Comments on: Outsourcing; welcome to the world

By: danny

danny — Sat, 28 Feb 2004 13:35:39 +0000

An interesting discussion on the same topic is over at techpolicy. The question – are there better ways to protect workers in developed nations in north america and europe? How can we reduce the cost of employing workers in developed nations? Perhaps we can find more efficient ways of working, and offer easier access to education? When the median new home price in Silicon Valley is close to .5 million dollars, it’s clear why low cost centers like India and Philippines can become so attractive to global minded businesses. One proposed solution for developed countries – embrace telecommuting. It may be an idealist dream on my part. But, the benefits would be, more productive hours in a day for a worker (minus 1 hour + of commuting time and headache) and reduced living costs. ds

By: Ken

Ken — Fri, 20 Feb 2004 15:46:20 +0000

“Anyone who has a professional degree rather than a liberal arts one.. How many civil engineers are employed as biochemists ? How many doctors are practicing law ? How many CS/IT graduates are employed in nanotech ? Do you think there’s a reason for these phenomena ?” 1. Some fields are restricted by law. 2. It takes time to switch. 3. The vast majority of these people are still gainfully employed and don’t need to switch. During the IT heyday, and even today, lots of workers have non-CS degrees. Extending the IT regulatory regime across the board would improve matters for IT professionals wishing to switch and for the customers of other industries.

By: Erik Rosaen

Erik Rosaen — Thu, 19 Feb 2004 21:17:36 +0000

Globalization is good. Prices are lower. Civilization depends upon specialization and the rest of the world needs jobs too. We were all willing to believe this when it was just the blue-collar jobs going away and we must stay the course now. The alternative (any actual protectionism) is so much more dangerous that a lame growth economy is nothing by comparison. Do we want our children to end up talking about the (Second) Great Depression? It can happen!

By: Douglas

Douglas — Thu, 19 Feb 2004 20:05:23 +0000

limberwulf said: “those $100,000 educations can still pay off if those educated dont insist on taking the exact job they went to school for 4 to 6 years prior. Who does that?” Anyone who has a professional degree rather than a liberal arts one.. How many civil engineers are employed as biochemists ? How many doctors are practicing law ? How many CS/IT graduates are employed in nanotech ? Do you think there’s a reason for these phenomena ?

By: limberwulf

limberwulf — Thu, 19 Feb 2004 14:34:18 +0000

good point derrida, I am a good health risk, not a chronicly ill person. However, health care that is perceived to be free, i.e. government paid health care, will tend to make people go to a doctor for lesser reasons. I know a great many people that go to a hospital or doctor for a great many things that are not at all serious. This creates a far greater load on the medical proffession, lending to greater costs of health care and to the insurance companies due to higher volume. Also, in a system of tax-paid health care, the cost is not distributed accross everyone equally, as your formal argument would imply. The costs are heaviest on the wealthy and successful and the unemployed, poor, etc., have no liability at all. The premiums then, in the form of taxation, are still incredibly high on only a few people. I may be blowing the curve by not opting for a lot of insurance, but I think that is no worse than those blowing the curve by opting to visit the doctor for every little thing and getting a drug for it. Please understand, I know there are people with legitimate needs, and were I one of them maybe my tune would be different, but I still dont see why the many should be sacrificed for the few, nor the few for the many.

By: BP

BP — Thu, 19 Feb 2004 10:20:09 +0000

“Just to satisfy a pet peeve, please note that mankind has survived for centuries without stinking health insurance, for the children or anyone else.” Yeah, with a life expectancy of thirty years, and with only one in three kids surviving childhood. “Not being afraid of every boogie man around the corner has done more to improve my success and free up resources than anything else.” Here’s a nickel, kid. Go buy yourself a medal.

By: derrida derider

derrida derider — Thu, 19 Feb 2004 06:53:42 +0000

Limberwulf – You are clearly a good health risk. would you be so happy to self-insure (through saving) if you had a chronic health problem? Did you ever hear the term ‘adverse selection’? It’s an insurance term – it means that the higher the premiums, the fewer good risks buy the product, which in turn means that you have to raise the premiums, which then drives out the medium risks, which raises the premiums … and so on. You eventually reach the point where only the really, really bad risks take out insurance. This is the formal economic argument for universal health insurance – compulsion forces the good risks to pool with the bad and so makes the system stable.

By: david foster

david foster — Thu, 19 Feb 2004 04:32:31 +0000

1)Maria…good post..brings up aspects of offshoring that receive too little attention. 2)Jeremy…you ask “How does it create a middle class in a developing country to have an externally-owned factory there?” A factory normally consists of more than people performing minimally-skilled jobs. There are, for example, likely to be (on the “white-collar” side) production control specialists, purchasing people, and finance people. On the “blue-collar” side, skilled craftspeople (repair, setup, etc). And for management, various shift & department supervisors, and finally the plant general manager. All of these people probably fall somewhere in the middle class, except possibly the plant GM who may be above this leve.

By: limberwulf

limberwulf — Thu, 19 Feb 2004 02:19:09 +0000

Just to satisfy a pet peeve, please note that mankind has survived for centuries without stinking health insurance, for the children or anyone else. There are so many people in this country that are insurance poor. I have absolute minimal insurance, I was raised in a family that operated the same way. Not being afraid of every boogie man around the corner has done more to improve my success and free up resources than anything else. Yes, I have had to pay some medical expenses out of pocket, but I have been able to do so because I invest and save. And dont say “what about those who dont”, because, at the risk of sounding heartless once again, they should have. Medical insurance is reaching the point that if you invest what you put in your HMO, you wont have to stay healthy very long before you can pay your own expenses.

By: roublen vesseau

roublen vesseau — Thu, 19 Feb 2004 01:39:01 +0000

the thing is, outsourcing is a net economic benefit to the US, but the people who are benefiting are executives and perhaps upper managers, business owners, stockholders and perhaps consumers . The people who are losing are the workers whose jobs are being outsourced. The sensible solution is for the winners from outsourcing to share their winnings with the losers, but because the free market fundamentalists are in charge, who believe that property rights are inviolable, and that redistributing from those who have a lot to those who have a little is a bigger moral outrage than homeless people and children without health insurance, it’s not happening.

By: Tracy

Tracy — Wed, 18 Feb 2004 23:20:43 +0000

humeidayer – why don’t you mention how Hadji in Bangalore benefits, in your summary of the lifes of Mikey Mensch and Richie Rich? As a non-American, Hadji in Bangalore strikes me as equally worthy of being added into the costs and benefits as Mikey or Richie. And some of those University of Chicago economists might actually be happy that Hadji now has enough money to feed his family, and consider that at least goes someway to offsetting Mikey’s problems with his student loans.

By: limberwulf

limberwulf — Wed, 18 Feb 2004 23:07:35 +0000

Thats true bp, people get screwed. Some people are not in a position to readjust in time to keep their creditors at bay. So what is the solution? Unions? Nice thought, but often the reason businesses are headed elsewhere is the increased cost of employees in Buttfuck, Montana. That increased cost is due to taxation, regulation, lawsuits, and high wage markets. Increased taxation companies that outsource? Also an interesting concept, and certainly a revenue creator for the government. However, even if I trusted the government to use the funds specifically to help retrain and support displaced workers (based on historical actions, I have no such trust), there remains the issue of cost. Many items created in these factories are not necessities of life. If the cost of production is prohibitive, then the cost of purchase will be also. If that cost gets too high, the workers get laid off, not due to outsourcing, but due to business closing and downsizing. Forcing minimum wage requirements to apply to overseas employees? See above argument. The best thing to do is remove as much restriction as possible and make it as profitable and attractive as possible for companies to stay here. There are many companies that move due to costs of doing business in the US that have little or nothing to do with wage levels. Beyond that, I have seen little alternative other than finding alternate means of supporting oneself and one’s family. I am not unsympathetic to the plight of the laid off worker. I have been laid off, I have even been laid off of IT, and I am now in IT once again. Life goes on. I may sound cold, but Id rather be cold than utopian.

By: BP

BP — Wed, 18 Feb 2004 22:18:25 +0000

limberwulf, since time immemorial laid-off people both blue and white collar have had to listen to well-meaning ideologues tell them that they are being too picky, inflexible, resistant to change, etc etc etc. Free markets are great and all that, and liberalization may indeed lead to a net benefit for society as a whole, but get it thru your thick skull that some people get screwed, screwed good, and screwed permanently, when the industry they work in disappears. A 50 year old plant worker in Buttfuck, Montana, with three kids and a mortgage, is fucked when the plant closes down. Period. Your living standard may rise, mine may rise, most of us may be better off as a result, but Mr. Buttfuck Montana is still screwed, and there’s no frigging point insisting it’s all in his mind, and if he wasn’t such a stick in the mud he could be making big bucks as a personal trainer in the Bay Area.

By: Barry

Barry — Wed, 18 Feb 2004 21:04:25 +0000

“However, there will continue to be a great deal of work in customizing systems and gathering requirements. Also, overseas projects are very very hard to run effectively, and a couple of massive cost overruns will have people shifting back to local development. It’s the same reason pre-packaged business applications have never really taken over the market; you give up a great deal of control.” Posted by Kevin Brennan · February However: If half of all programming jobs aren’t outsourceable in the next 5 years, that still puts enormous pressure on most programmers. If their jobs aren’t being offshored, they’ll face competition from the guys whose jobs were offshored. Also, every offshore project builds skills (both domestically and internationally) to do them better. Cost overruns are probably not much of an issue, since they occur domestically, and the the starting point is much cheaper labor.

By: Jason

Jason — Wed, 18 Feb 2004 20:20:52 +0000

To me, the complaints about outsourcing seem to be more complaints about income redistribution, ie., where does the 80% saved go? If it went into the hands of the programmer who was outsourced, and provided the money for retraining, or allowed them to move to a higher level in the food chain, then this wouldn’t be an issue. I’m not sure I have a panacea, but one way to deal with it might be to have higher tax rates, and use the extra money earned to pay for the displaced programmer (either income insurance, or retraining expenses, or retirement benefits). Of course, raising taxes is a tough sell.