The problem of outsourcing: what should be done?

[Ned]

Originally posted by Whoha


I somehow doubt that the free traders want to reduce the US to a third world nation(emphasis on want to).

The United States already has "free movement" of labor.

Think.

[Whoha]

I'm not talking about letting in "riff raff", im talking about US workers moving to countries where jobs are and assuming a 3rd world standard of living, but on reviewing my post I can see how it would look bad.

[Ned]

At some point I would hope, just hope, that American labor asks what it is about the United States that unnecessarily raises labor costs and forces jobs to leave. Now THAT would be a refreshing change.

[Whoha]

oh there is all kinds of stuff that we can do in that department, but be that as it may, it all falls flat vs the trade barriers erected by other nations.

[dainbramage20]

I would remind those in favor outsourcing to look at the bigger picture. In which how Americans live and the ultimate goal is to make it higher, not lower. Currently Outsourcing is lowering our standard of living (pay, benefits) and flooding wal-marts with garbage mr.coffee's.

Its benefit is minimal. And as outsourcing hits Europe's job market hard, as it is just now, I feel it will be an issue there. Kinda hard to support yourself when Volkswagen makes everything in Mexico and Turkey.

[Spiffor]

Originally posted by Ned
Spiffor, the attitude that private business must keep high priced employees over less high-priced employees just because the high-priced employees are French or Americans is the problem. Businesses must compete, make profit or they die. They DIE. They do not have the luxury to employ high-priced French or American workers unless all its competitors have to as well. As we know, the French and American unions and their lackeys like Kerry are not going to be able to keep Asia in the stone age for much longer. Asians will compete with vigor and ruthlessness. French and American companies can compete back sucessfully unless they are crippled by the likes of Kerry at the behest of his union bosses. If they are crippled by union politicians in their ability to compete, French and American companies will soon die in face of foreign competition.

This is a valid criticism against social-democratic policies in an open-market economy. To keep our high standards of living in this open-market economy, we developed countries have no choice but to promote extremely high productivity, thanks to high-tech and thanks to high education.

Or we may change our economic paradigm, and change the very conditions of our econjomy (read: get rid of the open-market economy). This is what may Apolytoners among the Socialists or Communists are advocating.

[DAVOUT]

What is really included in our so called high standards of living?

An interesting example of adaptation of the capitalism can be found in the *hard discount* stores (in Germany and France, but likely in all EU). These stores have only a few hundreds articles, an absolute minimum of expenses, and sell at a very low price foods of good quality but no brands. Initially, fiveteen years ago, they attract very very low income people, and over the years, they gain a 12% market share which give them the 3rd rank, after Carrefour 13% and Leclerc 17%.

I say that, although this has likely had a negative effect on the national growth, it has not resulted in a decrease of our standard of living. I suspect that comparable clever adaptation will greatly help to reduce our suffering until the developping countries production costs reach the western level.

[Ned]

Spiffor, yes, productivity is the key. Imagine farming. One hundred years ago, over 90% of Americans were farmers. They were planting and harvesting with horses and ran the farms with a lot of manual labor. Today, less than five percent of Americans are farmers. They harvest whole fields with very little labor, using gigantic machines that move from farm to farm, from South to North, with the harvest.

Productivity! productivity! productivity!

[Whoha]

Originally posted by Ned
Spiffor, yes, productivity is the key. Imagine farming. One hundred years ago, over 90% of Americans were farmers. They were planting and harvesting with horses and ran the farms with a lot of manual labor. Today, less than five percent of Americans are farmers. They harvest whole fields with very little labor, using gigantic machines that move from farm to farm, from South to North, with the harvest.

Productivity! productivity! productivity!

Farming isn't a good comparision for a couple of reasons.
1emand for food products is inelastic, Our caveman ancestors didn't eat more then 3 meals a day, and Bill gates doesn't either. Meanwhile demand for Manufacturing/tech goods is elastic so we won't have a reduction to 2%(or shouldn't anyway...).

2:Technology made it possible to satisfy the inelastic demand for food with less of the population. In manufacturing and tech, those jobs aren't gone(and wouldn't be if it was technology since the new wealth would be met by greater demand from everyone who is contributing to the economy), they are being done by people who are contributing zip to our economy, aren't buying our goods, aren't paying our taxes,etc.

[Kirnwaffen]

Outsourcing is a trend that I think we have to accept. It will continue to run its course until there is nowhere left to outsource to. Basically, I think we need to maintain a high standard of education and concentrate on stimulating new industries and existing industries which are more difficult to outsource.

[Imran Siddiqui]

I wonder why people think a transition period will kill the economy, when past transition periods (moving of manufacturing jobs) did not? And internal outsourcing, ie, from region to region in a country isn't decried either. Look at textile workers who lived in New England seeing their jobs moved to the South in the 60s.

I think a big part of this current cry against outsourcing is mostly racism.

[Whoha]

I think it will kill the economy because it is currently doing so. Do you see an end to the fall in the dollar? or debt? We've been pursuing these policies for the past 30 years(with a brief reprieve for a few parties in the 80s), just how much time is this temporary transition suposed to take anyway?

In your scenario I must remind you that New England and the South do business with each other.

[Imran Siddiqui]

We've been pursuing these policies for the past 30 years(with a brief reprieve for a few parties in the 80s), just how much time is this temporary transition suposed to take anyway?

This transition began a few years ago. I don't know what you are talking about this 'past 30 years'. The manufacturing outsourcing transition has been looooong done.

In your scenario I must remind you that New England and the South do business with each other.

We don't do business with India? News to me .

[Whoha]

Originally posted by Imran Siddiqui

We've been pursuing these policies for the past 30 years(with a brief reprieve for a few parties in the 80s), just how much time is this temporary transition suposed to take anyway?

This transition began a few years ago. I don't know what you are talking about this 'past 30 years'. The manufacturing outsourcing transition has been looooong done.

In your scenario I must remind you that New England and the South do business with each other.

We don't do business with India? News to me .

trade in general. If we are talking only about outsourcing, the pain has still been going on for a while. Now to clarify, India has done several things regarding trade that the South is unable to do to New England.

[Imran Siddiqui]

This breed of outsourcing is wholy distinct from manufacturing outsourcing. India may have the ability to tariff, but I don't think that Indian companies moving their call centers to, say, Thailand, would even be ABLE to be tariffed.