Forum Post: Why is outsourcing jobs such a bad thing?
Posted 12 years ago on Oct. 9, 2011, 4:25 p.m. EST by Frank
(19)
from Washington, DC
This content is user submitted and not an official statement
When the public goes shopping they demand the lowest price for their products. The company that makes these goods can either price themselves above the market (and go out of business eventually) or figure out a way to reduce the costs.
Your competitors abroad benefit from the lowest possible labor costs they can source. If you choose not to do the same, you will be priced right out of the market.
Why does this matter? After all, the American consumer benefits enormously and these aren't the kind of jobs that make you rich anyway. Assembling an Ipad in a factory is one of the lowest skill jobs, you would be lucky to earn more than minimum wage. You also ignore the fact that many jobs are created through this Ipad in the USA and these pay far more than assembly work: Advertising, Sales, Retail, Distribution, Transportation, I could go on and on.
Why stop outsourcing at our borders? Maybe the town you live in should begin to produce their own widgets to create jobs instead of outsourcing it to Detroit or California, etc.
We all feel pride at "Made in America" but when you have to pay $85 for a pair of jeans using the more expensive American labor we balk. If we bought all our products here the American family would go broke.
Lastly, a lot of people talk about "helping" others. The peasants in China have only one way out of dire poverty and that is work in the cities. Granted it is not comfy like our jobs here but they don't have the wealth yet (though the middle class is growing) to provide the higher wages. Would you rather send the peasants back to the country to starve or at least afford them the opportunity to move up?
Dickens wrote about the evils of the industrial age, especially child labor. He ignored the fact that the industrial age didn't invent child labor, it was always there and the means by which many families survived. What he also didn't see is that life in the pre-industrial era for children was far harsher. They worked grueling days on farms from sunrise to sunset and many didn't survive until adulthood. It was only when the industrial revolution came along that they had the means to rise above their situation, and that they did...
It all comes down to real wages not going up since the 1970's while corporate profits and executive compensation is off the scale. This means the companies are using their profits to pay their executives and very poor people in China and elsewhere for $5-$10 a day rather than take slightly less profit growth and give American workers a reasonable living wage.
A Hamilton fan?
The reason that real wages didn't go up is because the rest of the world caught up to us after WWII. We also got lazy and borrowed our way to prosperity over the past 25 years. Now we are poor and sorely in debt. Without 14 trillion in debt we would be in very good shape.
A living wage is all well and good but are you prepared to pay a "living price" for the goods in your local stores? $50 for a toy that is $8 and made in China? Read stories in the newspapers about businessmen who tried to start a "Made In America" movement. Nobody bought their products.
Ben and Jerry's tried to pay their CEO a limited salary relative to the lowest earner in their company. Didn't work, they got useless talent and relented. You get what you pay for.
I agree this is a very difficult problem because technology is moving so fast that it is making jobs redundant faster than we can retrain people for a new labor force. As for the 14 Trillion debt, much of that money went to defense contractors, drug companies, and other corporations. Granted a huge percent of it went to Medicaid, Medicare and Social Security but that is because healthcare costs are out of control because the corporations want to make money off of illness.
It's not just assembly worker jobs shipped out of this country. I'm in the engineering field and my job title is now being done in Mexico and India by internet connections.
I understand that but it is a natural consequence of globalization.
There are two ways to address this. Either embrace severe protectionism (which hurts everyone) or become more competitive.
Look at this way. Suppose you worked in a town with a lot of engineers and the town outsourced the work to a company based in a town 50 miles way because they underbid you. Would you protest and demand protectionism? Where does it stop?
We are not just a nation of consumers -- we are also producers (or need to be). Outsourcing is a convenient way for corporations to take advantage of individuals in countries that don't have the workplace and environmental protections that we have. If we allow that without good regulation, then we as workers will be stuck in a race to the bottom and be forced to complete with smog-belching, child enslaving, societies.
You cannot have environmental protections until you have the wealth to support them. A poor person in India on a scrap heap makes $5 a day but suffers the effects of ill health. What are you going to do? Tell them they can't work and let them starve?
I watched a program on miners in South America. Many die before they hit 40 but they do the work. Why? Because it pays 500% more than any other job they can get and keeps them from starving. What is interesting is that the parents suffer but the kids benefit, they have money for better schools and soon the scenario changes. The kids no longer have to do the same as their parents.
Also I find it hard to believe that China, a country with +1 billion people has to rely on the US exclusively to be prosperous. If they do then that's pretty sad.
Because if people don't have jobs they will not have money to buy your crap.
because it robs the country of money, and pits the middle class here against the poverty and slave caste somewhere else so that the elites can shaft us all.
It doesn't rob us of money, we make more money than they do, by a huge margin on every product we source overseas.
It saves us money. Again, would you pay $90 for a pair of American jeans?
sorry, you don't understand. systemically, it sucks money out of the country. yes it does rob the country of money. It does not save the general population money, it only save the corporations money. it systemically loses money out of the USA economic system. We need 15$ american jeans and there is no reason why that can't be a reality. out sourcing is a serious serious serious systemic problem, in essence it bleeds money to other countries and causes the pile up of debt on the one hand and unemployment on the other.
It does save us money, I pay far less for my products made overseas.
$15 American jeans? Who is going to make those? It would require a $1 a day salary.
nope, it only requires more efficient and evolve manufacturing methods and increased automation. It does not save us money, it saves corporations money and then it LOSES money for the system as a whole.
You wont stop until the peasants in China are a slightly better off, but still frantically unhappy working poor, and we're in no better shape than they are. We need intelligent tariffs that reward trading partners with solid labor and environmental laws, and make doing business with the others just as expensive as doing business with the American middle class. Why am I arguing with an unpatriotic, immoral Randian?
They aren't slightly better off, they continue to improve and now China has a growing middle class. The same thing happened in the USA, look at us now. You have to start somewhere.
Tariffs? Ok, we raise price of Chinese tires. They retaliate by putting punishing duties on American chickens.
Result? Other countries provide cheap tires and thousands of Americans in the poultry business lose their jobs.
Brilliant.
Oh because we're on such equal trade footing now? Yes, let's see them starve their populace by cutting off grain and "chickens" - hint, they won't. Have you been to China recently, Frank? It's the worst of both worlds, mass poverty AND mass consumerism, exactly where we're headed, thanks to your wonderful invisible hand. The economy needs to work for us, not the other way around.
They can buy chickens elsewhere just like American companies got their tires from South America instead of China.
We are headed towards mass poverty when we embrace socialism. Tell me, how many times did you hear of mass starvation in the USA during the 1800's or 1900's? Was there mass poverty in the USA then?
Prior to the late 30s, there was mass injustice, no middle class, and the stirrings of a revolution (avoided by FDR, did he cause mass starvation??), even though we had a whole continent worth of resources still waiting to be exploited. The socialism straw man again... Did we have mass starvation/poverty under the "socialist" Dwight Eisenhower, when the marginal tax rate was 90% and we had all sorts of protectionist, values-based tariffs? You're the extremist, sir, not me, and not OWS.
There is more injustice today than there was in the 1930's. I can cite plenty of examples.
This marginal tax rate of 90%, are you assuming that the wealthy actually paid this? I lived during that period and can assure you that they had tax shelters and many moved overseas living in havens like Monaco. So, no, these tax rates weren't paid by anyone. You are also taking the period of the 50's out of context. The world was practically in ruins and the USA was the only country that had not been bombed into oblivion. We had NO competition, so it was easy to earn high wages in jobs like manufacturing. Today there is plenty of competition and we have to adapt instead of complaining.
Even the ultra liberal Beatles (except for Lennon) objected to the high taxes and created their Apple company to avoid it.
Again. Balance. Agreed we need to adjust, we all need a lot less. If the whole world were brought up to American largess we'd need 2.5 planets worth of resources for the current population.
What we don't agree on is that all the adjusting needs to be on the backs of the middle and lower classes. Right now the system is protecting the profits of the few and punishing the 99%. All need to sacrifice much more equally.
Re: percentage of taxes paid. 50% of 90% beats 50% of 35%, which is where we're at now. The 1% pays 17% total right now, and that's unacceptable.
Just for you, Frank: http://robertreich.org/post/11113448478 and http://robertreich.org/post/10157767903
Edit, regarding more injustice today than the 30s - yes, you're right!! We need reform (again) now as badly as we did then. The past 30 years have represented a new gilded age and the damge must, again, be undone by a people working together to better its fate, rather than the current "every man/woman for him/herself" scenario that you support and continue to recommend.
It's bad because it not only guts our economy but because we lose our self suffiency. It's not rocket science.
Stop the free trade! It's just another method of / for the rich to make more profits while destroying the manufacturing (and in turn middle class) in USA.
True, the public always goes for the lowest price regardless of its underlying quality of life, and although I'm all in favor of taking down today's ineffective and inefficient Top 10% Management Group of Business & Government, there's only one way to do it – by fighting bankers as bankers ourselves. Consequently, I have posted the Strategic Legal Policies, Organizational Operating Structures, and Tactical Investment Procedures necessary to do this at:
http://getsatisfaction.com/americanselect/topics/on_strategic_legal_policy_organizational_operational_structures_tactical_investment_procedures
Join
http://finance.groups.yahoo.com/group/StrategicInternationalSystems/
if you want to support a Presidential Candidate Committee at AmericansElect.org in support of the above bank-focused platform.
Outsourcing happens in a situation in which the US has an enormous trade deficit and governmental deficit. This is enabled because the US dollar is the international currency of reserve-which gives the US government a huge capacity to borrow. These combine the confuse the extent to which the US is really creating anything-and the extent to which it is liquidating assets which took generations to build.
Proof:
Investigation shows the US subsidizes feed to its poultry
BEIJING - China will impose an anti-dumping duty as high as 105.4 percent on US broiler chicken products, effective from Sept 27, the Ministry of Commerce said on Sunday.
There is absolutely nothing wrong with outsourcing. It's a free market baby!