Outsourcing Has A Positive Side

Discussion in 'Economy' started by Adam's Apple, Mar 11, 2005.

  1. Adam's Apple
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    Adam's Apple Senior Member

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    Lou Dobbs to Outsourcing: Drop Dead!
    By Larry Elder
    March 10, 2005

    Excerpted article

    Does outsourcing benefit the United States?

    You better believe it does. Free trade works both ways. Jobs coming from other countries to the United States are called "insourced" jobs. While more jobs are outsourced from the U.S. than are insourced to the U.S., for the last 15 years insourced jobs grew by 117 percent, while outsourced jobs only grew by 56 percent. Insourced jobs account for nearly 5 percent of all private-sector jobs, and tend to be higher paying — with salaries an average of 31 percent higher than other private-sector jobs. Foreign-owned U.S. subsidiaries manufacturing their goods here in America account for 20 percent of all U.S. exports.

    What about the decline in manufacturing jobs? Can we blame outsourcing? For the most part, no. Manufacturing now employs a smaller percentage of workers, given our dramatic increase in worker productivity. Higher worker productivity means fewer workers required. Between 1995 and 2002, U.S. manufacturing jobs declined 11 percent — identical to the average world decline in manufacturing employment. Yet in the last 15 years, insourced manufacturing jobs grew by 83 percent, while outsourced manufacturing jobs only grew by 23 percent.

    The U.S. Department of Commerce reported that, in 2003, the U.S. bought over $77 billion from foreign companies, and sold $131 billion to them — exporting nearly $54 billion more in services than we imported. This surplus accounted for an additional 400,000 jobs in 2003.

    Outsourcing and globalization of manufacturing allows companies to reduce costs, benefits consumers with lower cost goods and services, causes economic expansion that reduces unemployment, and increases productivity and job creation. According to the McKinsey Global Institute, for every $1 outsourced, the economic gain to the U.S. as a whole is $1.12 to $1.14.

    Consider the real-life example of E-Loan, Inc., a Pleasanton, Calif.-based company that processes loan applications. Because of the growing sensitivity to "outsourcing," E-Loan offered customers a choice. Processing your loan could take 12 days if processed by American workers. If, however, you wanted your results two days earlier — in 10 days — you could agree to have your loan processed in India. Guess what? According to the Los Angeles Times, 9 out of 10 customers choose the 10-day, overseas option. So much for, "I only buy if it's made in America."

    Sen. Hillary Rodham Clinton seems to have a better grasp of Economics 101 than CNN's Dobbs. Speaking to business and political leaders in India, she called "outsourcing" a "reality." Sen. Clinton, offering yet another reason why she may be savvy enough to win her party's 2008 nomination, said, "There are people who feel left behind . . . because they do not understand the economic benefits of outsourcing." Tell Lou.

    http://www.jewishworldreview.com/cols/elder1.asp
     
  2. -Cp
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    -Cp Senior Member

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    Here's another good one:

    http://www.jewishworldreview.com/0205/stossel.php3


    "Show us the jobs!" chanted union workers at an AFL-CIO rally protesting outsourcing. They were angry that "their" jobs were going overseas.


    So let's go look for the jobs that have disappeared.


    ABC News asked the AFL-CIO for its best examples of workers who lost jobs because of outsourcing. The first people they told us to talk to were Shirley and Ronnie Bernard.


    The Bernards used to work at a Levi's factory in Knoxville, Tenn. But then, Levi's sent jobs to Mexico and closed that plant. It "tore a lot of people up because some people have been here since they were 16 years of age, and they've been here like 20-something-odd years," one woman told the local ABC affiliate. People "were in tears," said a man.


    "You've done something for 20 years, got up, went to work every day, and then all of a sudden you don't have anyplace to go, and nobody needs you anymore," Shirley Bernard recalled.


    Lou Dobbs feels their pain. The CNN anchor has made outsourcing complaints a trademark of his show. "Just because of cheap labor, we're, we're destroying our middle class," he told me. "That is just stupid. Being stupid is un-American."


    But it's restricting outsourcing that would be un-American and stupid. Outsourcing benefits the middle class by bringing lower prices.

    Take clothing. Lots of it is made abroad these days — and Lou Dobbs sees that as a terrible thing. "This country cannot even clothe itself," he says. "Ninety-six percent of our apparel is imported." I pointed out that this gives us more choices for less money. "When was the last time you bought a suit of clothes?" Dobbs responded. "Because if your prices went down, I would be shocked."


    Shocked? OK, be shocked, Lou. The Labor Department keeps track of clothing prices, and its price index has been going lower and lower.


    But what about all those jobs going overseas? Consider 50 people in India doing programming that people in California used to do. They work for a company called Collabnet, run by Bill Portelli. The salary for each Indian programmer costs him less than half as much as an American's salary for the same job.
     
  3. Adam's Apple
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    Adam's Apple Senior Member

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    Yes, I remember reading that article. I guess the argument for or against outsourcing all depends on whether you support a global economy. And it is a global economy, whether we like it or not.

    As far as jobs go, I believe in taking care of our own people's needs before bringing in illegals to do the work. I am sure there are people in the U.S. without high school degrees who could fill the service area jobs now being filled by illegal immigrants.
     
  4. Shattered
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    Here's the problem with that, I think.. Most people that didn't bother even getting a high school diploma are probably the ones sucking our welfare systems dry, and they don't *want* to work. Any "service" job is going to be "beneath" them.
     
  5. Adam's Apple
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    Adam's Apple Senior Member

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    Sad, but true, Shattered. Now you have my interest aroused. I will have to do a search to see if the welfare act signed while Clinton was president is still getting results. For awhile after that law went into effect, we got stories in the press regularly about welfare women who had been given some training and were able to get jobs and get off welfare. Haven't come across that kind of story for awhile.
     
  6. Working Man
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    Remember a few years back when McDonalds (and others of similar type employment) was offering relatively high pay for flipping/serving burgers? Were the welfare rakers taking any of these jobs? Not to any extent. They didn't have to because their "Social Services" checks came in on a regular basis.

    Those people who have free loaded off of the rest of us never did get any basic job skills , or foundations of further employment when the getting was good . Now that so many entry level jobs are being outsourced, where are these dipsticks suppose to go?? OH, I get it, if we listen to the dweebs who hang on these forums,, the ones who "Own their own business", or who feel that "their are plenty of high tech jobs for those who want them",,, if we listen to these manure spreading dipsticks,,, we would not be in a position where there are only two people paying into SS for eveyone collecting it..

    American Growth areas:
    Let's see, gambling is on the rise.. Bank robberies are up, personal armed robberies,, identity theft,,etc, etc.. (How many different poker chip sets are there for sale these days?)

    Speaking of,, do we really need a series on TV that shows people robbing homes? Discovery channel crap. Nice guys on that show,, sort of the Robbin' da Hoods we all want our kids to aspire too.
     
  7. archangel
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    And I suppose the insourced job proposal by "Sea Code" in California is good for US workers...especially young College Grads in Computer Science...
    see: www.newsmax.com (front page) Cruise ship scam.....lol :teeth:
     

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