Outsourcing is Good

iVillage Member
Registered: 07-25-2003
Outsourcing is Good
77
Sat, 01-31-2004 - 11:22am
Some critics argue that "outsourcing" of service sector employment to foreign countries will lead to a serious decline in U.S. white-collar jobs. In reality, outsourcing will reshape but not undermine U.S. service sector employment, making companies more efficient. It will also benefit consumers and export businesses...

http://www.aei.org/publications/pubID.19814/pub_detail.asp

Renee

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iVillage Member
Registered: 03-26-2003
In reply to: wrhen
Sat, 01-31-2004 - 6:50pm
You seem to be forgetting one important issue in this scenario. The displaced workers that outsourcing creates; however, that oversight somehow doesn't really surprise me. It seems fits with your posting pattern.
iVillage Member
Registered: 07-25-2003
In reply to: wrhen
Sun, 02-01-2004 - 12:37pm
According to statistics from fifteen years ago, the avg American had 7 different careers over their lives, so no, I don't see displaced workers as disaster any more than I believe displaced workers from the carriage & buggy industry at the turn of the last century was an important issue then because contrary to the popular belief at the time, they were able to find work in new industries. The American economy is growing and the American workforce is more than capable of adapting and excelling under changing conditions.

Renee

iVillage Member
Registered: 07-25-2003
In reply to: wrhen
Sun, 02-01-2004 - 2:51pm
The Weight of the World on Our Shoulders

By DANIEL AKST

http://www.nytimes.com/2004/02/01/business/yourmoney/01cont.html

Published: February 1, 2004

EVERYONE seems worried about an exodus of high-skill jobs from the United States to third-world countries. But those fears are probably misplaced.

While some such jobs are moving overseas, the American economy will generate many more at home. And a lot of the jobs that go overseas will be more in the nature of 4 a.m. technical support for personal computers. Americans benefit from that, too. The savings from that phone center in India are built into your new $350 PC.

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There is no great shortage of jobs in this country anyway. Unemployment is at a level that, a generation ago, would have been considered hard to achieve without significant inflation. Immigrants continue to pour in, and to find work. Well-educated Americans will do just fine; foreigners are so confident in our economy that it is the beneficiary of huge capital inflows.

Indeed, the real threat to the American economy is not competition from successful foreign lands but the enormous drag imposed by countries that cannot produce the kind of strong, consistent growth required for global prosperity. A world that depended for so long on American military power for political security now depends on American consumer spending for economic security, and I suspect that this new dependence will prove just as troublesome. Over the long run, it's probably not sustainable.

By most accounts, the global economy is on an upswing. So why the worries?

Consider the European Union, collectively the world's second-largest economy, after that of the United States. With aging populations, high social welfare costs, rigid labor policies and lagging productivity gains, European countries appear condemned to slow growth for years to come. The demographics of Europe are especially worrisome; an older population is likely to be more focused on preserving the status quo than on taking risks, and fewer young workers will be supporting ever more retirees.

Then there is China. Its torrid growth may not be all that it seems, as Alwyn Young, an economist at the University of Chicago, has shown. China reported average annual growth of 9.2 percent from 1986 to 1998, but systematic underreporting of inflation accounts for perhaps three of those percentage points, Dr. Young says. Another big chunk is attributable to rising participation in the labor force and a shift of workers out of agriculture.

All of this assumes that the data are correct, and they may not be. The numbers come from China's closed political system, which I suspect lacks the flexibility, transparency and responsiveness to cope with the challenges of modernity. The country's banking and legal systems are weak. If tapped-out American consumers stop spending, its economy could be in trouble.

On to Japan. Despite some modest signs of life recently, its problems continue. Having an aging population of its own, and yet unwilling to embrace immigration, Japan still has not undertaken the fundamental reforms needed to bolster its economy.

Large sections of the globe, meanwhile, are not even within shouting distance of sustainable prosperity. Africa's problems are nearly overwhelming, and the Middle East remains addicted to oil revenue and autocracy. As for Latin America, every time one country starts doing well, another appears to falter. Even recent bright spots like India, Russia and Brazil are by no means on track for guaranteed steady growth. And this says nothing of the threat of terrorism.

The world's great hope is that materialistic Americans will buy enough goods to propel everyone else forward. I, for one, am ready to do my part. But what if financial markets turn sour? Or the domestic housing market crashes, or the dollar collapses?

Most discussions about the American economy should end by acknowledging that everything will probably be O.K., because that is how it usually turns out. But if we must worry, we should worry about the right things, not about job flight. Let's help American workers with the cost of adapting to economic changes and redouble our emphasis on education - and then focus on nudging the world's other big economies to get themselves growing again.

Renee

iVillage Member
Registered: 03-25-2003
In reply to: wrhen
Sun, 02-01-2004 - 4:31pm
I agree!

A small community of 4,000 near here just lost its local foundry to Mexico. I'm sure the 240 jobs lost to the men and women of this community are insignificant to the right wing economists, but it is a crisis for one small town and the people in it.

iVillage Member
Registered: 03-23-2003
In reply to: wrhen
Mon, 02-02-2004 - 1:48pm

This is a relief to hear!!


Avatar for goofyfoot
iVillage Member
Registered: 03-26-2003
In reply to: wrhen
Mon, 02-02-2004 - 2:09pm
People in "small" communities need to MOVE to bigger areas where they have more

opportunity. Jobs surely won't come knocking at their doors.
iVillage Member
Registered: 12-26-2003
In reply to: wrhen
Mon, 02-02-2004 - 2:47pm
That was an excellent contribution, the Seattle article with the commentary in blue font! I love reading CIO magazine's website and the article was so well written!

Thanks for sharing it!

My worries about outsourcing are tempered by the fact that I realize this is a global market that U.S. companies have to compete in. I just feel it is terrible when you call tech support or customer service (like Best Buy or Covad) and they do not understand what you are saying or the customer service ends up being just plain rotten. I don't think customer service should ever be a "script" that is completely meaningless.

Sometimes you get what you pay for.




Edited 2/2/2004 2:51:38 PM ET by claireseaglass

iVillage Member
Registered: 03-18-2000
In reply to: wrhen
Mon, 02-02-2004 - 3:11pm

>"In some industries, such as accounting and drug development, worries about how U.S. regulators will respond have slowed offshoring, said Christopher Koch, executive editor of CIO magazine, a publication for corporate information officers. Similarly, defense contractors face rules limiting involvement by foreign nationals in some projects."<


>"Prescription-drug imports to the U.S. hit $40.7 billion in 2002, a five-fold increase from 1995."<


http://www.time.com/time/subscriber/covers/1101040202/story4.html


My DH's company has branches all over Asia, but the accounting & IT is being kept in the US, mostly for security reasons.


China is stealing as much knowledge as they can from companies doing business there.


See post Worlds Greatest Fakes..............


http://messageboards.ivillage.com/n/mb/message.asp?webtag=iv-elinthenews&msg=6037.1&ctx=128

cl-Libraone





 


Photobucket&nbs

iVillage Member
Registered: 03-18-2000
In reply to: wrhen
Mon, 02-02-2004 - 3:41pm

>"foreigners are so confident in our economy that it is the beneficiary of huge capital inflows."<


Could this be because the rate of exchange is such an advantage with the loss of value of the dollar?


http://www.xe.com/


BTW Britain is sending work offshore. I can't comment on the rest of the EU.

cl-Libraone





 


Photobucket&nbs

iVillage Member
Registered: 03-25-2003
In reply to: wrhen
Mon, 02-02-2004 - 3:52pm
That is a typical narrow view. In addition to the welfare of the individuals, I am concerned about the wefare of the local economy. To take down a major employer in a community also takes down the community as a whole. Local retail businesses are affected, banks are affected, health care providers leave town and the whole comunity dries up. This is a serious problem for rural America and is made worse by policies that take good jobs out of this country for the betterment of the rich owners and stockholders.

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