djgreetings

Is outsourcing to blame for lack of jobs?

With the economic downturn, many companies look to send jobs overseas and save lots of money but what impact does that have here at home on the scores of people looking for work. more...

Do you think outsourcing is good or bad?

vc318

Well, it has definitely gotten out of hand. Outsourcing was definitely abused during the Bush administration, giving such companies who wished to send American jobs overseas and receive incentives like tax breaks on top of it all.

mh67511

Well outsourcing isn't just international. The government "outsources" much of their work (via contracts) withing America and many corporations "outsource" things like printing monthly statements.

The reality is companies have to control expenses if they want to stay in business. Salary/wage and benefits expenses are often the largest expenses for a company. Of course outsourcing can hurt the company in the long run so these companies should really tread carefully.

I think outsourcing is usually efficient. It's not just a matter of being "bad." It certainly is bad for the workers who lose their jobs, consumers who experience poorer service, and the government who may lose out on tax revenue. But it might also be good for the company, who saves money, consumers, who receive lower prices/no price increases, the employee who loses their job if they find a better job, and of course the workers who in the countries receiving the jobs.

We live in a global economy - this is highly unlikely to change! If people can't accept or deal with this, they are going to be left behind. Period! There are plenty of jobs that can't be outsourced and it's something you should take into consideration when choosing a career.

And really, Americans do not "deserve" these jobs more than the people working in the call centers, factories, etc. in other countries. That's quite a sense of entitlement.

wanderer78

I never understood that.

I think outsourcing is part of it, but there are other factors. But I don't feel like I know enough about it to offer an opinion. I'm curious to see what others think.

vc318

But this doesn't make it right, in my opinion. I mean, rewarding companies for sending American jobs abroad? Why should anyone be rewarded for that? I know outsourcing has been going on for years but in the last 8 years, but leaving Americans without jobs is just senseless. Before you know it, Americans will have to leave the U.S. altogether just to find any reasonable job, if they're not doing this already.

sunnykerr

Well, it has gotten out of hand, I'm sure.

But it's also the way business is done. You outsource manufacturing jobs so that it will make enough of a profit (to be judged by the CFOs, of course) to make it worth selling.

And outsourcing goes both ways. It sends jobs abroad for everyone. And, sometimes, someone else's abroad is you.

vc318

Hmm, I always wondered about that. Isn't the outsourcing abused at some point, though? What's so bad about hiring people right in your hometown?

TheAngel

Well, there's also the simple fact of economics. If you want to get products at cheap prices, outsourcing is the best way to do it, because you can pay people less for more work than you can in countries with a set minimum wage. Then you can charge less but still maintain a huge profit margin. If you brought jobs back to the US, things like manufacturing jobs and the like, then you'd probably have to increase prices because companies are greedy and they want to make billions and billions of dollars and not simply be happy with paying their employees and getting good products to the consumers.

sunnykerr

It's the same thing as accusing illegal immigrants of stealing American jobs. Hometown folks wouldn't agree to working twelve hours a day, six days a week, for a salary of 50 dollars a month with no social benefits. Just like they don't want to work the graveyard shift, cleaning toilets and picking people's trash.

It sucks. But if we want our unemployment rates to go down, we have to look to the creating of real jobs, with our usual standards.

vc318

But now I'm sure that the average American worker would just be happy to have any job at this point just to have some sort of income coming in. I couldn't believe the story I read a while back about the number of people who were fighting for this one custodial position in our local elementary school. People would have never done this a few years ago but now this is the norm. It's a shame that things have to get so bad in the country for people to appreciate what they have whether it might be a job cleaning toilets or working drive-thru. Maybe it's because of the constant complaint from people about how their job sucks that makes these greedy businesses outsource so much.

TheAngel

No, it's the fact that they can send business to China and India and pay employees less than a dollar an hour in some places, they don't have the same safety requirements, they aren't required to give benefits or do anything like that. Outsourcing saves money for manufacturing companies and for things like telephone hot lines and the like. It's basic economics. They save more money outsourcing then they would make moving jobs back to the US to compensate for the difference.

sunnykerr

The thing is, illegal jobs aside, even the most menial and humiliating of jobs in the United States will cost more to the business owner. Because every legal job in the United States is subject to American laws, which means minimum wage, certain benefits depending on the job/employer and certain limits on the kind of work conditions that can be inflicted on the employee.

China doesn't have that, India doesn't have that... many places do not have that.

And so, to cut on costs, they go elsewhere.

But, by the same token, we have a brain drain in Canada of people who are going to the States because there's less taxes on income over there and industries are far less regulated in terms of salarial benefits. And a lot of manufacturing jobs are actually going to American companies as well. Which means, that yes, our primary-resources industry has, in some areas, a fairly steady work force... which, to tell the truth, isn't at all steady right now... but it's all the bottom-of-the-total-pole stuff that's going to Canadians.

Conversely, we are the world's chief exporter of bauxite (needed to produce aluminum), but we need other people to import it. So, we can't afford to piss off our main economic partner.

cookiely

It depends on the industry but in my expirience in most producing industries the salaries are the third largest expense. It s less than you think


that is true, I propably couldn`t afford a Laptop or a MP3 player if they were still made in NA or Europe.


Outsourcing is a hype in the buisness world. For many smaller and medium sized buisnesses outsourcing isn`t profitable, but they still do it because it is the thing to do. Also in China youre patents are
not exactly safe. I can give you the name of serveral absolutely healthy comapanies that went bankrupt when they decided to outsource.

Other companies like Varta and Lego backsourced the production because the produced goods couldn´t meet the quality standards.

well with 50 dollsr a month you can live a quite comfortable life in china. In the US you aren`t even able to pay the electricity bill.

vc318

Then what is the need to reward businesses that outsource? Even if businesses pretend that they have to outsource (I mean, in the end it's to help them and nobody else), why should they get any tax break for doing this sort of thing? Yes, outsourcing is any everyday occurance but isn't this the main reason why employment is in the crapper now?

I guess no matter how you look at it, it's just part of the business life and just happens.

wanderer78

Actually, in India there have been soap operas/mini series and novels that take place in call centres that have less than flattering of the situation. Everyone complains; it's human nature. I complain about my job all the time, but I do it and do it well. And I'd never complain to any of the people we service. That'd be incredibly unprofessional, and I wouldn't dream of doing it.