Globalization Decimating US I.T. Jobs 1102
mrraven writes, "According to Ronald Reagan's former deputy secretary of the treasury in this
article in Counterpunch, globalization is destroying US I.T. jobs. From the article: 'During the past five years (January 01 – January 06), the information sector of the US economy lost 644,000 jobs, or 17.4 per cent of its work force. Computer systems design and related work lost 105,000 jobs, or 8.5 per cent of its work force. Clearly, jobs offshoring is not creating jobs in computers and information technology.'" Paul Craig Roberts quotes a number of formerly pro-globalization economists who are now seeing the light of the harrowing of the US middle class. It's not limited to I.T. Roberts quotes one recanting economist, Alan Blinder, as saying that 42–56 million American service-sector jobs are susceptible to offshoring.
Re:In more trouble than most realize... (Score:5, Interesting)
"Alcatel does not do the kind of research that Lucent has historically done at Bell Labs. Future projects at Bell Labs will need to focus on productization in a 5-year timeframe. This transition has already started."
Science and research for the sake of science and research is now officially dead at Bell Labs. If they can't turn it into something that can be sold within 5 years, shitcan it.
Globalization is Evil (Score:3, Interesting)
This may be the effect of the dot com boom ending (Score:5, Interesting)
Re:We're all guilty of this. (Score:4, Interesting)
Re:Boo Freaking Hoo (Score:3, Interesting)
We are competing with people who do not have 40 hour work weeks, do not have child labor laws, hell - some of them basically have slave labor.
They are willing to completely destroy their environment (we are talking black teeth from the amount of waste loose in the environment).
On top of this- they are willing to work for less.
I can see on a philosophical basis saying "okay they are less and that's tough nuts".
I can not see saying on that basis, "Okay so they work their children 15 hours a day and use prison labor from people thrown into prison on some very dubious causes".
So, I think we would be on a fair ethical basis to say, "Yup, you can use labor that charges
It is *EASY* to get a high paying job in IT (Score:2, Interesting)
I recently did a job search and had potential employers beating down my door, within a week of sending my resume out I had a half a dozen interviews lined up with well known companies that pay nicely. I know of noone in a different field who has been in a situation as good as that. The company I work for now is desperate to get more software engineers and cant find enough qualified people to fill even half of the open positions. So whenever I read an article like this about how "all the programmers are losing their jobs to the developing world" I cant help but think its just some journalists trying to scare people.
Maybe I'll be eating my words 10 years from now, but right now I am calling BS.
Don't be so parochial (Score:4, Interesting)
It's a fact of life, almost any job that doesn't require your physical presence is relocateable. If the cost of moving raw materials abroad and the finished product back is low enough, and the difference in the cost of doing business is high enough, then everything else being equal you will see job migration.
If you want security from relocation, be a computer-equipment-installation technician. If you want security from offshoring, find a job that is "outsource-proof" such as certain defense-industry jobs.
The biggest issue in my mind isn't offshoring because overseas engineers work for half of what Americans charge, but offshoring of any type because costs imposed by the "American standard of living" are significantly greater than the equivalent costs in countries with a much lower standard of living. As long as we insist on things like clean air, good police protection, something approaching a "living wage" for our lowest-paid workers, good health care, safe cars, good infrastructure, etc. etc. etc., then we will have higher costs to do business here than in countries whose citizens don't demand these things. In a country or region without such costs, the cost of living will be much lower and wages can be lower while still having employees feel well-compensated.
There are parts of America with a relatively low payroll burden on companies and with relatively low costs-of-living. If your big-city job were suddenly transferred to some rural area 2000 miles away where 2/3 of your salary could let you live in a house twice the size of your existing one, but with the nearest big city 3 hours away, would you take the transfer or would you start sending out your resume? How about if it was transferred 10,000 miles away and the salary was 1/3, but even after paying for a flat the same size as the one you have now, you'd still be able to bank a huge amount each month?
Look on the bright side - the world and it's nearby neighbors are a closed system as far as the job market is concerned - no jobs are going to Alpha Centauri Prime any time soon.
I am not a troll. Just a realist.
Re:Tech boom/bust? (Score:3, Interesting)
After 20 years, I got out of it. Know why? System administration has become the equivalent of computer operations. The new factory line worker, in many ways. I had no desire to get into programming - sorry, but it bores me to tears.
So I went back to school and got another, unrelated degree.
I'm curious to know if my case is unusual. I am guessing that it's not all that unusual. I've said it before in another thread that I really believe humans should experience more than one field in the course of their work years.
Re:In more trouble than most realize... (Score:5, Interesting)
Meanwhile, at Bell Labs, things have been business-focused for a very long time. Remember that Thompson, Richie et al. couldn't get funding to make a new O/S, they had to pretend they were writing a text processor instead [ualberta.ca].
Re:Hold on... (Score:3, Interesting)
Five years ago I realized that this tidal wave was coming, I went back to school part-time to learn computer programming and started earning my certifications while working in the video game industry. At first, it was hard to get classes because they were too many students. Now I can't get the last two advance classes I need to graduate since there are not enough students to run a class. A year ago I got a job with the IBM Help Desk that's been great since I'm making enough money to rent my own apartment while only working 40 hours a week. No more 60 to 80 hour work weeks for me!
Re:Oh poo! (Score:2, Interesting)
Your salaries may be lower, but you have universal health care. Add to that the fact that the value of the US dollar isn't much higher than the Canadian dollar anymore. Now add BC bud to the mix and Canadians are happily staying right where they are: on the sofa.
It's not the globalization. (Score:4, Interesting)
It's the high-cost of life in the US.
Speculators have worked very hard to keep land and house prices beyond the reasonable capacity of people to pay for them, hence overreliance on credit which increases the prices of the goods often by 100% (20 years at 5%).
In addition, the sprawling lifestyle puts an extra burden on governments who have to maintain an extensive networks of roads, in addition to the people who have to pay a fortune to acquire (also on credit) automobiles and run them.
It's not for nothing that third-worlders can live for a king for $10 per day; over there, people are not burdened by the expensive western lifestyle.
Automobiles are particularly to blame, because this is one expense that can be done without. When people will spend a third of their income to support their automobile, this means that with a proper public transportation system that allows ordinary people to live decently without a car, salaries could be cut by 25% without any diminished quality of life.
When this little fact will be understood by the thousands chambers of commerce, there will be serious moves toward better transit. In addition of lowering the expenses of employers, it will free the roads from millions of otherwise useless vehicles, leaving a free way for what cannot be transacted without a truck, thus cutting down on the time lost in traffic, furthering even more the savings.
Plus, when there are sufficient people using a transit system, they can be self-sufficient or even turn a profit and thus not be an eternal drain on public ressources like roads are (no right-wing wacko is talking about privatizing roads). 100 years ago, transit systems were big business, and railroads were the high-technology.
Re:In more trouble than most realize... (Score:5, Interesting)
1. Outsourcing is not new. And the reaction by the IT industry is not new. The garment industry was outsourced, the steel industry, to a degree the automotive industry. It happens. The people directly impacted don't like it but as long as it make economic sense, outsourcing will happen. Adapt to survive and thrive.
2. Isolated protective measures to limit outsourcing will ultimately fail. If you put restrictions on US companies that increase their costs while overseas competitors have no such restrictions, US companies will be at a competitive disadvantage ultimately hurting their growth and their employees.
3. Outsourcing is not easy in the IT industry. I can point to as many failures as successes. Not every company in the US that needs IT resources will be candidates for outsourcing. Not every job will end up overseas. In fact even though my entire IT organization is in India I'll soon be looking for a Systems Engineer in the US because I'm not happy with what I find in India.
4. Salaries for IT candidates in India are increasing very rapidly (think Silicon Valley, 1999). Given the inherent inefficiency of dealing with people great distances away, the economics of outsourcing are getting worse.
5. Decimation means to kill off 10%, not 90% as some posts have said. From Wikipedia: The word decimation is derived from Latin meaning "removal of a tenth." So the article is correct, this is decimation.
6. I could be wrong on any or all of the above.
RD Offsored Too. Everyone SOL. (Score:4, Interesting)
So, if we are supposed to rely on education, technology and research and development to keep our edge as a country, we are already in trouble, especially when one considers that even if we were to turn things around tomorrow, we have likely done enough damage that it will take a decade to recover.
Industrial recovery is not possible while we trade with non free China and your government/corporate masters have you screwed out for RD too.
GE, Microsoft and others have already started moving their research offshore. I'm talking about basic industrial research, like turbine design. "First World" Physics, no longer viable [theregister.co.uk], so forget it. Brains are cheaper, and theoretically free, in Russia and India. The situation is worse in China, where people really are not free.
Our trade was supposed to set the Chinese free, but it's working the other way around. It's just business, right? [slashdot.org], and China is just another big company. Not quite. Our big dumb companies might have you by the balls, read your email [theregister.com], and sell it all to big brother [essential.org], but they can't put you in jail yet. That will take another dissaster like NorthWoods [wikipedia.org] so that everyone is really paranoid and ready for rationing and a WW2 style command economy.
The only way out is lots of wealth creation to raise everyone's standard of living, but it's not happening. With all the mergers, wealth will continue to move to the already very rich owners of those companies. The mergers are the ultimate result of government favoritism of large companies. IT was supposed to be the poster child of new competition and robust US Performance. It has not happened because incumbent companies were allowed to crush new comers, so that "just enough" competition would be left. Now, we all sit under the M$ monopoly, two big media companies, two "broadband" companies, one electric company and a merged OPEC/ExxonMobileRoyalDoubleDutchFuck and wonder where the jobs are and why service sucks. If we can't help ourselves, we will never be able to help anyone else.
Eventually, this will get the rich too. A real depression is no fun for anyone, but those happen when wealth concentration reaches a critical level. When power is concentrated enough, the American Empire will go to war with China, kind of like the great Royal Fuck Festival that was the first World War.
Lawyers, too. (Score:3, Interesting)
Here's a list of offshore legal services [prismlegal.com]. Now you can have your legal work done in Bangalore. Pass a copy of this to your corporate counsel.
a view from the "third world" (Score:1, Interesting)
I live in argentina, and belong to the "middel class". I'm having a training course in UNIX basics so I can start working with an "american" (I fscking hate when people refer to the united states of (north) america as "america") corporation; a big one in IT. when I finish the course, I'll start working as a UNIX sysadmin trainee for US$500 (1500 pesos, that's a great salary for a 19 year old starter here. I could live on my own in a nice neighbourhood). There are a couple of other people in the course who actually understand what we are learning and have some experience in unix-like systems, the other will likely be "three month trained unix sysadmins", the crappy type. Too bad for the underqualified white northamericans who think that they should have "my" future job no matter what: this white qualified southamerican will get the job.
oviously, my country sucks in ways that america sucks less: there is no civic conciense among consumers, unions tend to be driven by political currents, and tech costs 50% more than in the "first world" because of ridiculous taxes. not to count that because our coin is around 3,14 pesos a dolar, tech costs something like 4 times that you pay (relatively speaking). you get a US$70 video card for US$170 here, for example.
I'm not trying to make a point here, that has been done. Just explainig a bit of how are thing in the "underdeveloped poor third world countries", which is not so mucho underdeveloped: we could use a nice IT infrastructure with one loaptop per child and free gov-sustained wifi and stuff like that, but it would give the people more knowledge (hence power) and the politicians less control over people (especially if people learn that they can cypher their data, for example). politicians here behave (and I suspect they also think) like if this were the country it was a century ago: an undeveloped third world country who's only ability was to produce food. Today we are developing and not all of the populations needs just food (only some 30 percent, because -again- our politicians are assholes as yours are).
just my two cents (this would be six cents here, that buys me a candy ^_^)
~ Kant
p.s.: I apologize for my crappy english, as you may have guessed it's not my mother language.
p.s. 2: I know the text is not properly written and doesn't seem to follow a line, but it's 3 AM here and I'm tired. anyway, someone will answer this saying that it's over the regular USA internetuser or something like that.
p.s. 3: I know that canada is also northamerica, sorry for putting you with the USA
Re:In more trouble than most realize... (Score:5, Interesting)
Re:In more trouble than most realize... (Score:5, Interesting)
A few years ago, I worked as a developer in a fairly large well-known tech company. The progression: Starting there, things were pretty good--well staffed, good morale, nice people to work with. The push for the "bottom line" started creeping in after a year or two on the job--secretaries got laid off, senior engineers got laid off, a website was set up for us to do our own expensing, travel, etc. It was hell. I, a well-trained software developer, getting paid pretty good money, was expected to deal with making travel arrangements, fighting with HR, etc. while my time was being billed to an engineering project. It isn't worth working for a company where my time and talent is simply not valued.
Re:Welcome to "rent seeking" (Score:3, Interesting)
Re:Boo Freaking Hoo (Score:3, Interesting)
Where are the jobs? (Score:3, Interesting)
According to Businessweek, most private sector jobs created in the 21st century have been in health care.
What's Really Propping Up The Economy [businessweek.com]
This is a remarkable trend. I don't know about the rest of you but I ain't none too excited about the prospects of a career in health care.
Re:Boo Freaking Hoo (Score:3, Interesting)
Have you ever been to China? Have you ever been involved with setting up a factory there? Let me explain the conditions in a typical semiconductor factory (which is what I am familiar with). The lighting is bright. The air (necessarily for the production) is clean and cool. There is an employee cafeteria with decent enough food that even I will eat it (though I don't know what the hell it is). Many, if not most, of the employees live in on-site dorms which hold a few guys per room. There are communal washing and cooking facilities. Some live off-site in sparse but new apartments. They usually live together to save money. You see, these people just came in from the countryside where they were living in much poorer conditions, and to them this is some really good money. They are generally quite happy, and the job market is very good (for them, not for the company - retention is a real problem). These are not slaves.
I'm not a business school type, I'm a mechanical engineer that has been through the very painful process of offshoring jobs, including those of my co-workers. It's no fun, and I wanted to quit more than a few times. I'm also sick of travel to Asia. But I consider myself a professional, and as long as I am treated professionally, business is business. I understand that my company probably would not have survived if it had kept manufacturing in the US.
First of all, that will not happen barring some huge disaster on par with the Great Depression. Even then, Brazil's problems largely lie with the vestiges of colonialism. The rich simply own the whole country. Brazil was never like the US, and so cannot serve as a warning to the US - there simply is no parallel. The US will almost certainly lose influence and power in the world. Do you really think that it's sustainable for a country with 300 million people to so completely dominate the global economy? I think that this loss of influence will come from a combination of decline in standard of living and the rising influence of the up-and-coming economies of the world.
Unfortunately for the Chavez supporters out there, those with real power rarely lose it. South America has a real problem - the rich own EVERYTHING... there is no middle class, because no meaningful property redistribution ever took place after colonialism became passe. Combine with nasty racism and stir. Actually, as crazy and irrational as Chavez is on the world stage, his ilk may actually help South America domestically if he can manage to keep the actual power holders in his country from deposing him.
The free trade policies of the west are making China and India into 1st world countries - not destroying the world. The world was fucked up prior to current trends in trade. The World Bank is culpable for giving some really bad advice out, but the west has forgiven a lot of the resulting debt from that debacle. But hey, everyone needs a scapegoat, and the west is the obvious choice if you are a third-world leader trying to deflect anger from your own incompetence. No one FORCED Venezuela to follow advice from the World Bank.
Re:In more trouble than most realize... (Score:3, Interesting)
Re:DUH! (Score:3, Interesting)
Arguably, there are just a few issues that are keeping the nominal price from dropping faster (all of which are interrelated):
a.) Real estate. There are many factors (some of which are only in play in certain regions of the US but not others.) Curiously, (fundamental) demand is not really one of them. The "wealthy" here may be blamed, but they are just current homeowners, and the high cost of real estate is transfer of wealth between generations (young people paying high rent prices to older folks who own real estate.)
b.) Taxes. Almost all of this can be attributed to government overpromises (large pensions given to local government employees that are no longer working out on paper) for instance. This is a complex issue with no easy solution. If I were to take a bet, the emerging nations will not follow the same path and make the same mistakes.
c.) Commodity prices, such as gasoline.
d.) Health care costs.
I hypothesize as an arm chair Economist (with an Econ degree, but what that means is up to debate) that if Real Estate prices took a sufficient drop and a more realistic realingment, then the drop in overall wages would be met with an equal drop in nominal pricing.
(There's a chance that that will occur.)
How ironic (Score:5, Interesting)
But guess what? Although I speak fluent german, I can't work in Germany or Austria. A company has to advertise for 3 months for an EU resident to fill a slot before they can sponsor a visa for me. And I'm not even picky--I can't find an IT/programming job for an american anywhere outside of the US from Cape Town to Kabul.
Want to bitch about globalization? Bitch about the last trade barrier: Labor. Globalization currently benefits CEO's because the resource they have to start the game, money, is now easily transfered. But labor isn't allowed to be transfered--labor might as well be opium for all the free trade associated with it, but with more positions available. I, for one, can't fucking wait until that shit ends, and I can whore myself out to whomever I please, wherever I please.
Re:In more trouble than most realize... (Score:5, Interesting)
I'm not sure you counterexample is a good one. Operating systems are more likea product than basic research, although at the time this was less so than today. You take away know-how from both, but you need to have a plan for what to do with a product. Up until then, OSs were tied very closely to hardware; UNIX turned out to be the most portable operating system ever.
You are missing a major point though. Bell Labs had enoug people of this caliber running around that a couple of rapscallions could, with a wink and their fingers crossed, create an operating system under th guise of porting roff. In part this was due to the overal wastefulness of Bell as a regulated monopoly. They told the regulators how much it took to run a telephone system, and the regulators marked that figure up. But it goes to show if you're going to waste money, at least you should waste it on something useful.
Another factor that is different now than then is government investment in research. Part of this was the cold war, which post sputnik threw a lot of money at applied research projects, possibly because nobody knew where the next marginal dollar.
Current attitudes towards government investment in applied research in Washington are rather negative. The idea is that it amounts to "government planning", and that applied research interferes with market efficiencies in allocating research capital to applied problems. Basic research -- OK for the government, but applied research is somebody else's job. Unfortunately, their counterparts in the US private sector is increasingly thinking the same thing, that their job is watching the quarterly profits and applied research is somebody else's job. That's what Lucent was saying; they shouldn't be in the applied research business anymore. The Federal government has cut research funding in energy R&D, agricultural R&D, and at NOAA, NIST and other Department of Commerce agencies.
It's not that the government doesn't do research anymore. Nor is it the case that the government and private sector don't do ANY applied research. But Lucent has a point. A private sector company can't be expected to invest in research that pays off in ten years; there are too many uncertainties in business to ask investors to shoulder that. Five years is reasonable. But if five years is a reasonable end point for private sector research efforts, and, say, twenty years is a reasonable starting point for public sector research efforts, then we have a massive gap in the 5-20 year range. That applied research gap is a massive national economic vulnerability.
Re:In more trouble than most realize... (Score:3, Interesting)
You might be right that you have only heard the horror stories or maybe you only remember the horror stories. Maybe outsourcing does lead to worse products all the time these days but as the education of India goes up they will be doing just as high quality of workmanship as we will.
No one looks at the cost of reproduction (Score:5, Interesting)
The cost of reproduction has risen by a factor of nearly 4 since I was born in 1954, fertilizing the portfolios of landlords, or more properly, land barons, with the decomposing marriages, fetuses and sometimes bodies of the bulk of the baby boom generation, leaving a demographic hole being filled with imported slaves* by those same landlords.
The baronage calls this "progress", even as as the price of homes was removed from the consumer price index while introducing CPI factors like "hedonic value" and "imputed rent" to make it appear "real" earnings have increased over the time period of demographic collapse and loss of ethnic enfranchisement to imported laborers for the baronage.
I call it genocide [geocities.com].
*It is really being too kind to the baronage to call the imported laborers "slaves" since the baronage doesn't have to pay for their human capital upkeep--the rest of us do via social programs. Southern Plantation owners were far more moral than these sorry excuses for human beings.
Figures from my insurance agent sent to me on my birthday:
The two big ticket necessities:
3 bedroom house price increase: 22 times
1954 $ 10,250
2006 $219,375
car price increase: 18 times
1954 $ 1,567
2006 $28,000
Even if we grant that the quality/cost ratio of manufactured goods has gone up so much during the last 52 years that $1,567 for a used car in 2006 is as good as a new car was in 1954, it doesn't bring down the sum of the 2 major debt-service items much:
house+car increase: 19 times
1954 $ 11,817 =$1,567+$10,250
2006 $220942 =$1,567+$219,375
So the debt-service load in a family household has gone up nearly a factor of 20 in the last 52 years.
And don't kid yourself that it didn't hit hardest at the peak child-bearing potential of the mid-to-late boomers who were paying 20% mortgage rates when they were trying to form families in the early 1980s [geocities.com].
Look at these foreclosure rates peaking within the first 10 years of boomer's trying to form families:
Year $ value of mortgage loans foreclosed (in millions)
1965 944
1966 1,034
1967 957
1968 865
1969 364
1970 321
1971 438
1972 478
1973 577
1974 715
1975 1,086
1976 1,129
1977 868
1978 723
1979 683
1980 917
1981 1,563
1982 3,282
1983 4,240
1984 6,163
1985 8,675
1986 13,942
1987 18,373
1988 18,859
1989 18,189
1990 22,862
1991 17,105
1992 12,408
1993 6,852
1994 3,422
1995 2,506
1996 2,138
1997 1,805
1998 1,470
1999 1,022
2000 900
Has household income kept up? Hardly...
average household income increase: 13 times
1954 $ 4,137 (one wage earner)
2006 $54,000 (two wage earners)
So household income has gone up only about 70% as much as the essential household debt service in the last 52 years.
Oh, but wait--that "household" in 1954 was one income and the income was relatively stable--the woman stayed at home and raised the kids.
How can we factor not only that both parents must work in 2006 and not only are each of their jobs less secure, but the effective income of the household, adjusting for risk of not being able to meet debt payments for a substantial period of time?
Here's a realistic option: We can reasonably say that the odds of both parents being out of work at any given point of time in 2006 is comparable to the odds of the father being out of work in 1954. Hence the reliable household income--the income stream that can service debt without foreclosure--is approximately 1/2 of the household income. Certainly we can say that there w
Being a software developer... (Score:2, Interesting)
Decimation... (Score:3, Interesting)
True enough, 90% would be a massacre.
I'd say that mostly you are right, but 'Adapt to survive and thrive.' is easy to say but for a lot of people it is hard to put into practice. Personally I don't have any trouble being a IT employment-nomad and moving every so often to follow the jobs since I am not married and have no kids. I'd even move to India if I had to even if I hate the climate (as in: weather) down there. Unfortunately not everybody is as willing or as able as we are to uproot their wife and kids every 2-3 years pack their belongings into a 20ft container and travel around the world with a big smile on their face in a cheerful quest to adapt to the latest fashion trend in the fabulous outsourcing biz. Unfortunately it looks as if this lifestyle will become a necessity for a lot of people unless they are willing to settle for a relatively menial job back home.
Re:RD Offsored Too. Everyone SOL. (Score:3, Interesting)
Typical of analysts, bosses, etc. (Score:2, Interesting)
I am a CAD Drafter and at my old job our IT manager had it in his head that we would be faster with AutoCAD LT than regular AutoCAD. For those of you not familiar with Autocad, LT is an extremely crippled version of the software. There's no command line, no expandability with LISP routines, and no 3D. We kept telling him that switching to LT was going to increase lead time from engineering due to the cut in productivity (we literally had hundreds of LISP routines we relied on). He arrogantly refused to listen, as if we didn't know sh*t about the tasks and software that we used every single day.
Analysts and CEOs sit in an Ivory Tower, practicing what I like to call "theoretical business." They are so far removed from "the trenches" (i.e. the real world) that they actually think they have a clue what it's like to do your job. We have the John Stossels of the world telling us "outsourcing is GOOD thing!"
It reminds me of 1984: War is Peace, Freedom is Slavery, Ignorance is Strength
It is creating a MUCH MORE BIGGER market (Score:3, Interesting)
Now an Iowa local computer store is able to sell to finland, morocco or egypt, via an e-store.
Scratch that, even local KILT producers are able to take work orders from all over the world.
This is globalization. As in a free market, it comes with its own challenges. You cant expect a rose be free of its thorns.
Re:RD Offsored Too. Everyone SOL. (Score:5, Interesting)
Hey, you're the first to mention the concept for which I was looking, so you get the reply:
This is correct, in my opinion. The big myth - which was not cited in the article - is that you can actually maintain an economy with high standard of living based on "high value" services alone. The key to an economy is really its ability to produce wealth - hard, physical, tangible goods that, as you said, actually raise the standard of living of that society's citizens. All the dentists and doctors in the world cannot help you if you don't have good tools, good infrastructure, or even good food.
I remember from one of my early economics classes that the only wealth-producing endeavours known are agriculture and manufacturing - the rest of economic activity just shuffles that wealth around.
If the economy of a country switches to being service-based, it is then a slave to the actual wealth-producing nations, because if the nations that have the wealth no longer need or want the services, with what is the service-based economy left? The reason the US economy used to be so robust is it had a good balance between service and wealth production. The shift away from producing wealth locally (I don't mean by ownership, I mean physically) is probably a greater risk than most are able to recognize.
Re:In more trouble than most realize... (Score:2, Interesting)
I am not sure whether majority of outsourcing projects fail. I know that a study by Frauenhoffer institute in germany showed that big group of offshoring companies (I think they analyzed the ones of 400 or more employees) came back to their original (german in this case) market in few years time due to unrealized savings (in other words they failed to save anything in the excercise).
The whole process of deindustrialization is caused by big internationals that use their position to compare our wages on a global scale and use their power to avoid that same comparison for the products on the local markets. Some of them look like cancer cells (Wallmart is a good example) - their only goal is growth and this in the long run cannot be good. Of course nobody has enough power to stop such processes now. This much is clear - communism fell (and that is good so) so big worry for capital dissolved - now labor is preceived just as a commodity as any other (or so some may think). OC such results of commoditization of labour will have their end at some point. The markets in China and India grow and soon we will be able to sell our services there too instead of buying them only.
Complex subject (requiring rather more effort to control) and one we are going to face (better sooner than later) - pity our kings and queens (you may call the presidents or whatever this does not change their 'royal' status) are not really up to the chalange.
Oh, well. I sort of _like_ kim chi (Score:3, Interesting)
I've been taking unemployment office job-hunting classes offered in our "heart-of-the-midwest" state the last couple weeks where they make you get chummy and identify yourself, and I have run into no fewer than FOUR people who had been teaching English in Beijing, Taiwan, or Japan. They were back wondering whether there _still_ aren't any jobs in the U.S. and judging from the general pessimism I suspect they will be back in Beijing shortly.
Maybe the global economy means everybody hops one continent to the left. Ted Turner already owned a land mass the size of Delaware and Rhode Island combined. If enough of us leave, maybe he can be the first American to own a state outright and the U.S. can divide itself up into little fiefdoms of the super rich.
Re:In more trouble than most realize... (Score:4, Interesting)
Cough, cough, Bell Labs Holmdale. Other than a few show pieces, I am not sure that Bell Labs or the Bell System had physical plant that was any more posh than any other industrial company at the time. The Bell System physical plant at Long Lines and the local operating companies was solidly overbuilt and equipment was constantly maintained. The biggest thing that changed after the Bell System breakup was that instead of engineering and building telco plant that would operate continously without service interruption for 20 or 30 years, physical plant was designed to last a much shorter time, perhaps 5 years.
I believe that Western Electric was one of the reasons that Bell Labs was well funded. In 1981, the operating companies paid Western Electric about $500 for all of the parts that made up a Touch Tone, Trimline phone. The Trim Line base cost over $200, the Touch Tone handset cost over $200, the coiled cord cost about $10, and the line cord cost another $10. The operating companies bought almost everything from Western Electric, and everything was gold plated; including pens (Waterbury, of course), paper, electron tubes (some of which are coveted today), vacuum cleaners, wire, telco equipment (including installation), dust cloths, tools, computers (which were not called computers, usually they were called processors or controllers) -- everything. Western Electric's prices were not regulated, the operating companies' rates were based upon what it cost to provide the service - which included what it paid Western Electric.
Re:In more trouble than most realize... (Score:3, Interesting)
From what I see in this forum and elsewhere, US workers are embittered, cynical and feel they're grossly underpaid, while foreign workers are not embittered, uncynical and are grateful to work for peanuts.
Someone tell me why I SHOULD hire a US worker or invest in the US with the above being true.
For ever job I could give a bitter and ungrateful US worker, I could give 10 jobs and materially improve people's lives in another country.
Which is the moral choice?
I'm so tired of this bitter and gloomy country that I'm planning on moving to the Philippines, where people at least try their best to appear cheerful. Life there isn't perfect and there is a lot less money, but at least people are determined to be happy with what they have.
And if things are so bad, why do we have a 5% unemployment rate? That's about as low as it can go without major problems. (There is always churn in the labor market with people quitting jobs and getting new ones.)
D
Re:In more trouble than most realize... (Score:2, Interesting)
re: no pride - Made in the USA tags (Score:4, Interesting)
The problem with that line of thought is, people run around trying to drum up support for things made in the U.S.A. with "peer pressure" vs. trying to ask the tough questions. (EG. WHY do people not particularly care if the Made in the U.S.A. tag is on their product or not?)
I saw this clearly with cars and trucks throughout the 80's and into the 90's. You had your union workers proudly driving around their Chevy, Ford or Dodge trucks with big bumper stickers slapped on them telling you to only buy U.S. made vehicles. Yet, most of the general public was reading publications like "Consumer Reports" before making such a big purchase, where they learned that every year, the most-reliable and best made vehicles were coming from Japan instead. So what do you do? Buy U.S.A. anyway and receive an inferior product (and by extension, continue to vote for inferior products with your dollars)?
I think "pride" in U.S. made products will only really come when we've earned it. This isn't going to happen as long as we're only concerned with selling "as cheap as China" either. We need to quit dumping our skilled jobs on other countries to save a buck in the short-term, and then wondering why people don't really like our products better than foreign ones!
so much can be done remotely (Score:3, Interesting)
If I can mail a firewall across the states, someone in India could mail one from there. Likewise with a router.
Is it nicer to have someone on-site? You betcha. But its cheaper to have an on-site guy who is just competant enough to plug in the port marked "WAN" and outsource the harder configuration to someone else who costs more per hour, but doesn't need to be salaried.
Re:In more trouble than most realize... (Score:3, Interesting)
This is actually a pretty good point, but it lacks a couple really big elements. The US had a huge country with vast untapped natural resources and a relatively stable level of employment when wages started climbing. Wages were also strongly boosted by that nasty old bugaboo, unions. India, by contrast, has fewer natural resources, little legal support for pushing up wages, and a vast, vast populations of terribly poor people looking for work. And when India and China are done, there's the rest of Asia, Eastern Europe, and South America to absorb, before we even get started with Africa and the Middle East. Absorption of global labor pools is a transition the world needs to go through, but we're going about it in the most turbulent and unprotected ways imaginable (largely thanks to the Cult of the Free Market Fairy).
Yes, as people get richer their (and their descendents') motivation to work their tails off definitely declines. And that's before they even start thing "postmaterially", wanting to center their life around meaningful work (however they define that) rather than just lucrative work. But this can only happen as long as the continually and rapidly increasing productivity of all workers (i.e. more wealth is being made than ever before) is distributed evenly. And that's been utterly gutted on a national (in most countries) and global level. Centrally planned economies don't work, but if you don't redistribute income, you don't redistribute opportunity, and it doesn't take very long after that happens for your middle class to destabilize and evaporate. The political challenge of our time is to figure out how to resuscitate the middle class and open opportunity.
Good post... (Score:3, Interesting)
Something rarely mentioned here in the USA is the impact of these measures on foreign workers. Obviously foreigners have some claim to a higher standard of living. Obviously a wage increase to people in sub-saharan Africa would benefit them.
Thus far, globalization has been a tremendous boon to foreigners. Since the mid-1990s, when globalization began picking up the pace, the world has had an economic growth rate of over 5% annually--more than in any prior time in history. As a result, wages in some very populous places (Coastal China, for example) have quadrupled. That increase in wages has had a dramatic and positive effect on poverty in countries that were previously extremely impoverished. Bear in mind that in the early 1970's China had a per-capita GDP that was scarcely higher than sub-saharan Africa.
I believe that capitalism and rising prosperity in those places will also greatly benefit world stability to the benefit of America. Obviously there will still be sources of instability (religious extremism and territorial disputes are two examples that may not be mitigated by prosperity) but we will no longer face violent confrontations over imagined "exploitation" or competing economic systems.
The American IT industry is doing fine. I work in it and I can say with confidence that demand for programmers is about as brisk as it has ever been, except during the anomalous dot com boom.
It's strange when American IT workers (a few of them, at least) react angrily to Indians and others who are trying to do the same things we do. It's the height of hypocrisy. We should never fault anyone for just trying to participate in the global economy.
The vision which America has exported in recent years is that capitalism benefits everyone, and furthermore, that freedom includes economic freedom. So far, that policy has worked extremely well in the short time it has been given, in most places at least, contrary to what detractors claim. Even in the few places it has not worked well (like Russia), people still have regained most of what was lost during the messy transition from Communism.
...Right now the world is undergoing rapid economic growth similar to that experienced by Western Europe and America during the late 19th century and early 20th. It is quite feasible that in a few decades most people in the world will enjoy a standard of living approaching 1st-world standards. A world like that would benefit of everyone, including Americans, and it would be unbelievably stupid and cruel of us to prevent it.
Re:Jan 2001: stupid reference point. (Score:3, Interesting)
I'll qualify that- not since 1876. Because there have been no powerful PEOPLE since 1876- the year that corporations became first rate citizens and the rest of us became slaves. The system seduces us, makes it look like we're doing well- as long as the continuation of the system benefits from our use. But the guy living in the $12 million mansion is even more of a slave than the guy who has to work three minimum wage jobs to survive; the well being of human beings is not the primary focus of capitalism and never has been.
I actually feel kind of sorry for you. You have trouble finding work because of your own issues, but you can't accept that it's your own fault and you blame everything on powerful bad people who you think exploited you. Instead of taking control over your own situation, you dream of a revolution. It's a pretty sad, vicious circle.
Well, I did take control over my own situation- I decided to become a bureaucrat instead. It pays a bit less, but at least they're required to pay me for work done- by law- and the money will be taken in taxes- at the point of a gun if neccessary. So I've solved my own situation. It took me 2 years to get my foot in the door, and another 3 years of hard work to get my foot in the door- but at least I'm here and safe from just about anything the corporations can do.
To a large extent, the difference between people who are successful in capitalist societies and those who fail isn't honesty and dishonesty; it's the choice between taking an attitude of self-improvement and control,
Which is dishonesty by and large- it's the lie of independance when in reality we're all interdependant.
and letting yourself sink into bitterness and disempowerment. Look at most poor ghettos. People there are convinced that rich people are going to exploit and crush them no matter what they do, so they can't muster the willpower to go to school and become wealthy themselves. It's not powerful people that are causing your problems; it's you.
The difference being that I went to school, I did all the right things, my skillset is wide and varied and most of all up to date. I spent those two years of unemployment studying and putting out resumes- I worked 16 hour days, putting out resumes during the day at a rate of 100 a month, studying at night to keep my skills up to date. Self-improvement counts for NOTHING- it's not what you know it's who you know. Once I figured that out- I got in touch. I went to political meetings and found a senator who was starting a work program in a state agency for outside consultants. I got myself on that list, got a contract. And a second contract, and a third, and a fourth. All the while I was watching the lists of retirees, waiting for an opening- and when one came, I removed myself from private industry forever.
But what those 5 years taught me is that capitalism benefits nobody- it's a choice between your body and your soul, and if you think you've benefited, you should count your fingers, your toes, your cousins...something will be missing somewhere. Capitalism is a lie- and when you think you're benefiting from it you're really just building a lifestyle that you won't be able to maintain when the ground shifts out from underneath you.