offshoring/outsourcing reduces salaries in tech sector: proof?
- Thread starter wcanyon
- Start date
I didnt read the other posts.
Outsourcing may decrease nominal wages but REAL wages are increasing. More crap being produced at lower prices means more crap can be bought with the same money.
The standard of living for the employee laid off may be drastically lowered but it is more than offset by the rise in standard of living by consumers.
At the micro level each firm is doing the right thing by outsourcing that is increasing productivity. And this should be good at the macro level as well, however I think there are structural issues with the states that are the cause of the problems, not hard working people half way around the world.
but americans don't have the same amount of money, that's the problem
Consumers are the employees, wtf kind of logic is that? All you are saying is the ones whose jobs are unaffected benefit at the expense of everyone else.
But that's not even true because the massive government debt being incurred will affect they employed through higher taxes and a less stable society to live in.
The whole idea of free trade rests on the law of comparitive advantage, which is severly flawed because it assumes that oversees workers will only do lower end work while everyone in the USA can retrain for higher end work, and that they will actually buy our higher end stuff. Obviously it's not working out that way.
Jai-HoTechnology has brought down the borders...
Does it really matter where your technical staff is if you are able to instantly collaborate and conference using technology?
US Companies already had adapted for Telecommuters and adopted virtual workers into their processes over the last 10 years.
Compare the worker expectations:
Indian workers are accustomed to 6 day work weeks, 10 hour days with minimal benefits and are not generally litigious in nature.
Just a 1099 type relationship - no FICA, No Soc Sec, No payroll head aches. Lots of talent available at US minimum wage type rates.
A Cisco Engineer maintaining wide area networks in the US cost approx $120K - with benefits $150K. Outsourcing abroad the same skill set costs $30K. Effectively the cost of just the US worker's benefits package.
Does it really matter where your technical staff is if you are able to instantly collaborate and conference using technology?
US Companies already had adapted for Telecommuters and adopted virtual workers into their processes over the last 10 years.
Compare the worker expectations:
Indian workers are accustomed to 6 day work weeks, 10 hour days with minimal benefits and are not generally litigious in nature.
Just a 1099 type relationship - no FICA, No Soc Sec, No payroll head aches. Lots of talent available at US minimum wage type rates.
A Cisco Engineer maintaining wide area networks in the US cost approx $120K - with benefits $150K. Outsourcing abroad the same skill set costs $30K. Effectively the cost of just the US worker's benefits package.
)Correct. Diploma-mill economists regurgitate worthless theory all day.
Outsourcing = job loss = wage decline.
Comparative advantage falls apart because China enjoys both a low-cost, high-skilled workforce. With our help, China makes those high-tech products indigineously, instead of buying our exports !
GM, Ford manufacture cars for China, in China.
Airbus plans to build aircraft in China, for China.
Same with Dell etc.
I really don't see any problem with having Americans compete with other people in other countries. Competition is what drives a free and efficient market and the Americans complaining about job loss or wage loss simply need to develop a higher-paying skill set. We certainly have a lot more educational opportunities to do that compared to people living in other countries such as India. I am glad that outsourcing exists so that some people in India and China are able to perform at their higher skillset (what else would the be doing?). The real problem is cultural. Our society does not value hard work. It only values the product of hard work, wealth and status. If you go to Japan and tell someone that you work in finance or law, they will look at you like some kind of parasite. Programmers are like any other type of profession, there are good programmers and there are bad programmers. And the best will always be able to claim the highest premium.
There is no viable solution that would not escalate into all out trade wars:
The Govt must effectively regulate the world free market and slant the balance back to our favor and under our control. Wielding massive force of power to overhaul and lord over the worlds businesses through taxes / penalties / quotas and tariffs.
Unfortunately our power wielding processes are plagued with special interests and corruption. One big Congressional Circle Jerk.
Evening the playing field does not lead to a winning situation for us. As much as we may have historically mocked the Chindians and their backwards and corrupt government they have done a good job of protecting their currency and economies.
Our US egos make us believe the world would come crumbling down if not for the high and mighty dollar. These countries will continue to improve and prosper without us. Unfortunately we need them more than they need us...
We're crying foul right now that the Chinese are undervaluing their currency. We're the fools that have deflated our currency by interfering and manipulating our own free market. We've not only outsourced jobs.. we've outsourced an entire middle class.
The Govt must effectively regulate the world free market and slant the balance back to our favor and under our control. Wielding massive force of power to overhaul and lord over the worlds businesses through taxes / penalties / quotas and tariffs.
Unfortunately our power wielding processes are plagued with special interests and corruption. One big Congressional Circle Jerk.
Evening the playing field does not lead to a winning situation for us. As much as we may have historically mocked the Chindians and their backwards and corrupt government they have done a good job of protecting their currency and economies.
Our US egos make us believe the world would come crumbling down if not for the high and mighty dollar. These countries will continue to improve and prosper without us. Unfortunately we need them more than they need us...
We're crying foul right now that the Chinese are undervaluing their currency. We're the fools that have deflated our currency by interfering and manipulating our own free market. We've not only outsourced jobs.. we've outsourced an entire middle class.