Outsourcing of Jobs.... Discuss!

[Jesse MS3GT]

Or why people believe that outsourcing jobs is taking away from the US economy...those is some crazy people...

I can personally attest to that. I am not crazy thank you... My company built a plant in Mexico a couple years ago, and it didnt just include the grunt work, they also have outsourced my job as well. Just wait until it affects you, you will speak a different tune.

[JustROLLIN]

I can personally attest to that. I am not crazy thank you... My company built a plant in Mexico a couple years ago, and it didnt just include the grunt work, they also have outsourced my job as well. Just wait until it affects you, you will speak a different tune.

Ah yes, another one of many. It does effect short-term employment, but it actually brings more jobs to the US and helps the economy in the long run.

[mndsm]

Well, outsourcing may not affect jobs, but in the case of the gov't it DOES have an effect. I can tell you that an unnamed hospital in the area has outsourced its entire billing claims dept. They have not been able to get anything right in over two years. We recentlly denied a VERY large sum of money to this place because of these artards. Who foots the bill? You and me, with our higher taxes. And higher medical costs.

[JustROLLIN]

I am sure there are all sorts of individual cases where it does not work out properly, just like any generalization. But, for the most part, outsourcing of jobs actually increases our productivity and output, in turn boosting our economy.

[JustROLLIN]

One other note, I am not claiming it doesn't hurt an individual or individuals when jobs are outsourced. But, I am merely claiming that it actually helps stregthen the US economy as a WHOLE in the long run.

[mndsm]

One other note, I am not claiming it doesn't hurt an individual or individuals when jobs are outsourced. But, I am merely claiming that it actually helps stregthen the US economy as a WHOLE in the long run.

How does that work?

Really- i'd like info on how this works. Seems somewhat counterproductive to give money to another country to do a job, especially when we know the money isn't coming back (IE the salary of outsourced IT staying in India.)

[AJ]

One other note, I am not claiming it doesn't hurt an individual or individuals when jobs are outsourced. But, I am merely claiming that it actually helps stregthen the US economy as a WHOLE in the long run.

We need an on topic discussion on this one, cause I don't agree. It bolsters profitabily for the company and generally effects thos in the upper management of the company. But as we lose US taxable and spendable income, we don't get the same return in forgein nationals spending their new source of income on US imported goods. I don't think it's a complete wash, but I do not see where the long run impact is positive.

[JustROLLIN]

How does that work?

Really- i'd like info on how this works. Seems somewhat counterproductive to give money to another country to do a job, especially when we know the money isn't coming back (IE the salary of outsourced IT staying in India.)

Its based on a number of different Macroeconomic principles, but the main principle is called specialization. Basically, if another country can produce a product at a lower cost, or in a more efficient manner, we should let them produce it. For example, if country A can produce stereos for a lower cost than country B, but country B can produce computers for a lower cost than contry A, then country B should outsource its production of stereos to country A. By outsourcing stereos, country B can now produce more computers where it has the competitive advantage. In turn, we will be able to sell the additional computers, or even trade computers for stereos. At the end of the day, we will have a larger number of products due to the higher efficiency of production we have achieved.

Bottom Line: the country that produces the product most efficiently, should.

[mndsm]

That's flawed. Let's say that China builds 10,000 stereos. Sure we SELL the stereos to US based clients, but a chunk of the profits from the stereo sale is going back to china, as well as the labor to MAKE the stereos being in china, where our workers are not getting the job to make the money to buy the stereo. Sure, at upper levels it make sense, because the more they cut costs, the more they can buy Bentleys, but instead of putting the rest of the money in the hands of US citizens, we're putting it in the hands of the Chinese. Great if you're a rich corporate guy, not so great if you're a blue collar like the rest of us.

[JustROLLIN]

That's flawed. Let's say that China builds 10,000 stereos. Sure we SELL the stereos to US based clients, but a chunk of the profits from the stereo sale is going back to china, as well as the labor to MAKE the stereos being in china, where our workers are not getting the job to make the money to buy the stereo. Sure, at upper levels it make sense, because the more they cut costs, the more they can buy Bentleys, but instead of putting the rest of the money in the hands of US citizens, we're putting it in the hands of the Chinese. Great if you're a rich corporate guy, not so great if you're a blue collar like the rest of us.

Yeah, but country B will need addtional workers to produce the additional computers, putting the money back into the hands of country B.

[mndsm]

That's great for country B, who is getting all the money from the workers, not so great for country A, where all the workers are now on welfare and doing shit like naming their kids Nquaviun.

[JustROLLIN]

Whats not great about it for country A? They are receiving addtional jobs and addtional wealth for their country to help raise their standard of living. I am not debating the ethics behind outsourcing jobs, I am merely stating that it improves the US economy as a whole in the long term.

[Workdawg]

For both countries in your example to benefit, wouldn't both have to be getting increased jobs in separate fields?

A gets more jobs producing stereos, B gets more jobs producing computers. It is better for everyone.

What about in the situation where a job from A is outsourced to B, but B doesn't outsource any other job to country A. Now country B is doing fine, but country A gains nothing from it.

[mndsm]

Dan makes a good example. And while country A needing to sell more stereos is great, that is very rarely executed in practice.

[ZoomZoom Diva]

The big assumption is that we have a comparative advantage in enough areas with big enough demand to employ our workforce. Also, it is assumed the workforce is flexible and mobile enough to take advantage of the opportunites created by free trade. This is where textbook macroeconomics has not necessarily been reality.

The restrictive trade policies China has towards our potential exports to them also skews the comparative advantage equation. All sides must have equally open trade laws for this to work.

[JustROLLIN]

The big assumption is that we have a comparative advantage in enough areas with big enough demand to employ our workforce. Also, it is assumed the workforce is flexible and mobile enough to take advantage of the opportunites created by free trade. This is where textbook macroeconomics has not necessarily been reality.

The restrictive trade policies China has towards our potential exports to them also skews the comparative advantage equation. All sides must have equally open trade laws for this to work.

Thats a valid point. But, its highly unlikely that a country as educated and full of resources as the US would ever hit a point where we dont have a comparative advantage in a multitude of fields.

[ZoomZoom Diva]

Thats a valid point. But, its highly unlikely that a country as educated and full of resources as the US would ever hit a point where we dont have a comparative advantage in a multitude of fields.

I am inclined to agree with you as well. The concern I have is the flexibility of our population to retrain and relocate as needed to utilize those advantages. I am also concerned that we are being taken advantage of for having free trade policies that are less restrictive than many of our trading partners. I am a believer in free trade, but it must be free on both sides.

[JustROLLIN]

I am inclined to agree with you as well. The concern I have is the flexibility of our population to retrain and relocate as needed to utilize those advantages. I am also concerned that we are being taken advantage of for having free trade policies that are less restrictive than many of our trading partners. I am a believer in free trade, but it must be free on both sides.

I agree completely, sort of. I definitely think we are being rolled over via our trade policy. Its rediculous that we continue to trade with those countries that "do no play fair" with little to no consequence (tariff, etc). As for the flexibility of our workforce, we have already proven how flexibile we can be, IMO. As we continue to outsource more and more work, the people continue to adapt to the workplace.

[Jesse MS3GT]

This reminds me of how consumers think it is good that everything we buy is made in China. "They pay the Chinese low wages, we get our cheap products. We win!" Yeah but if you have no job to buy the Chinese made goods, what use is it to you in the end?

That has been going on for how long now, and whos economy is consuming ours? Chinas. Because they are getting OUR money by selling us their goods and they are taking our jobs along with our money.

If your "individuals" do not have a source of income, they cannot buy US goods and services to help the US economy. Outsourcing and buying too many foreign goods, no matter how cheap it is for the US consumer, is bad for our economy. The rich white men don't care as long as their corporations are making more profits. Its win win for the companies, not American citizens.

Same with this tax refund BS. I am pretty republican and very conservative on many issues but this tax refunds make little sense. Most Americans will use that money to buy Chinese made goods(electronics perhaps) when they should use that money to pay off their own personal debt, or at least spend it on US goods and services.

[dmention7]

I have been kind of silent on this issue, because I can see it from both sides. Corporations are not charities. They exist to make money, not because some CEO wants to be kind and hand out jobs to his fellow countrymen. Sure a certain amount of ethics come into play, but at the end of the day if you have two otherwise equal workforces to choose from, and one force is willing to work for a lot less, then it's not very hard to figure out who is going to end up with the jobs.

There's no point in bemoaning the practice of outsourcing, because it's going to happen, and it's going to continue to happen as long as there are other countries with workers who are just as skilled as we are, but a lot more hungry for the jobs--as evidenced by the fact that they are willing to do them for much lower compensation.

The solution is not going to involve asking companies to forgo a chance to lower costs and raise profits, but by giving them a reason to choose american workers over foreign workers. That largely means staying a step ahead of the rest of the world in education (but we have some catching up to do before we can even think about getting ahead)

This is a mazda forum; we all obviously chose our japanese cars over american cars for a reason, so we all obviously understand the basic principles at play here. It's a global economy and the walls that compartmentalize countries are falling down quickly, causing the playing field to be leveled. It just so happens that we have been used to living on the high end of that field.

[JustROLLIN]

This reminds me of how consumers think it is good that everything we buy is made in China. "They pay the Chinese low wages, we get our cheap products. We win!" Yeah but if you have no job to buy the Chinese made goods, what use is it to you in the end?

That has been going on for how long now, and whos economy is consuming ours? Chinas. Because they are getting OUR money by selling us their goods and they are taking our jobs along with our money.

If your "individuals" do not have a source of income, they cannot buy US goods and services to help the US economy. Outsourcing and buying too many foreign goods, no matter how cheap it is for the US consumer, is bad for our economy. The rich white men don't care as long as their corporations are making more profits. Its win win for the companies, not American citizens.


Have you seen the unemployment rate lately? While the UR is not a perfect figure, by any means, it does give us a nice indicator as to where one major component of our economy stands. Last time I checked, we were right on point, about 5-6% unemployment. So, if we were really hurting due to these outsourced jobs, we would have a fluctuation in that rate, among other indicators.

I think Jay hit on a solid point though. The fact that companies who value the US worker will pay a premium for that labor. While I would imagine its a declining number, not too sure though, there are many companies willing to invest into the US worker and build their new factories here.

[Jesse MS3GT]

You cant judge an economy by the unemployment rate. You should gauge it by the strength of its middle class. The average American makes less and less every year, the average man is growing poorer while the corps grow richer. The unemployment rate isnt the gauge it used to be... When wee had a strong middle class that was the best way to measure the weakness in the economy. Now we have a stable AMOUNT of jobs, but those same jobs pay less and have less benefits.

[Big Nate]

Let me just say this not to get off topic. The top 50% of wage earners pay (about) 92% of all the taxes. I would bet that those jobs are not leaving do to out-sourcing.

And I’m out.

Nate:)

[ZoomZoom Diva]

Jesse, the strength of the middle class is also an aggregate of personal decisions made by the people. The issue is not that decent pay and benefits are not available, but that a higher level of skill and education is needed to attain those better jobs. People need to realize that they need to increase their value in the labor marketplace to actually earn more money than merely expect to be paid more for doing the exact same thing.

[dmention7]

^^^ +1000

[Big Nate]

There are far too many people in the US who think they are entitled to a good paying job. Like James said you need to make yourself more valuable with school or training.

[mazdamn02]

There are far too many people in the US who think they are entitled to a good paying job. Like James said you need to make yourself more valuable with school or training.

Amen end of thread.

[ij1889]

i just wanted to say something about the country a and b analogy, what is the usa now and days producing and mass exporting?

[Big Nate]

i just wanted to say something about the country a and b analogy, what is the usa now and days producing and mass exporting?

MONEY and don't laugh it the truth.

[dmention7]

Jobs. Which I guess is the same thing in the end.

[ij1889]

good points, but see we are only giving and not receiving, at some point we need to change that to were we give and also receive

[mazdamn02]

good points, but see we are only giving and not receiving, at some point we need to change that to were we give and also receive

Fail. We are receiving, in terms of services and goods though.

Could you be trying to refer to the fact that we don't export anything?

[ij1889]

by receiving i ment no money from anyone or jobs

[dmention7]

Wait, so we're just kinda sending out ships full of stuff for free??? Well, I guess that would explain why the economy sucks. Silly companies should really start sending out invoices and stuff.

[mazdamn02]

Walter Sobchak: Were you listening to The Dude's story, Donny?
The Dude: Walter...
Donny: What?
Walter Sobchak: Were you listening to The Dude's story?
Donny: I was bowling.
Walter Sobchak: So you have no frame of reference here, Donny. You're like a child who wanders into the middle of a movie and wants to know...
The Dude: (interrupting) Walter, Walter, what's the point, man?
Walter Sobchak: There's no reason - here's my point, dude, there's no fucking reason why these two...
Donny: Yeah, Walter, what's your point?

srsly.

[dmention7]

ROFL.

[ZoomZoom Diva]

Could you be trying to refer to the fact that we don't export anything?
We don't export enough to offset what we import, which is due at least in part to our trading partners having stricter trade restrictions than we do.

[JustROLLIN]

I do agree that our trade deficit is an issue. But, the deficit is cyclical in a way. When our currency is highly valued, we will export less goods due to the higher cost. But, as we import goods and the value of the dollar falls, countries will start to import OUR goods as they become less and less expensive.

So, right now for example, we have a very low value on the dollar. This will actually help US companies, as outside countries will import our lower cost goods.

[upgtx]

So, right now for example, we have a very low value on the dollar. This will actually help US companies, as outside countries will import our lower cost goods.


Unless they can get a product from somewhere else for cheaper. Which is the case for most things. As it turns out, one of the biggest importers of US shit (Japan) are negotiating more and more trade with Chinese companies. So... yeah, the US economy sucks balls right now, and is not going to improve for a while.

[ZoomZoom Diva]

upgtx, the whole point is there are things China has an advantage over us and things where we have an advantage over China. Let China do the things they can do better and concentrate on the things we can do better.

[upgtx]

What can we make for cheaper/better than china, besides weapons/planes?

[mazdamn02]

This thread has turned in to a useless catapult of worthless generalizations and assumptions... Where can I click ignore...?

Let's get some real facts and numbers up here with sources...

[JustROLLIN]

This thread has turned in to a useless catapult of worthless generalizations and assumptions... Where can I click ignore...?

Let's get some real facts and numbers up here with sources...

How is it useless... I can post direct quotes from a MacroEcon textbook if thats what you are looking for?

[mazdamn02]

What can we make for cheaper/better than china, besides weapons/planes?

I'm referring to stuff like above...

[upgtx]

That was my point a few posts ago; you are just going to get generalizations.

[JustROLLIN]

Well its not all generalizations.... There are a number of products that we produce that other countries are after.... A couple major ones come to mind: Steel, Produce, Grain, and other commodities....