The Politics of Outsourcing

[uscitizen]

Would you care to explain how outsourcing create jobs in the US. I don't subscribe to the journal so I can't read all of your link.

Basically he says that companies that outsourced jobs used the extra money they saved to create more jobs here. The jobs outsourced tended to be lower pay/lower skill and the ones created tended to be higher paid higher skilled. Which stands to reason because when companies develop a cost advantage they use it to increase market share and sales, necessitating more staff.
Of course understanding this would require thinking beyond Stage One, which many posters here are incapable of.

That's an interesting theory and there may be some truth in it. But my first thought is that if I can increase my profits by outsourcing my subcomponent manufacturing, then I will outsource my entire manufacturing operation, then my technical support center and engineering and design group. I am left with only marketing, distribution, and other costs needed put my product in stores.

And what do I do with my profits? I do exactly the same thing again and again with other products. The idea that business will take profits from outsourcing and invest in the activities that create jobs in the US is dicey at best.

Yep the only US jobs they would invest in would be distribution and sales people.
Why would they do otherwise?

 

[loosecannon]

That's an interesting theory and there may be some truth in it. But my first thought is that if I can increase my profits by outsourcing my subcomponent manufacturing, then I will outsource my entire manufacturing operation, then my technical support center and engineering and design group. I am left with only marketing, distribution, and other costs needed put my product in stores.

And what do I do with my profits? I do exactly the same thing again and again with other products. The idea that business will take profits from outsourcing and invest in the activities that create jobs in the US is dicey at best.

or more to the point, a lie. Of the bald faced variety.

 

[The Rabbi]

Would you care to explain how outsourcing create jobs in the US. I don't subscribe to the journal so I can't read all of your link.

Basically he says that companies that outsourced jobs used the extra money they saved to create more jobs here. The jobs outsourced tended to be lower pay/lower skill and the ones created tended to be higher paid higher skilled. Which stands to reason because when companies develop a cost advantage they use it to increase market share and sales, necessitating more staff.
Of course understanding this would require thinking beyond Stage One, which many posters here are incapable of.

That's an interesting theory and there may be some truth in it. But my first thought is that if I can increase my profits by outsourcing my subcomponent manufacturing, then I will outsource my entire manufacturing operation, then my technical support center and engineering and design group. I am left with only marketing, distribution, and other costs needed put my product in stores.

And what do I do with my profits? I do exactly the same thing again and again with other products. The idea that business will take profits from outsourcing and invest in the activities that create jobs in the US is dicey at best.

Except the evidence is that isn't what happens. What does happen is that manufacture goes overseas while research, development, sales, marketing, and service all stay here. And increase. All those jobs are higher skill than the manufacturing jobs and higher pay. The savings are reinvested in additional product lines, expansion of existing ones, etc etc.
So the companies do create more jobs than they send overseas. That is simply fact.

 

[ClosedCaption]

1.4 Million Jobs Outsourced | Campaign Money Watch

1.4 Million Jobs Outsourced

More than 1.4 million jobs were outsourced due to trade policies since 1994 in the nine states in which the U.S. Chamber of Commerce has spent nearly $5.7 million on attack ads in Senate races from October 5th to October 12th, 2010. The group also found that more than 184,000 jobs were lost to outsourcing in the 22 congressional districts in which the Chamber has spent $4.8 million on political ads in the same time period. Press Release

Senate Races

Race Jobs Lost Target Beneficiary Chamber Ad Spending
CO-Senate 35,383 Michael Bennet Ken Buck $500,000
CT-Senate 87,500 Richard Blumenthal Linda McMahon $500,000
FL-Senate 144,600 Charlie Crist Marco Rubio $1,000,000
IL-Senate 272,017 Alexi Giannoulis Mark Kirk $500,000
MO-Senate 102,608 Robin Carnahan Roy Blunt $259,375
NH-Senate 23,017 Paul Hodes Kelly Ayotte $1,005,056
PA-Senate 299,508 Joe Sestak Pat Toomey $498,500
WI-Senate 81,958 Russ Feingold Ron Johnson $248,500
TOTAL 1,433,083 $5,685,056



House Races

Race Jobs Lost Target Beneficiary Chamber Ad Spending
CA-11 1,765 Jerry McNerney David Harmer $262,268
CO-04 6,327 Betsy Markey Cory Gardner $250,000
FL-08 1,529 Alan Grayson Dan Webster $250,000
FL-24 101 Suzanne Kosmas Sandy Adams $250,000
IA-03 4,253 Leonard Boswell Brad Zaun $183,026
IL-10 9,718 Dan Seals Robert Dold $100,000
IL-11 5,701 Debbie Halvorson Adam Kinzinger $300,000
KS-03 1,321 Stephene Moore Kevin Yoder $172,864
ND-AL 3,850 Earl Pomeroy Rick Berg $273,525
NJ-12 8,451 Rush Holt Scott Sipprelle $150,000
NM-01 5,592 Martin Heinrich Jon Barela $244,598
NM-02 5,852 Harry Teague Steven Pearce $239,739
NV-03 1,150 Dina Titus Joe Heck $350,000
OH-15 2,932 Mary Jo Kiloy Steve Stivers $261,735
OH-16 12,181 John Boccieri James Renacci $172,175
OH-17 17,245 Tim Ryan James Graham $102,855
OH-18 11,410 Zack Space Bob Gibbs $29,245
PA-03 12,376 Kathy Dahlkemper Mike Kelly $248,500
PA-10 11,979 Chris Carney Tom Marino $248,500
PA-12 22,511 Mark Critz Tim Burns $248,556
VA-05 24,171 Tom Perriello Robert Hurt $197,002
WI-07 13,814 Julie Lassa Sean Duffy $266,593
TOTALS 184,229 $4,801,181

*Job loss data provided by the Trade Adjustment Assistance Database built by Public Citizen.

**Data on U.S. Chamber of Commerce spending available through the Federal Election Commission.

PAID FOR BY PUBLIC CAMPAIGN ACTION FUND'S CAMPAIGN MONEY WATCH. NOT AUTHORIZED BY ANY CANDIDATE OR POLITICAL PARTY.

 

[The Rabbi]

And how many jobs were created as a result? With 5% unemployment it would have been a bunch.

 

[loosecannon]

And how many jobs were created as a result? With 5% unemployment it would have been a bunch.

correlation doesn't = causation.

 

[uscitizen]

Basically he says that companies that outsourced jobs used the extra money they saved to create more jobs here. The jobs outsourced tended to be lower pay/lower skill and the ones created tended to be higher paid higher skilled. Which stands to reason because when companies develop a cost advantage they use it to increase market share and sales, necessitating more staff.
Of course understanding this would require thinking beyond Stage One, which many posters here are incapable of.

That's an interesting theory and there may be some truth in it. But my first thought is that if I can increase my profits by outsourcing my subcomponent manufacturing, then I will outsource my entire manufacturing operation, then my technical support center and engineering and design group. I am left with only marketing, distribution, and other costs needed put my product in stores.

And what do I do with my profits? I do exactly the same thing again and again with other products. The idea that business will take profits from outsourcing and invest in the activities that create jobs in the US is dicey at best.

Except the evidence is that isn't what happens. What does happen is that manufacture goes overseas while research, development, sales, marketing, and service all stay here. And increase. All those jobs are higher skill than the manufacturing jobs and higher pay. The savings are reinvested in additional product lines, expansion of existing ones, etc etc.
So the companies do create more jobs than they send overseas. That is simply fact.

so you are saying that US companies have more management, etc than they do actual workers that produce something?

 

[NYcarbineer]

Basically he says that companies that outsourced jobs used the extra money they saved to create more jobs here. The jobs outsourced tended to be lower pay/lower skill and the ones created tended to be higher paid higher skilled. Which stands to reason because when companies develop a cost advantage they use it to increase market share and sales, necessitating more staff.
Of course understanding this would require thinking beyond Stage One, which many posters here are incapable of.

That's an interesting theory and there may be some truth in it. But my first thought is that if I can increase my profits by outsourcing my subcomponent manufacturing, then I will outsource my entire manufacturing operation, then my technical support center and engineering and design group. I am left with only marketing, distribution, and other costs needed put my product in stores.

And what do I do with my profits? I do exactly the same thing again and again with other products. The idea that business will take profits from outsourcing and invest in the activities that create jobs in the US is dicey at best.

Except the evidence is that isn't what happens. What does happen is that manufacture goes overseas while research, development, sales, marketing, and service all stay here. And increase. All those jobs are higher skill than the manufacturing jobs and higher pay. The savings are reinvested in additional product lines, expansion of existing ones, etc etc.
So the companies do create more jobs than they send overseas. That is simply fact.

Could you give us a representative example of a company that outsourced X number of jobs and then as a consequence created X plus number of US jobs?

 

[The Rabbi]

And how many jobs were created as a result? With 5% unemployment it would have been a bunch.

correlation doesn't = causation.

Yup. Both ways. Outsourcing doesn't cause unemployment either.

 

[The Rabbi]

That's an interesting theory and there may be some truth in it. But my first thought is that if I can increase my profits by outsourcing my subcomponent manufacturing, then I will outsource my entire manufacturing operation, then my technical support center and engineering and design group. I am left with only marketing, distribution, and other costs needed put my product in stores.

And what do I do with my profits? I do exactly the same thing again and again with other products. The idea that business will take profits from outsourcing and invest in the activities that create jobs in the US is dicey at best.

Except the evidence is that isn't what happens. What does happen is that manufacture goes overseas while research, development, sales, marketing, and service all stay here. And increase. All those jobs are higher skill than the manufacturing jobs and higher pay. The savings are reinvested in additional product lines, expansion of existing ones, etc etc.
So the companies do create more jobs than they send overseas. That is simply fact.

so you are saying that US companies have more management, etc than they do actual workers that produce something?

No, not really. Although the subtlety will be lost on you.

 

[The Rabbi]

That's an interesting theory and there may be some truth in it. But my first thought is that if I can increase my profits by outsourcing my subcomponent manufacturing, then I will outsource my entire manufacturing operation, then my technical support center and engineering and design group. I am left with only marketing, distribution, and other costs needed put my product in stores.

And what do I do with my profits? I do exactly the same thing again and again with other products. The idea that business will take profits from outsourcing and invest in the activities that create jobs in the US is dicey at best.

Except the evidence is that isn't what happens. What does happen is that manufacture goes overseas while research, development, sales, marketing, and service all stay here. And increase. All those jobs are higher skill than the manufacturing jobs and higher pay. The savings are reinvested in additional product lines, expansion of existing ones, etc etc.
So the companies do create more jobs than they send overseas. That is simply fact.

Could you give us a representative example of a company that outsourced X number of jobs and then as a consequence created X plus number of US jobs?

You'd have to read the study referenced in the OP. I would guess GE would be a good example though.

 

[Soggy in NOLA]

That's an interesting theory and there may be some truth in it. But my first thought is that if I can increase my profits by outsourcing my subcomponent manufacturing, then I will outsource my entire manufacturing operation, then my technical support center and engineering and design group. I am left with only marketing, distribution, and other costs needed put my product in stores.

And what do I do with my profits? I do exactly the same thing again and again with other products. The idea that business will take profits from outsourcing and invest in the activities that create jobs in the US is dicey at best.

or more to the point, a lie. Of the bald faced variety.

Bald face?

 

[The Rabbi]

That's an interesting theory and there may be some truth in it. But my first thought is that if I can increase my profits by outsourcing my subcomponent manufacturing, then I will outsource my entire manufacturing operation, then my technical support center and engineering and design group. I am left with only marketing, distribution, and other costs needed put my product in stores.

And what do I do with my profits? I do exactly the same thing again and again with other products. The idea that business will take profits from outsourcing and invest in the activities that create jobs in the US is dicey at best.

or more to the point, a lie. Of the bald faced variety.

Bald face?

It's an anti semitic comment since i have a beard.

 

[NYcarbineer]

Except the evidence is that isn't what happens. What does happen is that manufacture goes overseas while research, development, sales, marketing, and service all stay here. And increase. All those jobs are higher skill than the manufacturing jobs and higher pay. The savings are reinvested in additional product lines, expansion of existing ones, etc etc.
So the companies do create more jobs than they send overseas. That is simply fact.

Could you give us a representative example of a company that outsourced X number of jobs and then as a consequence created X plus number of US jobs?

You'd have to read the study referenced in the OP. I would guess GE would be a good example though.

I get a paragraph of intro in that link and that's it.

So your answer is, no I can't, I guess...

 

[NYcarbineer]

That's retarded. Taxes are lower than they've been in 50 years. Stop believing everything your rightwing puppetmasters in the media tell you.

When have taxes, other than the federal income tax, gone down?

When and where have FICA, Medicare, fuel, alcohol, tobacco, property, sales and other taxes been reduced?

Which taxes, besides the federal income tax, haven't increased?

I eagerly await your comprehensive list.

I have to ask this first. Why did you ask me for comprehensive itemized evidence, but you didn't ask the person I responded to, who claimed that higher taxes have made 2 income households necessary,

for his comprehensive list?

eh?

I won't eagerly await your answer, because I hate disappointment.

 

[The Rabbi]

Could you give us a representative example of a company that outsourced X number of jobs and then as a consequence created X plus number of US jobs?

You'd have to read the study referenced in the OP. I would guess GE would be a good example though.

I get a paragraph of intro in that link and that's it.

So your answer is, no I can't, I guess...

OK, here's the full article:
William Cohen: Obama and the Politics of Outsourcing - WSJ.com

And he cites matthew slaughter from Dartmouth's Tuck School. I'm sure you can find it somewhere.

 

[Flopper]

Basically he says that companies that outsourced jobs used the extra money they saved to create more jobs here. The jobs outsourced tended to be lower pay/lower skill and the ones created tended to be higher paid higher skilled. Which stands to reason because when companies develop a cost advantage they use it to increase market share and sales, necessitating more staff.
Of course understanding this would require thinking beyond Stage One, which many posters here are incapable of.

That's an interesting theory and there may be some truth in it. But my first thought is that if I can increase my profits by outsourcing my subcomponent manufacturing, then I will outsource my entire manufacturing operation, then my technical support center and engineering and design group. I am left with only marketing, distribution, and other costs needed put my product in stores.

And what do I do with my profits? I do exactly the same thing again and again with other products. The idea that business will take profits from outsourcing and invest in the activities that create jobs in the US is dicey at best.

Except the evidence is that isn't what happens. What does happen is that manufacture goes overseas while research, development, sales, marketing, and service all stay here. And increase. All those jobs are higher skill than the manufacturing jobs and higher pay. The savings are reinvested in additional product lines, expansion of existing ones, etc etc.
So the companies do create more jobs than they send overseas. That is simply fact.

Tell that to all the people who lost their jobs due to outsourcing customer support centers and engineering, and software design. No, outsourcing effects a lot more people than just low paid factory workers.

We have always assumed that American technology and education would keep the productivity of the American worker so high that employers would hire locally instead of going overseas. However, today the same technology that's available in the US is available overseas. Countries such China, India, and Indonesia have made tremendous progress in the last 20 or 30 years in educationing and training their workers. If you think highly trained educated workers whose labor cost are well below what we pay in the US are not available, think again.

As a liberal, I hate to say this, but I believe the answer, at least in the near term, is a reduction in Corporate tax. I don't believe the 15%-30% rate should be changed. I believe we should offer a tax incentive to hire American workers. For example we could offer an increased tax deduction for hiring American workers. The only other solution I see is to force the cost of American labor down which has huge political and social implications.

 

[Oddball]

That's an interesting theory and there may be some truth in it. But my first thought is that if I can increase my profits by outsourcing my subcomponent manufacturing, then I will outsource my entire manufacturing operation, then my technical support center and engineering and design group. I am left with only marketing, distribution, and other costs needed put my product in stores.

And what do I do with my profits? I do exactly the same thing again and again with other products. The idea that business will take profits from outsourcing and invest in the activities that create jobs in the US is dicey at best.

Except the evidence is that isn't what happens. What does happen is that manufacture goes overseas while research, development, sales, marketing, and service all stay here. And increase. All those jobs are higher skill than the manufacturing jobs and higher pay. The savings are reinvested in additional product lines, expansion of existing ones, etc etc.
So the companies do create more jobs than they send overseas. That is simply fact.

Tell that to all the people who lost their jobs due to outsourcing customer support centers and engineering, and software design. No, outsourcing effects a lot more people than just low paid factory workers.

A whole bunch of those people became private contractors, making far more than they did as mere employees.

Why is it libs seem to believe that the be-all-end-all of existence is punching a clock at a J.O.B.?

 

[The Rabbi]

That's an interesting theory and there may be some truth in it. But my first thought is that if I can increase my profits by outsourcing my subcomponent manufacturing, then I will outsource my entire manufacturing operation, then my technical support center and engineering and design group. I am left with only marketing, distribution, and other costs needed put my product in stores.

And what do I do with my profits? I do exactly the same thing again and again with other products. The idea that business will take profits from outsourcing and invest in the activities that create jobs in the US is dicey at best.

Except the evidence is that isn't what happens. What does happen is that manufacture goes overseas while research, development, sales, marketing, and service all stay here. And increase. All those jobs are higher skill than the manufacturing jobs and higher pay. The savings are reinvested in additional product lines, expansion of existing ones, etc etc.
So the companies do create more jobs than they send overseas. That is simply fact.

Tell that to all the people who lost their jobs due to outsourcing customer support centers and engineering, and software design. No, outsourcing effects a lot more people than just low paid factory workers.

We have always assumed that American technology and education would keep the productivity of the American worker so high that employers would hire locally instead of going overseas. However, today the same technology that's available in the US is available overseas. Countries such China, India, and Indonesia have made tremendous progress in the last 20 or 30 years in educationing and training their workers. If you think highly trained educated workers whose labor cost are well below what we pay in the US are not available, think again.

As a liberal, I hate to say this, but I believe the answer, at least in the near term, is a reduction in Corporate tax. I don't believe the 15%-30% rate should be changed. I believe we should offer a tax incentive to hire American workers. For example we could offer an increased tax deduction for hiring American workers. The only other solution I see is to force the cost of American labor down which has huge political and social implications.

Except those same workers, like the ag workers of yore, find other jobs. This is why the unemployment rate during the height of outsourcing was in the 5% range.

 

[FA_Q2]

It is an absolutely insane concept that outsourcing crates jobs here. That is plain bullshit. However, it is equally insane to suggest that outsourcing is bad in general as well. There is nothing wrong with outsourcing or the world economy at large. The problem occurs when outsourcing becomes too far spread and Americans begin to lose their competitive edge on the world stage. That is what I believe is just beginning to happen now. As was mentioned earlier, there are many countries that were previously not an issue when it came to technological and advanced jobs that are becoming competitive with American workers. That is as issue that needs to be dealt with.

If outsourcing is your concern then you have no further to look then yourselves. It is truly stupid to complain about outsourcing as many of the liberals here are doing and then turn around and demand those 'evil' corporations pay higher taxes, more employee benefits, grater regulations, tighter EPA/safety standards and applaud the efforts of many unions. The premium that we place on the average American worker is EXACTLY the reason that companies are FORCED to outsource many of their operations. You cannot operate as a viable competitor in many of today's markets if you have not found ways to cut costs. This is a two way street - if you want all those benefits and protection you must accept that there are consequences. How can you be so dim to expect all of these things and not have to deal with the outcomes - give me a damn break.

The hand wringers also conveniently ignore the insourcing of jobs, from the likes of BMW & Honda.

How could anyone ignore that? It has been the main source of job growth for a couple of decades.
The selling of America.

You are an idiot. That is NOT selling America. Insourcing jobs is EXACTLY what we want. It is always good to have an economy that is attractive enough and a climate that is beneficial enough that other countries are sending their jobs and money to you rather than the other way around.

We're "richer"????

Now THAT was fucking funny.

Delusional.

Yea, soybeans are better than cars and computers every single time. And the next time someone attacks us, we'll pop some corn in their direction.

YOUR DAMN RIGHT THEY ARE. You cannot eat cars....
And yes - if we are feeding you then you are VERY unlikely to attack us. On the other hand, if all you are getting from us is a crappy car that is another matter altogether...
but that has nothing to do with this thread so.....