capabilities? If the "free market" tells us to give those people the boot, we must do it.
Like I said, it might be a revolutionary new form of grocery bagging.
After all, the "internet" was certainly the Next Big Thing, but the real economic benefits came from the creative people who figured out how to use it to make money.
Now this comment is so far from reality that I just have to laugh.
Take Amazon, for instance. You think their success is just due to some managers scheduling meetings and pushing buttons in some VisualBasic application? You know how many software engineers have pulled allnighters and given up weekends to make Amazon succeed? You think Amazon could have just contracted that all 'unnecessary' technical stuff to Bangladesh?
And at what point do the now booming technology industries in India and China realize that they've reached critical mass, where they have all the skilled workers and sharp minds they need to be the source of the innovations as well?
Sure, and countries have destroyed their technological bases and declined in economic power throughout history. That too is progess.
But obvously, for the jobs that have left our shores, the foreign workers do not spend their money in all these places. Therefore the lack has to show up as less government revenue.
Show me your numbers.
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