Yup and Nero is warming up that fiddle.
Bob Wolfe
----- Original Message -----
From: <[log in to unmask]>
To: <[log in to unmask]>
Sent: Thursday, April 01, 2004 1:43 PM
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"
>
>
>
>
>
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