World Economics Question

[VetLegion]

Originally posted by snoopy369
Vet, you don't seem to accept that values are defined by the life experience. You 'value' what is important to you.

Not really. Probably about 90% of our set of values is learned from others and not gained from personal experience.

It is silly to suggest that people in third world countries should suddenly value education, just out of the blue... things need to change such that they DO value education.

I'm not really arguing for intervention here. Some cultures don't place a high value on education and I'm not sure that this should (or could) be changed from the outside.

But it is simply true and it is true that it's a bigger obstacle than poverty.

If you look at Taiwan's history you see a population which was very poor and uneducated half a century ago but had a long-term orientation and placed high value on education.

These were inherent characteristics of the population of Taiwan and they allowed them to organize a good education system which soon benefited them a lot.

[Heraclitus]

Originally posted by snoopy369
Perhaps because they do not accurately report their literacy? (Russia and China both likely significantly overreport their literacy...)

And if they aren't? I mean you just delt away with my argument by saying: "Your source is wrong and I haven't cited any evidence to prove this. See that is why you are wrong."

[snoopy369]

You asked a question that has little merit, so I provided it little in return Saudi Arabia is clearly a separate case (not being a third world country by economic standards). Otherwise... I consider overreporting to be the most likely reason, but have no specific evidence nor care to obtain such. It's not interesting to me... so take what I said as you wish

[Heraclitus]

DP

[Heraclitus]

Originally posted by snoopy369
Saudi Arabia is clearly a separate case (not being a third world country by economic standards).

heh. You see Saudi Arabia demonstrates that there are important factor besideds the wealth of a nation that affect the quality of education its citizens enjoy. That's why I chose it, and thats why its relevant.
How is that for merit?


Do you really belive it is beyond the realm of possiblitly that some 3rd contries could afford a better education if they as cultures put more value on it?

[Kidlicious]

Originally posted by Imran Siddiqui
And plenty are figuring out that it makes more sense to pay a little bit more for labor that is more productive. A good example (though not the industries I'm talking about) is some technical customer service is being moved back to the US because having an accent barrier is a huge blow to productivity (to some points so bad that the customer goes nuclear).

That's wrong. More and more jobs are being moved overseas everyday. That's a fact.

[Kidlicious]

Originally posted by DarkCloud
Kidicious
An american worker is much more productive hour per hour than almost any worker anywhere in the world... Why? Because the technology is generally state of the art and the best here- thus they don't need to employ many people to produce each product.

I think you have that backwards. They will only hire workers in the US where they can achieve high productivity. Productivity diminishes with additional workers. Technology has little to do with it. They pretty much use all the state of the art technology everywhere now. You don't see assembly line style factories anymore. It's all computers and robotics.

[Kidlicious]

Originally posted by snoopy369
I think if you could prove that comparitive advantage was false, you would win a nobel prize (or be shot by crazed economists, one of the two).

Well, I said it was irrelevent. What is false is the arguments people make with the concept.

[Victor Galis]

Originally posted by snoopy369
If you could prove that the theory of comparitive advantage no longer has any application (and suggested a separate theory that does apply), I suspect you would win a nobel prize handily

Maybe maybe not. The economics establishment is annoyingly neoclassical The best argument against it continues to be that the world is dynamic. The advantage in one sector that a country might have is dependent on who decides to produce that good there as well as other factors. The theory made a lot more sense in the past when the goods being produced were agricultural. With high tech goods, the things which confer advantage, having the technology and high-skilled workers are mobile.

[DarkCloud]

I think you have that backwards. They will only hire workers in the US where they can achieve high productivity. Productivity diminishes with additional workers. Technology has little to do with it. They pretty much use all the state of the art technology everywhere now. You don't see assembly line style factories anymore. It's all computers and robotics.

According to the curve, there is a peak optimum amount of workers that is based on the technology level of the firm employing the workers. If the firm's technology and infrastructure is not also efficient, then it will need more people who will produce less things.

"don't see assembly line anymore..." I dunno what you're talking about- car parts are still made by assembly line- with more robotics involved, of course, but still assembly line.

[rah]

Originally posted by Kidicious


That's wrong. More and more jobs are being moved overseas everyday. That's a fact.

While some more are going overseas, some are coming back home. That's a fact.

We do a lot of market research on customer satisfaction and the uproar over accents and poor quality is a serious concern for a lot of companies. I personally know of two examples where customer service calls for high end customers were moved back in country since some customers were quite upset and these companies were able attribute lost customers to out sourced call centers.

I don't know the net effect in numbers but more and more companies have been outsourced long enough now to do statistics or custom research (using us) to show the true cost in terms of costs and customer retention. A lot of companies are realizing that saving a few bucks today is costing them many more in the long run. Our company also does a lot of call center work and are ratio of in country to out country calls is swinging back to more in country for much the same reasons. Quality and overall costs.

It is fun to read the comments by people serviced by out sourced phone centers. A good number of people have real issues that go far beyond simple bigotry.

[Kidlicious]

Originally posted by rah
While some more are going overseas, some are coming back home. That's a fact.

Yes, I'm not saying that every single job will be shipped overseas and that we will have 100% unemployment. I'm saying that more jobs are going to be shipped overseas than what would be optimal, and generally the situation is getting worse as more jobs are shipped.

We do a lot of market research on customer satisfaction and the uproar over accents and poor quality is a serious concern for a lot of companies. I personally know of two examples where customer service calls for high end customers were moved back in country since some customers were quite upset and these companies were able attribute lost customers to out sourced call centers.

People get outraged at first, but after some time they don't object as much. I hate talking to machines myself, but it seems like everytime I call a company I have to talk to one. More people used to be outraged at that, than they are now.

[rah]

And I'm saying more jobs are coming home than you think are.

Some people stay outraged.
Gee, one persons opinion vs 10s of thousands of interviews that I have access to. I'll stick with my data thank you.

[Kidlicious]

Originally posted by rah
And I'm saying more jobs are coming home than you think are.

Some people stay outraged.
Gee, one persons opinion vs 10s of thousands of interviews that I have access to. I'll stick with my data thank you.

The numbers are startling: 3.3 million jobs in less than 15 years. That's the number of U.S. jobs expected to be lost overseas by 2015 according to a recent report by Forrester Research. But the sheer size of the exodus isn't what's worrying analysts the most — it's the type of jobs. Some critics are worried that this time it's the corporate main office is getting ready to shut down and head out of the country, packing up cubicles and all. As reported on NOW, a new wave of jobs are leaving U.S. shores: software development, customer service, accounting, back-office support, product development and other white collar endeavors.

In late 2002, computer giant Oracle announced that it would double its workforce in India. Texas Instruments already employs over 1,000 engineers at a Bangalore campus, and has made plans for a much bigger presence in the near future. In November of 2002, Microsoft Chairman Bill Gates announced that the company will be making investments of approximately $400 million in India.

And, It's not just technology jobs that have ended up in India. Charles Schwab recently moved part of its information technology division to a contractor in Bangalore, India. AOL already has a large presence in India. American Express and British Airways have ramped up their employment in the country during the past year as well.

FRONTLINE WORLD reported last year that over half of Fortune 500 companies have moved jobs offshore, including famous names from many fields: Oracle, Dell, HSBC, Delta Air Lines, Novartis, J.P. Morgan Chase, Hewlett-Packard, American Express, British Airways. More are expected to follow.

According to the U.S. Bureau of Labor Statistics, jobs separations due to overseas relocation are at their highest level since 1995.*

Projected Number of U.S. Jobs to Move Overseas


Management: Number of jobs moving overseas by 2015: 288,281

Business: Number of jobs moving overseas by 2015: 348,028

Computer: Number of jobs moving overseas by 2015: 472,632

Architecture: Number of jobs moving overseas by 2015: 184,347

Life sciences: Number of jobs moving overseas by 2015: 36,770

Legal: Number of jobs moving overseas by 2015: 76,642

Art, design: Number of jobs moving overseas by 2015: 29,564

Sales: Number of jobs moving overseas by 2015: 226,564

Office: Number of jobs moving overseas by 2015: 1,659,310







Source: Forrester Research, Inc. November, 2002



And where are those jobs going? Many are indeed going to India, as portrayed in NOW's story, but others are heading to China, Russia, Vietnam, the Philippines, Malaysia, and the Czech Republic. In short, they are moving toward cheaper labor costs.

In November, 2003, Bangalore will be hosting a huge IT job conference, Bangalore IT.com 2003, the largest IT conference in all of Asia. Intel and IBM are among the sponsors.

It should be noted that while salaries are much lower in India and other BPO hot spots, that does not mean that the companies are providing inadequate compensation — the cost of living is significantly lower in India. However, as both THE TIMES OF INDIA and THE ECONOMIST have recently noted, some jobs are in turn leaving India for even cheaper locales.


Salary Comparisons


Software Programmer, United States: $66,100

Software Programmer, India: $10,000

Mechanical Engineer, United States: $55,600

Mechanical Engineer, India: $5,900

IT Manager, United States: $55,000

IT Manager, India: $8,500

Accountant, United States: $41,000

Accountant, India: $5,000

Financial Operations, United States: $37,625

Financial Operations, India: $5,500







Source: Paàras Group, 2002; International Labour Organization

http://www.pbs.org/now/politics/jobflight.html

I'll stick with Bill Moyer.

[snoopy369]

Lying with statistics