Help Answer a Nagging Question About Jobs and Economics

[Diggler]

A lot of those jobs from the 90's should never have been there in the first place. Everyone thought that they could put "E-" in front of their names (eFurniture.com, eGroceries.com, etc.) and venture capitalists would fall all over themselves to give them money... and for a little while they were right. Didn't even need a business plan, just a catchy name and a dot-com address. But like everything else, there has to be a foundation, or the whole thing will crumble.

 

[Selfdfenz]

Excellent thread IMO

Haven't made up my mind about outsorcing but I "feel" its short term + for the country will end up as a long term - for the US.

If textiles can be used as an example, we outsourced and that got the US cheaper ????s and underware. No argument. Those blue collar jobs are gone and at the labor rate 3rd world workers are paid we will never have those jobs returned or want them in all likelyhood.

So US citizens may be employed but in something besides a large part of textile manufactureing.

Now...if other traditionally US high,medium or nearly no-tech jobs follow this pattern will we see the same trend.....jobs that are permanently downloaded to other places.

If so, then US citizens may be employed but in something besides a large part of the __fill in the blank___. I wonder what they will be paid and for what?

Where does the US economy equilibrate and will it be more or less stable?

Next to oil, toys, textiles and software do we continue to add an unending number of items to the list of things we "are dependent on" from other nations?

How will political ups and downs on a global scale impact the US when many things and services are supplied in shipping containers or via sat uplink? Will we always have a few PITA things "you just can't get now" because of the elections or revolutions in country X?

If the typical US citizen has decreased buying power long term (more competitive jobs market and fewer high paying opportunities) is the US market for ALL goods and services going to be deminished as US citizens have less buying power?

How does that effect the US economy and US businesses? If I could be convinced we were only downloading some jobs and not (long term) a lot more than that, I would be on board.

And on what I hope all will consider a funny note: Will amnesty for illegals end up forcing many to wish 25 years from now they had kept they good
day jobs in Mexico City due to outsourcing?

I am trying to be a free trader but I just have a lot of questions?


S-

 

[w4rma]

The only way that Americans can compete directly with India and China in these positions is by raising their salaries to U.S. standards or lowering our salaries to their standards.

Engineers, accountants, health analysts, and other skilled offshorable jobs are available for about 10K/year in India and it is my understanding that one can live *extremely* well, in India, for that salary.

Also, China is now beginning to undercut India's prices as they educate more citizens in the sciences and trade skills. And China cares even less about worker and environmental regulations than India does.

 

[Waitone]

I am trying to be a free trader but I just have a lot of question.

Yea me too. I want to believe in the concept of free trade but I simply can not ignore reality to shoehorn my belief template onto the facts. In my case my belief in free trade was shattered when I got an inside look at what is in reality happening. Once that occured I could continue to mouth the lie, or I could break. I chose to break and then develop my own definition of what we are facing. I guess I'm much more comfortable controlling definitions than being manipulated by the unthinking herd. I can rehearse all the wonders and benefits of free trade. I actually believe it in an ideal world. We do not live in an ideal world. We live in a world where people are manipulated like poker chips and used like kleenex.

I do reserve the right to believe in free trade. . . . just as soon as someone shows an example to me I'll begin to change my views, but until then I remain an opponent and I will use my vote to remove people from office that continue to believe in what I think is a lie.

 

[mercedesrules]

Free trade is good.

The USA doesn't have it. If it did, I could buy marijuana at the grocery, Vicodin at the pharmacy and pop over to Canada and Mexico to shop medicine prices.

Never judge what is best for the "economy", the "middle class" or the "country". If a policy is good, it will be good for the individual, not necessarily one of the previously-mentioned constructs.

MR

 

[Selfdfenz]

"If a policy is good..."

IF, both letters, upper case....but then I'm not one to garb away the broad brush from the painting hand of another.

S-

 

[Selfdfenz]

Oh and...

Never judge what is best for the "economy", the "middle class" or the "country"...

Those seem like pretty good places to put the calipers to me....

Perhaps I'm missing something.

NFI

S-

 

[mercedesrules]

(MR) Never judge what is best for the "economy", the "middle class" or the "country"...

(Selfdfenz) Those seem like pretty good places to put the calipers to me....

Perhaps I'm missing something.

I'm an individualist, Selfdfenz. IMO, (coercive) policies aimed at helping groups are collectivist. They help that group...at the expense of some other individuals. That's why they are called "special interests". Added to the above special interests would be "big business", "the elderly", "veterans", "the poor", "the handicapped", "women", "minorities", "the little guy", etc.

It's the old seen/unseen. The benefits to the favored group are seen while the harms to all the rest are unseen and thus ignored. Though ignored, they are nonetheless immoral. For instance, a policy that puts a duty on imported motorcycles to help Harley-Davidson helps them but hurts all those that can't afford, or don't want, a 1400 cc. motorcycle.

MR

 

[Pendragon]

I worked with several engineers from Idnia when I was at HP.

Very bright, educated young men who are excited about their future.

They made around $6k per year and had dirt floor homes and no running water.

My friend at work took them up to his land and let them shoot guns and make smores and sleep under the stars - they were amazed - it seems you can own firearms in India, but the costs are astronomical for any but the very rich. Also, hunting is the sport of the elite, not something regular folks can do.

The way to even the field is to export OSHA and other regs to the other countries . Make them setup unemployment insurance and all the other stuff that makes it so expensive to employ people here.

Despite the cost savings, some projects have proven to be a failure and some jobs have moved back over here.

In the 1990s, tech jobs were sold as the way to be wealthy in the future. I read a prediction in about 1999 that in 5 years, tech jobs would be considered "blue collar" and would pay those kind of wages. Those days are here = nothing wrong with blue collar though, its just different than it was a few years ago.

 

[moa]

My company has been outsourcing in my particular location since 1997. Some work was sent to India like programming, and a handful of Indians brought to the States to do the same.

However, lately I have been seeing a large influx of Indians pouring into our location. Apparently many are put to work on our back office operations and external commercial accounts, with most eventually being moved to commercial accounts. According to the H-1B visa status on the bulletin board, these jobs run from $45k-$60k a year.

But no American has been or will be considered for these jobs because my management team has been told to use our "global resources" from India.

My personal manager tells me he has not had a state-side new hire allocation for an American in four and half years.

I think one reason for the large influx is that it is ineffecient to have Americans working normal business hours when the Indians have to work in the middle of the night unless we wait to communicate with each other on a delayed basis. Also, it is easier to keep an eye on them.

And, the same time we have this large influx of Indians at my company location, other company locations are laying off hundreds of Americans, some probably with the same or better skills.

 

[Gordon Fink]

Warning! Big-picture economic comments ahead.

Probably the biggest problem with unfettered capitalism is that it encourages the consolidation (i.e., hoarding) of wealth. While the creation of new wealth remains high, this isn’t too big of a problem, but as the economy slows, consolidation becomes the prodominant means of acquiring wealth. In turn, this leads to a negative reinforcement of the underlying economic problem. As wealth is hoarded, less new wealth is created, so even more wealth is hoarded, and even less new wealth is created, and so on.

The end result is that, yes, the rich get a little richer, and the poor get a lot poorer—mostly at the expense of the middle class. Eventually, the economy corrects itself, but the process is usually painful.

The trick, therefore, is to discourage the extremes of wealth consolidation in some non-coercive way. In other words, we need to share the wealth without turning to socialism to do it. However, very few seem to have figured out how to do this yet, but there are some methods we could use.

We must also realize, of course, that not everyone will be rich and that some structural poverty is necessary to fuel growth. Then all we have to worry about is the larger problem of total exploitation of finite resources.

~G. Fink

 

[fix]

Waitone don't give up on free trade entirely. What we are seeing is more a result of big government than free trade. The two are mutually exclusive, much like communism and gun rights.

 

[Gordon Fink]

No, no, no, fix! Under communism, you still have the RKBA, but you don’t own the guns yourself. The community owns them.

~G. Fink

 

[Waitone]

Waitone don't give up on free trade entirely. What we are seeing is more a result of big government than free trade.

I haven't! I am absolutely convinced that capitalism is the best way of improving the lot of everyone, everywhere.

Where I have to draw the line is when unthinking advocates of an ideology evaluate a socio-political issue through a pair of glasses which filter out the real reality of what is happening. They then make decisions which do nothing to correct the underlying problem. The situation is made all the more severe when those making decisions are in government and have the power of the gun to enforce their distorted reality.

Outsourcing is merely a market adaptation to a government imposed distortion of the marketplace. The unfortunate consequences of that adaptation unless changed will result in the loss of weath in our // my country, abandonment of a manufacturing base, and loss of technology which can be used to recover that base.

Lemme give you one simpleminded example. Advocates of "free trade" have no problem with abandonment of the manufacturing base and will cite lots of free market principals to buttress their claims. Its ok to give up (pick your favorite industry) because capital will be better used to identify and generate the next big technology. (Most insulting example here 'bouts is NC and SC textile workers need to get retrained in nano-technolgy,etc. something our idiot governor advocates). Point in fact is the industrial sector in the US accounts for 90% of all patents file. So here we have learned academics seeing nothing wrong with giving away the very engine that will create the next technology. I am not stupid, but I have a hard time following that logic.

I see market adaptations to governmental diistortions but I do not see a free market and hence free trade at work. I see at best a poor counterfeit at work. What scares me is market distortions are eventually corrected by market forces and it usually dangerous, unpleasant, and expensive. You don't fool with mother nature and you don't fool with a market economy.

 

[wingman]

He supports outsourcing because it makes businesses more profitable, at least in the short term. In the long term it destroys the middle class and reduces their buying power, increases unemployment and generally lowers the standard of living. But short term profit is all business cares about, and business is all King George cares about.

Bingo, pick up your prize at the door and prepare for your minimum wage
job of the future as we enter into the wonderful new global world.

We export jobs to the third world and import people in great numbers from
the same place, recipe for disaster..

 

[Glock Glockler]

Probably the biggest problem with unfettered capitalismp...

From where are you getting this information? I sure dont see anything near unfettered capitalism around, the closest would be Hong Kong during the days when the Brits were in charge, and they had one of the highest standards of living the world.

As wealth is hoarded, less new wealth is created, so even more wealth is hoarded, and even less new wealth is created, and so on.

Wealth is nothing more than goods and services. If the economy is bad businesses have an incentive to ramp up production when possible to make up in volume what they cannot get in price. Example: I finance equipment for a living, and when the economy is bad less people are buying stuff, so I'll work more hours to find deals cause I find less of them and the ones I do find dont have as much money in them. People in every industry are doing things like this in order to make money, so the net result is that those goods and services are that much more pleantiful and/or less expensive. Now consumers get to benefit from those lower cost items which helps them out, but consumers are also producers of other goods and services, which makes them more competative.

This is the complete opposite of what you're speaking of, and if you think the US is an example of that I puzzled by why we've has a continually growing middle class in this country and shrinking poverty rates. Sometimes it is necessary to tighten the belt through hard times, and we will have to do that in the next few decades in order to remain globally competative.

We are the global Big Dawg which means we have the biggest target on our back, every little guy out there is going to take pot shots at us and get their piece of the pie, so we can either blame others whom we cannot control or we can get our own act in gear.

I noticed that no one challenged me on my plan to improve the US economy, so I would like to know what you all think the correct approach is. If we dont outsource to places to take advantage of lower costs the Europeans, Japanese, and everyone else will, and we will be left in the dust. Now is the time to cut the fat from our economy and tighten our belts. We simply cannot afford the socialism we have built up, not when the global market is going to be more competative than ever.

 

[bobdobalina]

Baby Boomers Retiring

Something nobody has mentioned yet that is somewhat related to the issue of job losses, though not necessarily related to outsourcing and free trade is the upcoming retirement, in large numbers, of the baby boom generations. In the near future, large numbers of baby boomers will be retiring. When I say large numbers I mean in the millions. What will happen to their jobs? Do all of you think that they will just disappear? That the work these baby boomer accountants, lawyers, stock brokers, factory workers, etc.. will all cease to be necessary after they retire? No.
I think that when the baby boomer generation starts to retire there will be millions of old (not new) jobs available for younger workers. What do ya'll think?

 

[Glock Glockler]

bobdobalina,

When those millions of seniors begin retiring will they be collecting Social Security, Medicare and Medicaid, etc?

Who will be paying for all those bennies?

 

[bobdobalina]

Glock Glockler,

Our broken Social Security system is another matter entirely.

I was merely stating my belief that in the not too distant future there will be a large amount of available positions for younger workers to fill. That is an interesting thing for the chicken-little 'all our jobs are disappearing' types to ponder.

Whether there will be enough skilled workers available to take those jobs and whether those positions will be enough to support the welfare state leviathan are separate questions, although important ones.

 

[fix]

Most insulting example here 'bouts is NC and SC textile workers need to get retrained in nano-technolgy,etc. something our idiot governor advocates

When things happen rapidly, as we're currently seeing to some extent, it can be painful. When the transition spans a generation, it's not so bad. North Georgia was hit by the textile worker drain a few years ahead of the Carolinas. I come from an entire family of textile workers. My grandparents and all their siblings worked in the mills. My father and his brother, cousins, etc. felt the pain of job losses, but used their GI benefits to go to college and pursue other careers. My sister, cousins, and I are all in tech jobs or jobs that require skills of that type. So in our family at least, we made the transition from textiles to tech in one generation. Unfortunately, too many folks don't see which way the wind is blowing. Those are the folks hit the hardest. It's never safe to assume that the job market will take a generation to transform. For example, the flood of entry level tech jobs overseas will continue and the higher level IT jobs will begin leaving as well. You have to find an area of the field that isn't likely to be outsourced soon, and allows you to begin the transition to another field that can't be outsourced. I work for a company that provides security consulting services of all flavors to certain industries. Everything from computer and communications security to physical security to counterfeit prevention and all points in between. We leverage our individual experiences that encompass IT, law enforcement, business, holography, nanotech, military, legal, and several combinations of these. Just as we are an evolving company, our workers are evolving to meet current demands. Our economy is progressing at such a rapid pace that the days of picking a specialty and sticking with it for 40 years are all but gone. Cross training is the name of the game. The man with one hat will eventually see it blown away by the winds of change. He's got a problem on his hands. The man with two or more hats will just put on one of the others.

 

[7.62FullMetalJacket]

fix,

So you are saying that people are responsible for their own destiny? Come on, you know the gubbiment is responsible for the general welfare. I thought people had a right, no an ENTITLEMENT, to do the same thing for 40 years, retire with full benefits, and a gold watch, and move to Florida. With no effort on their part, of course. Security all the way.

 

[Gordon Fink]

I sure dont see anything near unfettered capitalism around.…

Glockler, I never said there was. We have a variety of regulations and controls that currently ameliorate the weakness I described. The global economy is also still expanding, which masks wealth consolidation to a degree, because while new wealth is still being created, some of it does indeed “trickle down†to everyone.

I also indicated that I was disastisfied with coercive measures being used to control capitalism’s excesses. I would prefer to see conditions that encouraged voluntary profit sharing. There are some social-capitalistic approaches that could work in this situation, but command-economy socialism is not the answer.

Wealth is nothing more than goods and services. If the economy is bad businesses have an incentive to ramp up production.…

But how are more goods and services (i.e., new wealth) created? In a shrinking economy, there is not always incentive to increase production. Dismissing employees is often a more attractive option. The unemployed have less money to spend, however, so demand continues to drop. In turn, companies further decrease production and lay off even more employees.

This is basic economics.

The goal of any public economic policy should be to moderate the boom/bust cycle of capitalism. Instead, we usually see policies that favor one end of the economic spectrum or the other. These policies may have short-term benefits for the affected group, but in the long term, they often weaken the economy as a whole.

However, unfettered capitalism is no more of a solution than command socialism. Most members of the High Road recognize the weaknesses of socialism, dogmatically at least. I am merely illustrating an inherent weakness of capitalism that often seems to go unnoticed.

~G. Fink

 

[moa]

Do not be too sure that the Baby Boomers will retire as early, or in the numbers, that have been expected.

Some financial experts like Jonathan Pond think that many Boomers will have to work longer in order to accumulate enough resources for their retirement years. Reason is because of some many advances in health and medicine, many people will live well into the 80s and 90s.

Interestingly, 75% of the people currently applying for Social Security benefits are starting as early as possible, at age 62. They will get a permanently reduced benefit.

Also, the age progression eligibility standard for the Boomers is now age 66 or later, not age 65 to qualifiy for 100% of SSI benefit. And the older you wait to collect SSI, the more the benefits rise, and quite sharply, until age 70.

According to Pond, anybody age 50 or younger can expect to get only about 70% of the benefits they would have expected because SSI will not have enough incoming revenues when they are eligible to retire.

Pond says retiree strategy should be to retire wealth and die a pauper.

 

[mercedesrules]

(G. Fink) The goal of any public economic policy should be to moderate the boom/bust cycle of capitalism.

The so-called boom/bust cycle is caused by government meddling - not cured by it.

The idea that capitalism causes these cycles is commie propaganda. They are caused by federal reserve counterfeiting and interest rate manipulation.

MR

 

[Oleg Volk]

I used a graphics portfolio by a Russian designer as an example during a lecture to my Photoshop class yesterday. I explained that in many fields, a person can be anywere and work for anyone in the world. Unless I am outright prohibited from dealing with people in other countries, I may wish to hire a person from Ghana or Germany for their unique style or for their lower rates or for some other reason. Thus, to be competitive, local workers need to compete on something other than price against lower-wage people (Ghana) and on something other than quality against high-wage people (German). On the plus side, all goods and services bought by Americans become cheaper and better because they have a choice of what they buy and where. The only way to stop foreign trade is by restricting individual freedom, and it would produce a depression at once.