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Discussion in 'Politics, Religion, Social Issues' started by diamond geezer, Mar 10, 2004.
First off, lemme say I don't understand why outsourcing itself is stated to be a Good Thing, given the problems it causes our work force; at least not in the context that was used. Outsourcing makes sense for consumers, since it provides goods and services at lower prices. Since so much of the U.S. economy is consumer-driven, outsourcing means the costs of our toys has been relatively low compared to the past.
But to try to show some direct connection, as in this article, with regard to the politics just doesn't make sense. There are no laws being circumvented in outsourcing, to begin with. Next, outsourcing has been going on since before Dubya even started his political efforts. Hell's bells, we've had the "maquiladora" manufacturing plants along the border in Mexico for decades. (U.S. and other foreign manufacturers' parts are assembled in these plants and then brought into the U.S. It's a tariffs/taxes thing. It was also intended to slow the flow of illegals into the U.S.) Some of GM's car parts came from Canada, forty-two years ago to my personal knowledge. I built up a hot-rod VW motor in 1982; many of the parts came from Mexico, and the Italian (Weber) carburetors came from Brazil--and I bought the parts from a California parts house.
But it's an election year, and there will always be some political slant to articles such as this one. While they may have given less, betcha these same companies have donated to the Dems, as well.
You make a good point. It seems to me, and I'm no expert, but didn't Clinton get this ball rolling? Wasn't he the guy who got NAFTA into action when 12 years of Reagan/Bush was never able to do it. Am I wrong in thinking that?
That is not to say I don't think Outsourcing is a bunch of BS, as an economic policy been pumped up by a current administration. Yeah sure, keep the toys low, prevent inflation, I think I understand all that. But A) I think the biggest problem in this country isn't the fact that our toys are too expensive, but that we have too many toys, we're overrun with toys, we got toys coming out our eyeballs and we're drowning with them. And B) call my cynical, but when we start outsourcing jobs, do our prices go down, or does executive pay go up?
Another thing I don't get - it seems like GW's policy of encouragin outsourcing coupled with his policy of encouraging illegal immigrant coming to work the jobs "Americans aren't willing to work" are in direct opposition. The idea of outsourcing, as I understand it, is that we take all our manufacturing jobs and move them to places where we can pay people cheap cash to make them, keep our costs low, then US Americans get new jobs that don't have a chance of being moved away - ie Walmart attendants and fast-food servants. But when you bring in the Mexicans to do that (and no offense to the mexicans), where are all the Americans going to work? Seems like the two policies butt-heads - might be good for the US Corp bottom line short-term, but bad for our working public.
profits go up, which imo increases executive pay *and* improves share price. so among the population at large, the winners are those who are invested. the losers are those who make a living by, er, working.
Davis, I don't make a connection between NAFTA and outsourcing. For one thing, outsourcing and exodus had been going on long before. And, our exports to Mexico increased after the passage of the treaty. Trouble is, the Chinese under-priced us, in things like home appliances as example.
Our balance-of-trade deficit has been growing at a rate of near 28% per year over the last ten years. That money has enabled foreign investment in industrial plant, which has undercut our own ability to control any prices of products and thus has lowered our production and jobs. That money has also bought a lot of U.S. debt, enabling deficit spending. IOW, outsourcing, corporate exodus and deficit spending are all tied together, albeit indirectly in some instances.
And, yeah, I think there are too many toys. Just pick up a Cabela's catalog; it's but one of several catering to the outdoorsmen. Or go by a Bass Pro Shop. All that is aimed at selling into disposable income, and a lot of the products aren't cheap. And, do we really NEED all that crap advertised on TV? Credit card debt per household is some $8,000 average; add on another $10,000 per household for other non-mortgage debt. That's mostly toys and gratification, much of which comes from the purchase of foreign-made stuff--and a lot of that is indeed outsourced, even if it's sold by a domestic company.
Railing against the Bushies won't help, and Kerry can't solve the problems. Only time will allow the world's markets to adjust to the changing conditions. IMO, it's gonna be a fairly long and a very rough time.
i think you're right.
w/ communication and transportation costs low, the cost of outsourcing is less than the difference of the wages of the workers of the respective countries. there's just now way a US union laborer can compete, wagewise, w/ a Chinese laborer. and w/ the advent of cheaper, faster telecom (couresty, in no small part, of US firms), it's cheaper to outsource some white collar jobs, too.
i think americans are in for a hugely gigantic shock when more jobs are lost, the markets decline (or tank, or disappear) and the debts come due.
aside from my mortgage, i'm happily debt-free. now only if the market will stay propped up...
I agree with your assessment. But I don't think that foreign countries are entirely at fault. Or if there is a fault, it is because of foreign labor.
Here is a recent article. The article doesn't address the question head-on. Its actually a debunking of an explanation given by people that refuse to see that the US is losing blue-collar middle-class jobs.
In my industry, I see outsourcing. Computers used to be made in the United States by their respective companies. Remember the pictures of Apple factories churning out Apple IIs? Then, it went to companies contracting out their manufacturing to other companies such as NatSteel, Jabil, etc. These are companies that manufacture assembled printed circuit boards for lots of different companies.
Now, you have these companies going offshore, and scaling back or shutting down their US factories. I'm sure the same thing is happening with the machining industry, and a whole slew of other developed industries. The stuff happening in the US is mainly for new developments, and the factories are there to support the R&D, like say, a new way of machining a part where all the kinks have not been worked out yet.
But with the pace of communication, and travel, I see these new manufacturing methods being phased in quicker and quicker into the foreign countries, where LABOR COSTS, EMPLOYMENT REGULATION, and ENVIRONMENTAL REGULATION are low or nonexistent.
It sounds like before, the pendulum was well into NO REGULATION to the detriment of the employees and the environment, but now, its well into OVER REGULATION, and the jobs are going to the other places. I think there needs to be a balance.
If this keeps up, I think we will see a return to the poor depression era America, and a return to more environmental destruction.
Outsourcing is a brilliant way for the individual business to increase profits big time. Big time profits they are looking for in the short term BUT most of these people are making descisions for the short-term profit. That's all that count for them, the NOW. What they don't or refuse to acknowledge is that in the LONG term is going to destroy this country and strengthen others. Unemployment will go up and the the Gap between the Rich and Poor will grow further and further apart. Middle class might just disappear all together...
frohickey, it seems to me that a major part of our problem is the penchant for seeking simple or simplistic answers. Folks want to blame NAFTA, ala Ross Perot. Or outsourcing, as if that's some new and strange conspiracy against "the working class". For others, it's the deficit and the Bushies. As you noted, few are aware of the effects of the regulatory burdens we've placed upon our businesses.
If you can't see all the various parts of a problem, how the heck can you even begin to solve it?
I can see bits and pieces, but that's about all. And I'm one of these characters who spends a lot of time reviewing economic data from around the world! (Goes back to my vest-pocket bullion dealing and watching precious metals prices vary with geopolitics and such.) About the only definite conclusion I can draw is what I've mentioned before; there ain't no political solution. Sure, certain assistance from government can help in a short-term sense, but that's not problem-solving...
I think what's changed is that previously, it was the blue collar manufacturing jobs going overseas. Now, it seems to be the white collar jobs going. (I don't know how many other color collars that leaves.)
At risk of derailing the thread, personally I think if corporate America had some reassurance that employee health care costs would not continue to skyrocket, perhaps they would be more willing to hire domestically. Also, I think that IT wages here are going to have to come down. (Mean old Mr. Supply-and-demand there.) There was a story yesterday on ABC Evening News (I think it was) about some small start-up wanting to pay only $40K for an IT position. Of course they got someone.
I have to point out that all our "toys", i.e. consumer spending, are what is propping up the economy right now. I'm all for other people spending as much as they can comfortably afford right now.
I'm not sure I agree with the original premise of this thread -- that Bush supports offshoring because of campaign contributions. I checked the donors on www.opensecrets.org, and while there's some overlap, this could be explained simply that large corporations have an interest in donating to politicians in general. Also, many donors don't appear on this outsourcing list -- I guess the argument could be that they expect some other perk from Bush.
I would just be happy if gas prices came down, and the health care issue got serious attention.
This link is also interesting: http://www.rescueamericanjobs.org/index.html
I wear aloha shirts most of the time. Does that mean I don't have to worry about being outsourced until they get around to tropical design collar jobs?
I've mentioned this theory before (no, not the aloha shirt theory), but I believe we'll get universal health care in the US when the corporations demand it. US manufacturers already support the universal system in Canada because it saves them a couple of dollars an hour in labor costs. This is why so many "American" cars are assembled in Ontario. The day will come -- and I don't think it's too far off -- when US industry will become completely fed up with chasing health care costs and enduring job actions over health care. Once they've outsourced has much labor as they are able, and have hacked back on the medical care benefits they offer to employees to a bare minimum, they'll find that that the entire business of providing health care has become a huge net negative to their bottom lines.
Then major corporations will begin talking like what Republicans today call "socialists." I predict it will be an interesting debate.
Instead of doing that, why not just pay the workers what they would have paid for in health care insurance. A non-smoker, fit and trim, young person would save a few bucks by opting not to have health care insurance for a few years.
That would be fine as long as the cost for health care was the same for the worker whether s/he was paying for it themselves versus what they would pay as part of their group. Otherwise the employee gets screwed under your system because their individual buying power is less than a group buying power.
This is true, but I don't think it works even with your qualification. The opting out of the system by younger and healthier people is one of the structural problems with the health care system today. This biases the system towards the older and less healthy and drives up costs to the insured. Of course our young and healthy person who opts out is going to expect the health care system to be there for him when he's no longer so young or healthy. And, if he doesn't beat the odds while he's without coverage, he'll very possibly end up on the public health care tab. Gaming is not the solution.
In terms of the inevitability of outsourcing and globalization - I don't think it has to be inevitable. (what a crappy sentence).
We can view this last 25 years of it as an experiment and really look at the data about jobs and effects. Maybe the current system is NOT the only one we can have. Maybe the US can lead the way to a more humane system. Actually I think since we lead the way into this system we should lead the way to next one.
What might a better system be?
Well, that's fine but what percentage of the workforce is young, fit, and a non-smoker? About 2% according to my visual assessment. Obesity is about to take over from smoking as the #`1 cause of death in the US, our health care costs aren't linked solely to the effed up US health care system but also to our slothful ways.
Maybe. But as I have said, there is no technical reason why health care insurance cannot be bought/sold the same way car insurance and homeowners insurance is sold.
Collective bargaining might be great when you are part of the collective. But it not so great if you are not. Having the employee provide for their own health care insurance would level the playing field for all parties, the same way it is for car insurance. People that have lots of tickets, lots of accidents cost more to insure. People with poor lifestyle habits, with poor eating habits will cost more to insure. The ones that are not, don't.
People with genetic predispositions to disease will cost more to insure too. What do we do with them?
oh yeah -- i don't place the blame there. countries that have lower costs of living and lower standards of living will be more competative (assuming the skills are there).
the US trying to keep these jobs is a losing battle, imo. while i'll support some "keep it here" incentives, and definitely support helping small business, i don't want the US to go on another protectionist bender. it won't help in the long run.
so how does the US compete? by having the best skills, imo. that's why i think education is so friggin' important. but there's been a widening skills gap for years now, and i feel that a huge segment of the US population is in for a rude awakening.
a good example of how the US can compete
i don't think the US companies are so regulated that they can't compete. i see how it can contribute to the competativeness issue, but i think it's small compared to some others i've mentioned.
they say marketing and administrative costs add 25% to our US healthcare bill.
"i don't think the US companies are so regulated that they can't compete. i see how it can contribute to the competativeness issue, but i think it's small compared to some others i've mentioned."
I was just reading yesterday an estimate of the cost of our red tape and paperwork. Submitting reports to the various alphabets--EPA, OSHA, etc--and dealing with IRS as well as local governments. It's a half-trillion bucks a year. Lotsa work for accountants and lawyers, of course, but no profitability compared to the foreign folks.
Lotsa R&D goes into making a car's engine meet EPA standards for five years or 50,000 miles with NO adjustments allowed. That's part of the extra $4,000 to $5,000 you pay when you buy a new car. (Includes the air bags and all that other stuff, of course.) Dynamometer test cells and engineering staff are not cheap.
The scrubbers for a coal-fired power plant add some $300 to $400 million to the construction cost.
Pollution control equipment for steel mills and steel fabricators doesn't come cheap. Same deal for the petrochemical industry.
Sure, these are desirable results, as to safety for the workforce and reduced pollution for all of us. No question.
You are free to go where you like to maximize your income, your own version of profitability. So is any corporation. From a morality aspect, I find it to be a problem. Trouble is, when it's an issue of survival vs. bankruptcy, I have no alternative answer. While bankruptcy might be less of an issue now than when all this outsourcing and exodus started, it has been a real factor. IOW, for some endeavors it still is--and they're not coming back here.
According to the figures I've seen, 25-35% of our health care tab goes towards the care and feeding of insurance companies. Add to that the inefficiencies created by a system that treats millions of people only after they become acutely ill, and we can see why we pay a lot more for our health care system and get less out of it.
IJ, don't insurance companies have overhead? Have retirement funds? Doesn't the federal (or any other level) have overhead? Retirement funds?
What percentage do you think is eaten up by administrative overhead in federal social programs? I don't have any way of verifying, but I've read that it is near half of the budgeted monies. But, I dunno.
My point is that were our entire medical system a federal program, a large amount of the money is gonna go to overhead, and I seriously doubt it would be less than for insurance companies as we now know them.
Purely in the FWIW department: City and county employees; the post office and the Social Security office in Thomasville, Georgia all draw from the same labor pool as does the private sector. I've had occasional dealings with the public sectors mentioned, as well as extensive dealings with the private hospital system there. From the standpoint of looking at people as people, as to their friendliness and helpfulness and suchlike, I'm far more highly impressed with the private hospital than with the public employees. I thus tend to wonder at how the behavior would be with a federalized medical system...
Since when were you, or I, elected by people with genetic predispositions to disease to take care of them?
I would not presume to take the role of caretaker/master of other people.
Even if they pleaded for me to take care of their lives, I would refuse. (But if they pay me to take care of them, sure. )
Inefficiencies created by a system... sounds like a market opportunity for an enterprising young maverick to gain wealth and provide a valuable service to his/her customers.
Competitors love inefficiencies, especially if the inefficiency is in their competitor. Because that creates a way for them to become more efficient, provide a better service to customers, and grow market share.
In a single pay system, where there is no competition, what is the incentive to become ever more efficient?