Don't get me started...
The very LEAST I see from all this is a depression in 10 to 15 years.
But I have always been an optimist :}
--
George Patrick
Tektronix, Inc.
Central Engineering, PCB Design Group
P.O. Box 500, M/S 39-512
Beaverton, OR 97077-0001
Phone: 503-627-5272 Fax: 503-627-5587
http://www.tektronix.com http://www.pcb-designer.com
It's my opinion, not Tektronix'
-----Original Message-----
From: [log in to unmask] [mailto:[log in to unmask]]
Sent: Thursday, April 01, 2004 10:43
To: [log in to unmask]
Subject: Re: [DC] tech jobs overseas...
So this is really like the fall of Rome then, right? Fun while it lasted,
wasn't it?
Didja ever read any William Gibson? National governments collapse with
global corporations taking their place...
Stan Radzio
<[log in to unmask]> To:
[log in to unmask]
Sent by: DesignerCouncil cc:
<[log in to unmask]> Subject: Re:
[DC] tech jobs overseas...
04/01/2004 01:28 PM
Please respond to
"(Designers Council
Forum)"; Please respond to
Stan Radzio
BusinessWeek
MARCH 22, 2004 * Editions: N. America | Europe | Asia |
This is from the March 22nd issue of BusinessWeek and is the most
intelligent commentary on job outsourcing that I have read to date.
BusinessWeek online invites its readers to email a particularly good column
or commentary to others hoping to pique the interest of someone who might
then like to subscribe. Though I am sure this is copyrighted, they don't
mind us sharing so long as they get credited.
Guest Commentary: The Harsh Truth About Outsourcing
It's not a mutually beneficial trade practice -- it's outright labor
arbitrage
by Paul Craig Roberts, a former Assistant Treasury Secretary in the Reagan
Administration and a former BusinessWeek columnist.
Economists are blind to the loss of American industries and occupations
because they believe these results reflect the beneficial workings of free
trade. Whatever is being lost, they think, is being replaced by something
as good or better. This thinking is rooted in the doctrine of comparative
advantage put forth by economist David Ricardo in 1817.
It states that, even if a country is a high-cost producer of most things,
it can still enjoy an advantage, since it will produce some goods at lower
relative cost than its trading partners.
Today's economists can't identify what the new industries and occupations
might be that will replace those that are lost, but they're certain that
those jobs and sectors are out there somewhere. What does not occur to them
is that the same incentive that causes the loss of one tradable good or
service -- cheap, skilled foreign labor -- applies to all tradable goods
and services. There is no reason that the "replacement" industry or job, if
it exists, won't follow its predecessor offshore.
For comparative advantage to work, a country's labor, capital, and
technology must not move offshore. This international immobility is
necessary to prevent a business from seeking an absolute advantage by going
abroad. The internal cost ratios that determine comparative advantage
reflect the quantity and quality of the country's technology and capital.
If these factors move abroad to where cheap labor makes them more
productive, absolute advantage takes over from comparative advantage.
This is what is wrong with today's debate about outsourcing and offshore
production. It's not really about trade but about labor arbitrage.
Companies producing for U.S. markets are substituting cheap labor for
expensive U.S. labor. The U.S. loses jobs and also the capital and
technology that move offshore to employ the cheaper foreign labor.
Economists argue that this loss of capital does not result in unemployment
but rather a reduction in wages. The remaining capital is spread more
thinly among workers, while the foreign workers whose country gains the
money become more productive and are better paid.
Economists call this wrenching adjustment "short-run friction." But when
the loss of jobs leaves people with less income but the same mortgages and
debts, upward mobility collapses. Income distribution becomes more
polarized, the tax base is lost, and the ability to maintain
infrastructure, entitlements, and public commitments is reduced. Nor is
this adjustment just short-run. The huge excess supplies of labor in India
and China mean that American wages will fall a lot faster than Asian wages
will rise for a long time.
Until recently, First World countries retained their capital, labor, and
technology. Foreign investment occurred, but it worked differently from
outsourcing. Foreign investment was confined mainly to the First World. Its
purpose was to avoid shipping costs, tariffs, and quotas, and thus sell
more cheaply in the foreign market. The purpose of foreign investment was
not offshore production with cheap foreign labor for the home market.
When Ricardo developed the doctrine of comparative advantage, climate and
geography were important variables in the economy. The assumption that
factors of production were immobile internationally was realistic. Since
there were inherent differences in climate and geography, the assumption
that different countries would have different relative costs of producing
tradable goods was also realistic.
Today, acquired knowledge is the basis for most tradable goods and
services, making the Ricardian assumptions unrealistic. Indeed, it is not
clear where there is a basis for comparative advantage when production
rests on acquired knowledge. Modern production functions operate the same
way regardless of their locations. There is no necessary reason for the
relative costs of producing manufactured goods to vary from one country to
another. Yet without different internal cost ratios, there is no basis for
comparative advantage.
Outsourcing is driven by absolute advantage. Asia has an absolute
advantage because of its vast excess supply of skilled and educated labor.
With First World capital, technology, and business knowhow, this labor can
be just as productive as First World labor, but workers can be hired for
much less money. Thus, the capitalist incentive to seek the lowest cost and
most profit will seek to substitute cheap labor for expensive labor. India
and China are gaining, and the First World is losing.
-Stan
-----Original Message-----
From: DesignerCouncil [mailto:[log in to unmask]] On Behalf Of
Brooks,Bill
Sent: Thursday, April 01, 2004 10:09 AM
To: [log in to unmask]
Subject: Re: [DC] tech jobs overseas...
http://www.msnbc.msn.com/id/4631368/
the latest figures
'In three years the U.S. has lost 400,000 service and 1 million
manufacturing jobs to offshoring, Goldman Sachs says. Some 3.3 million
white-collar jobs (and $136 billion in wages) will flee the U.S. in the
next ten years, Forrester Research says. All told, up to 14 million U.S.
jobs are vulnerable to offshoring, say researchers at the University of
California, Berkeley. Another problem:Even when American employers don't
move jobs to India, they have virtually stopped creating them in the U.S.
when the tasks can be done more cheaply abroad. The U.S. service sector is
6.2 million jobs shy of the hiring that typically accompanies an economic
recovery at this stage, in part because of the move overseas, says Stephen
Roach, chief economist at Morgan Stanley.'
What's disturbing is the list of hottest jobs for the next few years...
http://stats.bls.gov/emp/emptab4.htm
Looks like mostly service jobs...
They do see growth in computer software and 'consulting' jobs...
http://stats.bls.gov/emp/empfastestind.htm
I didn't see PCB designers in there anywhere.... unless they come under the
'consulting' heading...
Bill Brooks
PCB Design Engineer , C.I.D., C.I.I.
Tel: (760)597-1500 Ext 3772 Fax: (760)597-1510
-----Original Message-----
From: [log in to unmask] [mailto:[log in to unmask]]
Sent: Thursday, April 01, 2004 9:18 AM
To: [log in to unmask]
Subject: Re: [DC] tech jobs overseas... [mx]
One more comment... maybe "outsourcing" will cease to be an issue soon.
Some companies (that will remain nameless here) are already creating
"design centers" in 3rd world countries. So the political problem is
solved; "We didn't outsource your job, we redistributed the existing
workload within the existing organization and can no longer justify your
continued employement."
But you wanted good news.... sorry about that.
"Allen T. Maddox"
<allen.t.maddox@GAI-TRONIC To:
[log in to unmask]
S.COM> cc:
Sent by: DesignerCouncil Subject: Re:
[DC] tech jobs overseas...
<[log in to unmask]>
04/01/2004 11:45 AM
Please respond to
"(Designers Council
Forum)"; Please respond to
"Allen T. Maddox"
In my passive observation in my neck of the woods I've seen a few different
trends that are scary.
1) Sure, tech jobs are going overseas (Eathlink moved 400 customer service
jobs from Lancaster PA to Indonesia). Most of the folks I've seen laid off
in the technical fields are pursuing other careers now. My brother for one
went over a year with out even an interview. He got his CDL and is driving
a school bus now (lucky basturd gets a company car and goes home for lunch
and gets snow days off). He doesn't make near the money he use to.
2) We temporarily lost a guy due to illness. He was out for a couple
months. By the time we found a contractor to sub in, he was back. There
aren't as many guys out there looking for work in this field.
3) The guys who I run into are in their late 40's, at least. No new young
guns.
4) I see a lot of labor force being taken by new immigrants. Now hear me
out on this first. I don't live in a "boarder town". I'm in the middle of
Pennsylvanian Dutch Country. There's a bunch of folks from South America
and Asia taking jobs that were traditionally held by Amish, because their
cost of living is so low the Amish held these jobs cheap. I don't begrudge
immigrants coming to the land opportunity, but, they seem to be doing a
disservice to themselves and previously establish cultures by working so
cheap.
5) I see what the statistics are calling cost of living increase and I
don't agree. Sure interest rates are down, but, there are more things you
"need to have" to maintain an expected life style, i.e. cable or dish TV,
cell phone, ISP. Sure I have health insurance, but the co-pay, employee
contribution keep going up and the insurers acceptable coverage is going
down. Need I go on?
6) I'm being continually told that I'm at the top of my pay scale. A pay
scale that has a buying power in today's market is less that my buying
power 5 to 10 years ago. Sure, going back to school is a option, but for
what? By the time I complete yet another degree part time, will it be
useful for a guy in his 60's competing with new grads in their 20's.
Getting off my soap box. Boy it felt good to get that off my chest.
Somebody give me some good news. I need a shot of positive information.
Allen Maddox
Sr. PC Board Designer
GAI-Tronics, Corp
610-796-5854
PO Box 1060
Reading, PA 19607-1060
[log in to unmask]
www.gai-tronics.com
>>> [log in to unmask] 03/31/04 03:57PM >>>
My $0.02:
I think outsourcing is inevitable. Tech jobs are no different than tennis
shoes as far as outsourcing goes. As a spender, you try to get the best
bang for your buck.
If the 'intangibles' (quality, customer satisfaction, etc.) drive the
bottom line down, you won't outsource for long; the job will come back
in-house. But if a beancounter can show that 5% of the customer base will
go away because they aren't happy speaking to a service rep with an accent,
but that overall profits will increase anyway, I'm guessing most companies
will choose to maximize profits. (If the average company is that concerned
with customer satisfaction, how did these automated phone systems ever make
it into virtually every business in America? Press 1 to answer...)
Anyway, I agree that some jobs will come back. But they may go away again
later as the out-source learns how to deal with the issues that lost them
the business. It'll be interesting (like a wreck on the highway is
interesting) to see which jobs ultimately show a better pay-off staying
in-house and which don't.
Some jobs may cycle back and forth forever. Having worked in Big Automotive
for the last 20+ years, you see cycles and fads. Matrix management.
Centralize, De-centralize, Re-centralize. These guys need to be near the
customer - they need to be near the factory - need to be near R&D.... It's
just that now the globe is the gameboard instead of the U.S.
If you want something (your job) to stay in-house, find a way to quantify
the cost of outsourcing-related communication problems, which is what most
tech outsourcing problems boil down to, one way or another. Demonstrate why
outsourcing will actually drive the bottom line down, not up. Be prepared
to make your case repeatedly (every time somebody different comes in
anywhere above you in the food chain). Hope that the inevitable test cases
prove you right.
I do think the best way to survive long-term is to become part of the new
process, which will include more and more outsourcing. Someone has to tell
them what we want and see if we got what we wanted., etc.....
It's all about the money.
-Chris (el CID)
"Brooks,Bill"
<[log in to unmask]> To:
[log in to unmask]
Sent by: DesignerCouncil cc:
<[log in to unmask]> Subject: Re:
[DC] tech jobs overseas...
03/31/2004 12:42 PM
Please respond to
"(Designers Council
Forum)"; Please respond to
"Brooks,Bill"
**********************************************************************
This email and any files transmitted with it are confidential and intended
solely for the use of the individual or entity to whom they are addressed.
If you have received this email in error please notify the system manager.
This footnote also confirms that this email message has been swept for the
presence of computer viruses.
www.hubbell.com - Hubbell Incorporated
**********************************************************************
----------------------------------------------------------------------------
-----
DesignerCouncil Mail List provided as a free service by IPC using LISTSERV
1.8d To unsubscribe, send a message to [log in to unmask] with following text
in the BODY (NOT the subject field): SIGNOFF DesignerCouncil.
To set a vacation stop for delivery of DesignerCouncil send: SET
DesignerCouncil NOMAIL Search previous postings at: www.ipc.org > On-Line
Resources & Databases > E-mail Archives Please visit IPC web site
http://www.ipc.org/contentpage.asp?Pageid=4.3.16
for additional information, or contact Keach Sasamori at [log in to unmask] or
847-509-9700 ext.5315
----------------------------------------------------------------------------
-----
"This e-mail message is intended only for the use of the intended
recipient(s).
The information contained therein may be confidential or privileged, and
its disclosure or reproduction is strictly prohibited.
If you are not the intended recipient, please return it immediately to its
sender at the above address and destroy it."
----------------------------------------------------------------------------
-----
DesignerCouncil Mail List provided as a free service by IPC using LISTSERV
1.8d To unsubscribe, send a message to [log in to unmask] with following text
in the BODY (NOT the subject field): SIGNOFF DesignerCouncil.
To set a vacation stop for delivery of DesignerCouncil send: SET
DesignerCouncil NOMAIL Search previous postings at: www.ipc.org > On-Line
Resources & Databases > E-mail Archives Please visit IPC web site
http://www.ipc.org/contentpage.asp?Pageid=4.3.16
for additional information, or contact Keach Sasamori at [log in to unmask] or
847-509-9700 ext.5315
----------------------------------------------------------------------------
-----
----------------------------------------------------------------------------
-----
DesignerCouncil Mail List provided as a free service by IPC using LISTSERV
1.8d To unsubscribe, send a message to [log in to unmask] with following text
in the BODY (NOT the subject field): SIGNOFF DesignerCouncil.
To set a vacation stop for delivery of DesignerCouncil send: SET
DesignerCouncil NOMAIL Search previous postings at: www.ipc.org > On-Line
Resources & Databases > E-mail Archives Please visit IPC web site
http://www.ipc.org/contentpage.asp?Pageid=4.3.16 for additional
information, or contact Keach Sasamori at [log in to unmask] or 847-509-9700
ext.5315
----------------------------------------------------------------------------
-----
----------------------------------------------------------------------------
-----
DesignerCouncil Mail List provided as a free service by IPC using LISTSERV
1.8d
To unsubscribe, send a message to [log in to unmask] with following text in
the BODY (NOT the subject field): SIGNOFF DesignerCouncil.
To set a vacation stop for delivery of DesignerCouncil send: SET
DesignerCouncil NOMAIL
Search previous postings at: www.ipc.org > On-Line Resources & Databases >
E-mail Archives
Please visit IPC web site http://www.ipc.org/contentpage.asp?Pageid=4.3.16
for additional information, or contact Keach Sasamori at [log in to unmask] or
847-509-9700 ext.5315
----------------------------------------------------------------------------
-----
"This e-mail message is intended only for the use of the intended
recipient(s).
The information contained therein may be confidential or privileged, and
its disclosure or reproduction is strictly prohibited.
If you are not the intended recipient, please return it immediately to its
sender at the above address and destroy it."
----------------------------------------------------------------------------
-----
DesignerCouncil Mail List provided as a free service by IPC using LISTSERV
1.8d
To unsubscribe, send a message to [log in to unmask] with following text in
the BODY (NOT the subject field): SIGNOFF DesignerCouncil.
To set a vacation stop for delivery of DesignerCouncil send: SET
DesignerCouncil NOMAIL
Search previous postings at: www.ipc.org > On-Line Resources & Databases >
E-mail Archives
Please visit IPC web site http://www.ipc.org/contentpage.asp?Pageid=4.3.16
for additional information, or contact Keach Sasamori at [log in to unmask] or
847-509-9700 ext.5315
----------------------------------------------------------------------------
-----
---------------------------------------------------------------------------------
DesignerCouncil Mail List provided as a free service by IPC using LISTSERV 1.8d
To unsubscribe, send a message to [log in to unmask] with following text in
the BODY (NOT the subject field): SIGNOFF DesignerCouncil.
To set a vacation stop for delivery of DesignerCouncil send: SET DesignerCouncil NOMAIL
Search previous postings at: www.ipc.org > On-Line Resources & Databases > E-mail Archives
Please visit IPC web site http://www.ipc.org/contentpage.asp?Pageid=4.3.16 for additional information, or contact Keach Sasamori at [log in to unmask] or 847-509-9700 ext.5315
---------------------------------------------------------------------------------
|
