Paul M Foster wrote:
> I'm seeing entirely too much of this "offshore job movement" posting on
> the main list, and I suppose I just needed someone to flame me. ;-}
>
> I'm tired of hearing the whining about this phenomenon. Companies don't
> do this because they're bored or evil or anything of the sort. It's a
> business decision. It's a matter of cost. It costs less to host many
> jobs overseas. Plain and simple.
>
> Corporations are owned by stockholders, who have a stake in the
> profitability and continued existence of the corporation. In order to
> get these things, management has to increase sales and decrease costs.
> They [mis]spend scads of money to market and sell their products to
> increase sales. The other side of the equation is costs. If a company
> makes enough profit, it can invest in R&D to determine how to more
> cheaply deliver its products. This could mean replacing metal parts with
> plastic ones, moving plants from Detroit to Tennessee, or any of a
> number of other things.
>
> Offshoring jobs is another way of reducing costs. I can pay some guy in
> India less money for doing the same job. And I wouldn't do this why?
>
> Most of the arguments I've seen against offshoring are pretty specious,
> and really come down to, "It's not fair!" And most of the people who
> complain don't really say what they appear to mean, either 1) profit is
> bad, or 2) companies _owe_ employees.
>
> First, profit is what makes the business world go around. Without it,
> there would be no business. Employees go along with this as long as they
> get what they want out of the corporation (money, benefits, niceness,
> whatever). But once the tide appears to turn against them, the true
> nature of employees is revealed: profit is okay until it interferes with
> _my_ slice of the pie. Or, _your_ profit is okay until it interferes
> with _my_ profit. Unfortunately, you're dealing with a company that's a
> lot more powerful than you are. And its fate has a far greater effect on
> the rest of the country than you do. They win, hands down. Their profit
> is more important than yours. You can prove this by going in and socking
> your manager one day. The company will go on, and you'll be without a
> job.
>
> Second, businesses don't _owe_ employees. More precisely, businesses owe
> employees whatever they agreed to when the employees signed on, no more.
> That could be salary, benefits, day care or whatever. Beyond that,
> corporations don't owe employees anything. They don't have to be nice to
> employees, provide clean restrooms or private email accounts. If you
> work for a company for fifty years, they don't owe you a gold watch or a
> pension, unless you both agreed to it in the first place. Should
> businesses treat their employees with dignity, courtesy and respect?
> Sure. And smart corporations do. Dumb ones have a higher turnover. But
> they don't _owe_ that dignity, courtesy and respect. If you believe they
> do owe you this stuff, you probably also believe that poor people are
> _owed_ welfare from the government. Companies don't make happy
> employees, they make widgets. Happy employees are okay as long as it
> doesn't interfere with making profitable widgets.
>
> It's a laissez faire economy. All things being equal, the market
> regulates itself. Disaster normally accompanies government intervention
> in free markets. But part of the deal is that business changes. An
> agrarian economy yields to a manufacturing economy. A manufacturing
> economy yields to an service economy. Auto manufacturing moves from
> Detroit to Tennessee and Kentucky. The entertainment industry moves from
> New York to Los Angeles (the beginning of the motion picture industry).
> Somebody builds a computer that fits on a desktop, and a whole industry
> is born. When millions of people get trained in computers and IT, and
> the bubble bursts, thousands of people are left unemployed. It's not
> some sinister plot by evil corporations who secretly hate all employees.
> It's business.
>
> Now, there is the related issue of H1B visas, but it's really more of a
> government than a business issue. Businesses want to offshore their
> jobs? Well, I just checked the Constitution, and there's nothing there
> about that. It's a free market, so go ahead. But wait-- you also want to
> let people from these other (sucky) countries come here and fill in for
> Americans in the job market? I know I read something about _that_ in the
> Constitution. Yep, there it is: immigration. Yep, I _can_ do something
> about that. You want to get educated here? Fine. But our country doesn't
> suck and yours does. So when you're done, you have to promise to go back
> there and make your country un-sucky with this education you just paid
> us a lot of money for. Only fair. Besides, the world needs a lot fewer
> sucky countries. And look at it this way-- if you make your country suck
> less, maybe you'll stop hitting us up for international aid money. Our
> taxes will go down (yeah, right), and our companies can afford to pay
> their employees more, so we can keep more of our jobs onshore. Sweet
> deal, eh? ;-}
Much of what you say is true. I totally agree that many people seem to
think that profit is bad, and companies "owe" employees. Profit is the
world's greatest motivator, and companies "settle up" with employees
every time they issue that pay check.
But I don't agree with you entirely. First, you're ignoring the "big
picture". And secondly, as nice as it would be to simply accept
"laissez faire" as the driving force in our economy, there is in fact
enormous evil and greed that is driving history right now.
You speak about agrarian economy and manufacturing ecomony and service
economy....
I cringe when I hear the term "service economy". You know what a
"service economy" is? That's what politicians tell you you're going to
have, while they and their banking brethern sell you down the drain.
The truth is that no country can maintain their standard of living in
the long run unless they "create" things of value.
They can do this by manufacturing (ie taking some raw materials and
making a chair, or a car or a shoe (well, hopefully two of them). Or
they can do this by harvesting natural resources (oil, timber, wheat,
whatever).
However, "service" is NOT a "wealth creating" industry. As necessary as
it may be to sell insurance, or write programs, or make hamburgers, or
give haircuts or paint fingernails, it DOES NOT create anything of
value, in the "big picture".
For many decades there was a slow drain of jobs (ie manufacturing) from
this country, but it was tolerable. There were a few people back then
who noticed, "Hey, there's not one single television set made in the
USA". But if all the cameras, televisions, and motorcycles are made in
Japan, that's ok because the Japanese will buy SO MUCH stuff from us, in
exchange--remember those days? Yeah, right....
Bear with me--I'm getting to the evil/greed part. We entered a period
of history where the stock market, with help from the Washington
printing presses, created a huge "consumerism bubble". There was an
enormous demand for goods. The investment bankers (Goldman Sachs, JP
Morgan, et al) were not content to make huge amounts of money by simply
funding the manufacturing of millions of pc boards, chassis, etc. They
realized that they could increase their profits even more (no, profits
are still not evil!.....wait for it!) by manufacturing offshore. Not to
mention the potential for ducking lots of taxes, etc.
Here comes the evil/greed part: in my opinion, the very top elites in
the investment banking circles HAD TO KNOW that every time they got a
few million dollars for putting together a billion-dollar deal to
manufacture widgets in China, they were destroying forever one more
element of the ability of this country to "create wealth". Once a
factory gets moved to Mexico, or China, does it EVER come back? In a
pig's eye.
So, yes, I do think that there are evil, greedy people who are selling
the country out, and don't give a damn about consequences--after all,
when you have $300 million and homes in four different countries, you
can pretty much adapt to anything.
So why are we, relatively speaking, doing so well, even now? Well,
whenever you see the newspaper saying "the economy is strong", read the
part that comes next: because retail sales are strong. We have
re-defined the word "economy" to mean "people buying stuff". Well, that
ISN'T a measure of strength of economy. It suits the spin-masters to
have you think so, but it's just not true.
You say, "But you still haven't answered the question: why are we doing
so well?"
This is all about the US dollar. In traditional economics, when you
printed a gazillion greenbacks (or any other currency), you debased it
until it was worthless. But Greenspan et al have been injecting money
like crazy for years, but no inflation--how come? Part of the answer is
that, as a currency, until recently, the US dollar had no competitors.
I mean, if you're not going to buy oil, and a 10-million unit deal for
VCRs in US bucks, then what are you going to use?! But then along came
the Euro....
Another part of the answer is that foreign investors were happy to pour
their money back into the US stock market, and US financial paper.
Another factor: It's kind of like the old saying, "When you owe the
bank $50,000, the bank owns you. When you owe the bank $50,000,000, you
own the bank." In other words, to some degree, it's not in the
interests of foreigners to pull the plug on the US. At least, not all
at once.
Can this go on forever? Answer: does anything go forever?
Nations rise and fall, and the US has entered the last phase of their
decline--empire building. Some people think that the Iraq war was about
WMD. It wasn't. Some people think it was to steal the oil. Wrong
again (well, mostly wrong). It's about CONTROLLING oil, and who gets
enough oil at what price, and who doesn't. Before the war, there was a
steady push for world payments for oil to be made in Euros.... A
disaster for the US dollar.
I guess that ain't going to happen now! See how nice it is to have a
huge troop base in the middle east?
Big picture, we are becoming the soviet union that we (well, except the
young whelps like you) grew up with, complete with propaganda, conrol of
the press, sucking assets from satellites (not the flying kind), the
whole ball of wax.
That is the outcome when you have a society to sustain, and you have
little or no means of wealth-creation (ie manufacturing).
Like it or not, America has an ENORMOUSLY high standard of living,
compared to the majority of the population of the world. And most
people will not be happy to "even things out" by giving away, for
example, 90 percent of everything they own.
Bottom line, some of the people who are complaining about their jobs
going offshore might not be exactly right about where to lay the blame,
but their complaints are justified; the net job movement is one way
only; and the jobs ain't coming back! Good reason to whine, IMHO!
John
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