Outsourcing Jobs

[Lemonaide]

Okay, the news is that many companies are outsourcing via telecommunications and firing thousands of locals. I thought I had a unique experience, but it seems it's becoming the way things go. Here's what happened: about four or five years ago, a check I presented to a local grocery store bounced back. I was upset, but went to the store and paid them cash and then we cleared things up. I went home and a while later, I received a letter stating that the matter was still pending. I called the number listed to correct everything and a man with a heavy accent answered. First I thought: oh, good, they're hiring guys from ____ wherever____ I think it's good to hire people from other countries to work on the company grounds. But as our conversations went along, I realized that we didn't understand each other's basic ways of doing things. So finally I said "where are you?" and he said "xyz" I screamed.... "XYZ! you're kidding me, how can you realize what we're talking about, like you don't have any papers in front of you that tell you anything". He replied: 'well it's on the computer!". I didn't faint and I didnt' want to scream at him, so I went through everything again on the phone. Then I realized the other part: some outsourcing companies really DO understand that our money is being drained away and they do not want to 'help' out, so they wanted me to send more money [to keep I suppose]. Then I ran to the grocery story and cleared things up, and then I called back and we finally straightened things out.

That's the real problem. It's not the country, it's not the ethnic thing, it's 'How can we be sure that the outsourcing agent is honest?" It's much easier to corrupt a system from afar.

Then fast-forward to much later..... 2008.... campaign issues and answers. One state is seeing that their employees are being laid off, they're being forced to train their replacements and their replacements are from xyz. What can government do to stem the flow and keep things honest? Here's an answer and it may work: Corporations that hire people that work 'on soil' will still be eligible for tax-breaks and tax-incentives; however, if the person is working from their own native soil and is functioning on a telephone, the tax breaks are null and voil".

Here's another issue: did you know that Corporations are hiring ex-convicts at a rapid pace in order to secure Tax-Incentives?

This is why I can't seem to find a job longer than temporary work. I don't want to take anything away from anyone, but what can I do to fit into the newest Corporate Landscape?

Your input is highly respected.

[noodle]

it has been studied over and over and the result is the same: it is extremely rare that offshore outsourcing actually saves money. it might be cheaper up front when you look at salaries, but other factors come in and it makes it at least equally as expensive.

however, since a lot of companies only care about the short-term forseeable bottom line, it is a popular practice.

[Slim]

This is why I can't seem to find a job longer than temporary work. I don't want to take anything away from anyone, but what can I do to fit into the newest Corporate Landscape?

Your input is highly respected.

Find a marketable skill. You're skills are only worth what someone is willing to pay you for them.

Face it, it's a global economy.

[CadetVet]

it has been studied over and over and the result is the same: it is extremely rare that offshore outsourcing actually saves money. it might be cheaper up front when you look at salaries, but other factors come in and it makes it at least equally as expensive.

however, since a lot of companies only care about the short-term forseeable bottom line, it is a popular practice.

There is a very important point missed here: it isn't just "cheaper" up front in salaries - but a whole host of other obligations - pension, health care, workers compensation expenses, etc., disappear when a position is outsourced. That is a sizable, but never mentioned, affect on the cost basis of the processes outsourced.

Why is it never mentioned? Because it could very well prove problematic if it was "discovered" that companies outsourced to get rid of obligations to workers - particularly older ones - in protected classes. So, with a wink and a nod, companies go on and outsource, workers loose their jobs, and life goes on. I've always wished that someone would try an age discrimination suit against one of these companies - just to see what gets dug up.

Usually one doubles or triples the salary of a domestic worker to determine the fully-loaded cost. That doesn't happen when the job is outsourced. Although budgets are usually underestimated, the actual savings are far more significant than usually expressed - because of these reduced employee load costs.

An aside - I had to laugh today at this ad I heard for Chevy. It said "Show 'em your tough, buy an American brand." (paraphrased). An American brand - not an American car (like it used to be). Why? Because if I wanted to buy a car made here, an "American" car, I'd have to buy a Camry or Accord - the Malibu is probably made somewhere else.

[telkanuru]

My job can't be outsourced!

Grocery store clerks are the new power!

[fencerchica]

Find a marketable skill. You're skills are only worth what someone is willing to pay you for them.

Face it, it's a global economy.

Questions for you then.

• Are you okay with the United States' transformation into a service and debt-based economy, instead of a manufacturing one?
• Do you deny that our government has excessively eased outsourcing by means of the tax codes and tariff laws, as well as lax inspection standards?
• Do you disagree that the government should make regulatory changes to attempt to reverse this trend?
• Do you think that this switch away from manufacturing and towards service is one which is likely to help the US to remain a global power in the long run?

[I_luv_saber]

mah God, I wish I could rep you for that.

[Lemonaide]

Thanks for your input. It's a tough question to ask with any sensitivity. I really like having many different people from different backgrounds working together, but it is true that I do feel 'outsourced'.

Finding a marketable skill..... I have a masters degree and type 72 wpm. I need a better outlook, I need seed money and start over somewhere else I need color-forms,

but thanks everyone, we did out best to explain unplanned obsolescence. I think it's just part of the so-called 'old boy' system that everyone is going insane to get rid of through Obama. People have put their faith in him.

Carlyle Group - has anyone ever heard of this group of financiers out of washington dc? I have a friend who is a little paranoid of this group. When I talk to her, it's like reading The Crying of Lot 49 over again, however, if we push past the paranoia I think what she is saying is that this group has over manipulated the marketplace for so long that it's nearly as damaged as the levee system.

[erik_blank]

Questions for you then.

• Are you okay with the United States' transformation into a service and debt-based economy, instead of a manufacturing one?
• Do you deny that our government has excessively eased outsourcing by means of the tax codes and tariff laws, as well as lax inspection standards?
• Do you disagree that the government should make regulatory changes to attempt to reverse this trend?
• Do you think that this switch away from manufacturing and towards service is one which is likely to help the US to remain a global power in the long run?

Chica:

While this is a god try, I don't think that it will do any good. Here you are trying to confuse him wih the facts, while his mind is already made up. Slim seems to me to be one of the lucky few who know how the world 'actually' works, and from the sniping that he has done around the edges, he seems to be well invested in his opinions no matter how many times 'well intentioned' people have told him about counterdicting 'facts.'

Unfortunately it is people like this that have lead us into the 'world economy' and the mideast wars.

[Neinteen]

Find a marketable skill. You're skills are only worth what someone is willing to pay you for them.

Face it, it's a global economy.

Which is why I'm going to learn chinese and run a corporation

My job can't be outsourced!

Grocery store clerks are the new power!

<3 Outsourcing's going to get me a job!

[Lemonaide]

Huen-how! [insert mandarin character]

But in the meantime, the question of service versus manufacturing is a good point. We have moved away from manufacturing into service because the service industry is a money making, and also because of the supply-demand thing. I think so many people have pointed out in the past, that Americans tend to 'over consume', therefore, industry, taking their cue from the economic big-wigs, cut back on goods while moving more into 'professional' areas such as medicine, and education. As the government screeched so loudly about the lack of teachers especially in math and science, everyone moved into that area. We may have to consider the fact that we are going to go into a period of reconstruction and all areas will be affected. I think men have in the past ten years or so, made decisions to get out of the grunt work and move into other areas to make money. They just got tired of carrying heavy stuff around.
Deciding a career tract isn't easy and always a personal choice. The only thing to do is hang in there and wait for the water to dry up!

[Grimaldi]

Questions for you then.

• Are you okay with the United States' transformation into a service and debt-based economy, instead of a manufacturing one?
• Do you deny that our government has excessively eased outsourcing by means of the tax codes and tariff laws, as well as lax inspection standards?
• Do you disagree that the government should make regulatory changes to attempt to reverse this trend?
• Do you think that this switch away from manufacturing and towards service is one which is likely to help the US to remain a global power in the long run?

US unemployment rates are still pretty low, so I don't foresee a huge problem with this. Employment rates have stayed pretty steady for the last several years, and the average wealth of US citizens has consistently grown over that time (with US citizen wealth and income consistently high compared to other industrialized nations). So where's the problem, or at least a problem so severe that it requires drastic Federal intervention?

From your post, I'm sure you must be in favor of drastic measures to stop illegal immigrants from finding employment in the US, too, as they cause the same problems....it's just "insourcing".

It's difficult to say what the correct course of action is. Cheap products like you find at Wal-Mart make people's income go further, and there are still higher quality domestic versions of most major goods, so people with higher income still have choices, too, which keeps advanced goods manufacturing jobs here. Is outsourcing telephone help and unskilled factory labor a real drain on the US economy? Are these the good paying, family-building jobs that everyone wants?

Slim seems to me to be one of the lucky few who know how the world 'actually' works, and from the sniping that he has done around the edges, he seems to be well invested in his opinions no matter how many times 'well intentioned' people have told him about counterdicting 'facts.'

Unfortunately it is people like this that have lead us into the 'world economy' and the mideast wars

Wow...smug much? So, do you change your opinion with every argument that you read, or are you one of those lucky few that knows how the world actually works? Just because you can't convince someone with your arguments doesn't mean they are closed-minded bigots.

And what kind of people have led us into a "world economy"? Why is it bad to spread wealth and opportunity across the globe? If you recall, the industrialization of most nations was a long and painful process...it's painful for the countries going through it now, with the help of the global economy, but in the end they will be much more prosperous than before.

[fencerchica]

US unemployment rates are still pretty low, so I don't foresee a huge problem with this.

What kind of employment are we talking about here? If all employment is counted equally, as you seem to be doing, it doesn't matter if Joe Schmo loses his assembly line job in Detroit and takes a job with Wal-Mart at the minimum wage. Hey, he's still employed! However, he's been switched from manufacturing to service, and there are consequences that fall out of this, not only to him in terms of less stability and lower pay, but also to the greater economy. What is it going to mean, as we cease to make anything ourselves but only provide services to one another? The only silver lining of the collapsing dollar (as long as it doesn't go too low -- cross your fingers that OPEC doesn't peg oil to the Euro instead of the dollar) is that it may lure manufacturing back into the US as our exports become more lucrative to other countries.

Employment rates have stayed pretty steady for the last several years

I have a hard time believing this. I know the US Bureau of Labor Statistics has been showing a decline in employment vs population since at least fall 2007.

and the average wealth of US citizens has consistently grown over that time

The average is a dangerous statistic. If Cindy McCain, myself, and eight of my peers (junior engineers) stand in a room together, the average wealth of the US citizens in that room is going to be roughly ten million dollars. But before we kids start celebrating, that's because Cindy McCain is worth at least $100 million, and the difference between the mean wealth and the median wealth in that room (which is what you should be looking at) is going to be a factor of something in the area of 168. To the degree that the average wealth of US citizens may have been growing over whatever time you may have looked it, I strongly suspect these gains have been made among households in the 95th percentile or higher.

From your post, I'm sure you must be in favor of drastic measures to stop illegal immigrants from finding employment in the US, too, as they cause the same problems....it's just "insourcing".

Way to bring in the political red herring. Citizen X: "I'm worried that all of our manufacturing jobs are being outsourced overseas." Neoconservative: "Uh... look over there! It's an illegal immigrant crossing the border while having an abortion in order to hug a tree and get gay-married!" Immigration doesn't hold a candle to our economic, fiscal, and trade policies with regards to the loss of manufacturing jobs in this country. Certainly during the nineteenth and twentieth centuries we had a fairly high volume of immigration while simultaneously having a thriving manufacturing sector. Most of the jobs illegal immigrants are taking are service jobs anyway, especially now that the housing bust has put a damper on new home construction.

It's difficult to say what the correct course of action is. Cheap products like you find at Wal-Mart make people's income go further, and there are still higher quality domestic versions of most major goods, so people with higher income still have choices, too, which keeps advanced goods manufacturing jobs here.

The Wal-Mart phenomenon is such an awful trap... Sure, you can buy cheap products there, and when you're constrained by your employment situation and your finances, sometimes there simply isn't an alternative. But the act of buying these cheap imports that squeeze out American-made goods serves to help perpetuate the cycle. It's a nice scam they've got going, where people wind up with no choice but to be complicit in the same phenomena that is costing them their livelihood. I don't know where you go to find domestic versions of most major goods available at all, let alone available at a price a middle class person can afford to pay across the board; you'll have to fill me in.

Is outsourcing telephone help and unskilled factory labor a real drain on the US economy? Are these the good paying, family-building jobs that everyone wants?

I bet you'd have fun taking a walk through Bethlehem PA and saying that line. Not all manufacturing work is unskilled. But you never did answer my questions (granted, I was aiming them at Slim) about what the big-picture consequences of shifting away from a manufacturing based, industrial economy will be. We're not just a service based economy now, either; we're a debt-based economy. I think we're starting to see some of the consequences of that now, but it's not the housing crisis that worries me the most. What has me really worried is what's going to happen when OPEC inevitably unpegs oil from the dollar and switches it to the Euro.

[dcmdale]

US unemployment rates are still pretty low, so I don't foresee a huge problem with this. Employment rates have stayed pretty steady for the last several years, and the average wealth of US citizens has consistently grown over that time (with US citizen wealth and income consistently high compared to other industrialized nations). So where's the problem, or at least a problem so severe that it requires drastic Federal intervention?

Grimaldi... what's your source for all this? That's a real question because I haven't gone back to the actual economic data; however, a quick web search would seem to indicate that while employment rates are in the historically "reasonable" level, wages relative to inflation have been declining since 2000 and the U.S. has been falling in many standard of living rankings. More alarming to me is the level of trade imbalance and the debt load that Americans are carrying which may point to issues with the sustainability of the economy.

Is outsourcing telephone help and unskilled factory labor a real drain on the US economy? Are these the good paying, family-building jobs that everyone wants?

These may not be the most desirable jobs, but they are an important part of the economy. Not everybody is suited to "more productive" jobs. I have worked the assembly lines in the past and, frankly, for many of the people I worked with, factory work is about the best that they will ever achieve. Unfortunately, not everybody is above average. I would rather have them working on an assembly line than sitting on a couch watching Oprah and collecting welfare.

However, the outsourcing/off-shoring issue didn't really pick up steam until it started hitting things like $125K/year IT jobs. We aren't really talking about "bad" jobs anymore.

One of the interesting things about this discussion is that fencerchica's post could easily have been written by any arch-conservative from an earlier generation. Things like this have a tendency to flip between "liberal" and "conservative" over time.

Does this mean that the government should intervene? In general, I have a very high opinion of the strength of a free market economy. However, there are a couple of concerns that might tip me:

1. I am not convinced that the international playing field is truly level. Cultural and legal differences can make a big difference in how a market economy works. If the marketplace isn't level, the value will tend to run to the lowest parts. An example that I have seen played out many times in the last couple of years: two vendors, one American, one Indian, are after the same contract. The American company bids based on the cost to fulfill the contract. The Indian company bids based on what it takes to win the contract with the expectation that the shortfall will be worked out in the implementation--from an American perspective, they don't intend to fulfill the terms of the contract. The Indian firm wins the bid, but the company doesn't get the value contracted for. Chinese economic policies also fall in this same catagory. Like it or not companies live in a highly regulated world already with other countries working in their own national interests.
2. The SEC Act, while I understand its value, has a pernicious effect on decision making in American companies making them very focused on short-term gains rather than the best long term decisions. Point #1 is well known among the decision makers (at least in my experience), but they continue to make those decisions because they will get the benefit of "saving the company $100M" and will be gone before stuff hits the fan. They also know that the decision usually doesn't take into account harder-to-quantify costs such as loss of intellectual capital.

Here is a point where I think that national interest starts coming into play. Good economic sense says that dumb companies (companies with bad decision making policies) should be allowed to die. The human cost of that can be significant though.

[jeff]

excellent post. nicely reasoned and apropos

[piste off]

My job can't be outsourced!

Grocery store clerks are the new power!

Ah, the world of low-telk!

BTW - we (http://www.peapod.com/) just moved all our systems overseas...

Still need drivers until the robots come in, so you may want to start training on that.

R-

[dcmdale]

From today's NY Times:

The national unemployment rate climbed a full percentage point over the last year to 5.5 percent in May, according to the Labor Department. That does not include people who are jobless and have given up looking for work, or people who have been bumped to part-time jobs from full-time. Add in those people and the so-called underemployment rate rises to 9.7 percent, up from 8.3 percent in May 2007, according to the Labor Department.

[Slim]

Questions for you then.
[LIST][*]Are you okay with the United States' transformation into a service and debt-based economy, instead of a manufacturing one?

The standard of living in the US is too high compared to that of countries that compete for manufacturing jobs. People expect too much for what they do here. Most people who do this kind of work are low skilled, yet here in the US they expect to be paid wages that cant be justified in a world economy. Many manufacturing jobs should be outsourced. We need more home grown smart people to find new avenues of growth.

[*]Do you deny that our government has excessively eased outsourcing by means of the tax codes and tariff laws, as well as lax inspection standards?

Absolutely. Tax laws have driven companies out, and make it very hard for small businesses to get going. Unions have played a big part of this as well.

[*]Do you disagree that the government should make regulatory changes to attempt to reverse this trend?

What trend is this...that we cant compete? That is where we are going. How about a longer school day. How about incentives like free tuition for college students taking the "hard" majors like math, science and engineering....you know...skills that could actually benefit an economy.

Q. Why is it that the majority of graduate students in these areas are either foreign nationals or immigrants ?

A. Most American born kids are looking for the easy way out and feel entitled to a standard of living that is no longer achievable with the skills they have.

[*]Do you think that this switch away from manufacturing and towards service is one which is likely to help the US to remain a global power in the long run?

No I dont. But stop blaming government. If people want to take the easy way out and coast through high school and college, only acquiring enough skills to make a living by working in the service industry, then I guess we're in very tough shape if we're trying to remain a global power.

[telkanuru]

I... agree.

Wow, that was hard to say.

[fencerchica]

The standard of living in the US is too high compared to that of countries that compete for manufacturing jobs. People expect too much for what they do here. Most people who do this kind of work are low skilled, yet here in the US they expect to be paid wages that cant be justified in a world economy. Many manufacturing jobs should be outsourced. We need more home grown smart people to find new avenues of growth.

This movement towards partially homogenizing our economy is a liability in several ways. Being specialized to the point of being inextricably dependent on the global economy for anything requiring a healthy manufacturing base doesn't seem to be a good position to be occupying if the bottom drops out of the US dollar. Not all of our citizens necessarily have the potential to do well for themselves outside of a manufacturing economy, as dcmdale has already discussed. An economy split between high and low-end service (with menial service jobs at the low end and jobs in finance at the high end) and a few high-tech specialties is a breeding grounds for a highly binary class system, as we can already see from the accelerating divide between rich and poor in our country. Needing to import virtually all manufactured products results in a vast quantity of goods flowing into our ports, which makes adequate screening (for contamination, terrorist tampering, or other hazards) impossible. Dependency on imports and the need to be able to distribute them across the country from their points of entry also makes us more dependent on fossil fuels currently.

Absolutely. Tax laws have driven companies out, and make it very hard for small businesses to get going. Unions have played a big part of this as well.

Do you seriously think that granting China MFN status while they adjust the yuan to encourage the trading gap to widen had nothing to do with this? And then there's NAFTA. Even with our friends up north, we have a wide and growing trade gap.

How about a longer school day. How about incentives like free tuition for college students taking the "hard" majors like math, science and engineering....you know...skills that could actually benefit an economy.

A longer school day will only be useful if the schools are functional in the first place, which is not true in many parts of the country. That said, I agree with your proposals to provide economic assistance to college students majoring in science and engineering. This kind of government assistance doesn't sound like you though! Shouldn't we just sit back and let a pure and unregulated free market operate, come what may?? /sarcasm

Q. Why is it that the majority of graduate students in these areas are either foreign nationals or immigrants?
A. Most American born kids are looking for the easy way out and feel entitled to a standard of living that is no longer achievable with the skills they have.

From personal experience as well as from following the news, I find it hard to believe your allegation that the majority of science and engineering grad students are foreign. Where are you drawing this from? Let me tell you what's scary though. Until recently, immigrant students pursuing graduate degrees in the states have for the most part wanted to settle here permanently, adding to the "brain trust" in this country. That trend is slowing and may even be reversing, due to the unreasonable difficulty in obtaining visas (one of the reasons why comprehensive immigration reform is desperately needed). In addition, although the rate of foreign applications to our grad schools is on a mild upward trend, there was a drastic dropping off in the years right after 9/11 which has only barely been compensated for. To me this implies that the existing "brain trust" in this country could be in the process of losing the help it's been getting from abroad over the past several decades. Perhaps the "in" place to go for graduate study in, say, engineering in the 21st century may become, say, Japan or Germany instead of the US.

No I dont. But stop blaming government. If people want to take the easy way out and coast through high school and college, only acquiring enough skills to make a living by working in the service industry, then I guess we're in very tough shape if we're trying to remain a global power.

You seem to think the government's role has been as an inactive bystander whom I'm now demanding intervene. I don't see it that way. I am coming to think that the current form of the US economy is a product of the government's policies in tax and trade, tarriffs and subsidies. I see the government as having been in up to its neck in regulating and guiding the economy for a long time and that it's incumbent upon it to set about correcting the consequences of its poorly formed policies. Also, you don't seem to understand that the service industry includes more than manning the McDonald's drive-thru. The greater service sector also includes fields like banking, trading, finance management, fields where a high level of education and a commitment to hard work is necessary. However, you're still existing by providing services to one another and trading in a certain sense in intangibles as opposed to goods. Transformation into a service industry doesn't exclusively imply people "taking the easy way out". But we are not all above average, and part of a healthy economy is having adequate-paying and worthwhile productive labor available for the less intellectually gifted, instead of seeing them as an army of expendables.