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Old 05-09-2009, 02:47 AM
 
Location: Conejo Valley, CA
12,476 posts, read 16,969,159 times
Reputation: 4304

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Okay, I looked at a few comments... Plenty of gross distortions of fact and theory...

Quote:
Originally Posted by coldwine View Post
Nothing has gotten cheaper, I agree. Clothing, regular non name brand clothing, is more expensive now than ever. It's great for businesses, but it's clearly a model of greed.
Nothing has gotten cheaper. Really? nothing? Gee, I seem to remember when computers were thousands...now they are hundreds. Wait, most electrics are cheaper now! And clothing is more expensive now than ever, except that its not. Clothing is cheaper today than it was in 2000 (Apparel is part of the CPI and is rigorously tracked).

Its all a bunch of fictions a rent-seeking working class likes to create.

Lower end costs has ironically been one of the benefits of out-sourcing.

Quote:
Originally Posted by coldwine View Post
What happened instead is that retailers and wholesalers jacked up their prices to gain even more money, thus greatly disturbing the economy.
Ugh. You guys think there is a trillion dollar check on the table! If the prices were truly "jacked up" what would stop another businessman from stealing everyone's business by offering marginally lower prices?

Quote:
Originally Posted by sterlinggirl View Post
If you're trying to grow India's economy, you can outsource labor while you watch your neighbors struggle to keep a roof over their head.

If you would rather see your family and friends prosper than people halfway across the globe, then you shouldn't outsource.
The only way you can out-source is if the other country has dollars. How does another country get dollars? Oh yeah, by buying something (directly or indirectly) from our country.

Almost everything that is being said here is based on a completely different world, namely one which has a gold standard (or commodity based money system in general). Its quite frankly just inaccurate gibberish with respect to the actual global money system.
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Old 05-09-2009, 04:00 AM
 
1,020 posts, read 2,208,798 times
Reputation: 539
Quote:
That is why in the past most of the manufacturing was done in the mid-west where costs where cheaper than the coasts. Uncle Sam still takes in the tax revenues through uniform federal income taxes. This kind of outsourcing where there is a level playing field results in "specialization" (which is the "efficiency" your referring to) and thus each State had certain sectors of the economy that they are better at (ie, agriculture in the central plains, and knowledge based activities in the population centers).
Precisely! I get tired of the argument that other nations can manufacture more efficiently. Well, if there are a dearth of regulations (environmental, labor, and human rights) on the books, then of course they can operate with little trouble! I'm glad someone gets the true meaning of specialization in relation to macroeconomic relationships and not just the microeconomic level.
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Old 05-09-2009, 05:04 AM
 
12,870 posts, read 12,772,010 times
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Quote:
Originally Posted by elamigo View Post
International trade is business where people and organizations trade commodities. Commodities does not only mean gold or a shirt. It also means labor for something.

In Killer's case he or she, sorry I do not know your gender, is outsourcing part of the labor outside. He or she is still creating business with the rest of his or her opperations.

I am currently taking a class entitled "Current economic analysis" in my MBA program I am attending.

We just covered international trade. At the end of the last class the professor made a comment. He said we covered a topic a lot of people simply do not understand and it is heavily influenced by politics. The people tend to fall for what they hear from politician have no idea how the international trade business works.
By enforcing protectionism people do not realize how the equilibrium between the supply and demand is broken and actually the customer ends up paying more. With protectionism those protected groups fill their pockets with money (because of higher prices) and those that would benefit with trade end up hurting and the customer as I wrote ends up paying higher prices.

In the business world where trade is allowed, some people will loose profits and/or jobs and other will gain profits and or job HERE in the US. The weather in the business world changes with constant changes of needs thus the demand for a commodity. The customers needs do change thus trade demands change, thus jobs tranfer from one group to another.
If we want to make sure no one looses a job we simply need to always eat the same, drive the same car, buy the same brand, etc. In other words live life exactly the same with not a speck of variation to maintain an exact demand out there. Even then a simple tornado can create havoc and maybe potatoes are not available anymore for a while so we may have to switch to something else to serve in our meal and that in turn will mean jobs are lost somewhere and created somewhere else.

You have a great day.
El Amigo
has your professor considered the possibility that wages would be higher in the united states if we did not constantly outsource, so it would be easier to pay more for goods here? the trade imbalance we have is what is hurting the united states as we have gone from being a creditor nation to a debtor nation, so clearly that role model does not work for us. our end product is that our jobs are disappearing and our currency is devalued. our government seems to think that they can put everyone on the government payrole to keep the numbers from deteriorating faster but clearly that is a model that won't work either because the taxes come primarily from the private sector, not the government sector.
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Old 05-09-2009, 06:02 AM
 
1,735 posts, read 4,137,264 times
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Quote:
Originally Posted by killer2021 View Post
I run a small online business that sells education and information products. I outsource nearly all of my labor needs which consists mostly of doing research and writing. We plan out what we need to be done then allocate that workload to various people in India. They only get paid if they do good work. If the work is not what we want or up to our standards, we send an e-mail telling them what needs to be changed. Once fixed, we pay them.

If I wasn't able to outsource my business would have probably never been able to make it. By having the ability to outsource my cost of business is 20-30 times lower than if I were to have the work done in the USA.

As a result, my business is significantly more competitive compared to other people delivering similar products to the market. If I couldn't outsource the work my business would have never made it. Also it would take me significantly longer to bring products to the market (because I would have to use more expensive labor or do it myself).

Instead of complaining about outsourcing and trying to prevent it. We should allow people to utilize it in a better fashion. If something could be done for 1/10th the cost of labor in another country and do just as good a job then we should send the job over there and use the money we saved to reinvest in the company or deliver better service to clients.
You better save your ill gotten gains, because when your competition is forced to do the same you will out of business.
You shouldn't be in business if you have to cheat on your competition in order to be competitive.
I think of the employees of the competing companies when I hear of people like you that are too incompetent to know how to compete on a level playing field and are all too willing to ruin the game for everyone else.

Last edited by RedNC; 05-09-2009 at 06:15 AM..
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Old 05-09-2009, 06:13 AM
 
1,735 posts, read 4,137,264 times
Reputation: 1436
Quote:
Originally Posted by user_id View Post
Okay, I looked at a few comments... Plenty of gross distortions of fact and theory...
Nothing has gotten cheaper. Really? nothing? Gee, I seem to remember when computers were thousands...now they are hundreds. Wait, most electrics are cheaper now! And clothing is more expensive now than ever, except that its not. Clothing is cheaper today than it was in 2000 (Apparel is part of the CPI and is rigorously tracked).
Process, technology and productivity improvements are responsible for the lower costs on computers and electronics, not labor costs. Most of the components for computers are done with machines and those running them are paid about the same overseas as in the US. The only difference is the US worker isn't benefiting any more.
The US consumer is good enough to buy their products, but not good enough to make it, that's the problem.
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Old 05-09-2009, 09:36 AM
 
3,748 posts, read 7,210,050 times
Reputation: 4825
One of the naive comments (or outright lies) that frequently comes up is that there are not enough qualified American workers. According to this news report, US colleges produce 300,000 engineers and scientists each year while industries need to fill about 120,00 engineering and science jobs. There are more than enough American workers to fill the jobs.


YouTube - Lou Dobbs: H1B visa scam hurts American college grads


In the same vein, another dumb comment is that American workers should adopt by getting more education. The news report above already shows that the US has more skilled workers than jobs. What else can we adopt? Move to Canada illegally and steal jobs from the natives like our other neighbors do to the US? Even if we could, they won't put up with it.

I talked about the tax base earlier. Without employed people, there is no tax base. Except for those who outsource local jobs, everyone else suffers when there is no tax base. Without adequate tax revenues, the government make up for it by raising taxes elsewhere like car tax, property taxes, gasoline tax, etc.

Yes, it's good for those who outsource local jobs. No, it's bad for America, if that matters to you. For those who oppose the outsourcing of local jobs, voicing your opinions to your government representatives is still an effective way to combat this terrible practice.

Last edited by davidt1; 05-09-2009 at 10:28 AM..
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Old 05-09-2009, 09:39 AM
 
Location: Chino, CA
1,458 posts, read 2,898,182 times
Reputation: 546
Quote:
Originally Posted by RedNC View Post
Process, technology and productivity improvements are responsible for the lower costs on computers and electronics, not labor costs. Most of the components for computers are done with machines and those running them are paid about the same overseas as in the US. The only difference is the US worker isn't benefiting any more.
The US consumer is good enough to buy their products, but not good enough to make it, that's the problem.
Thank you RedNC,
And I was about to say the same thing about technical advancement and why electronics have gotten cheaper. I thought user_id would see this since he's a strong proponent of technology, automation, and AI.

On the other hand, if you look at CPI, consumer prices have gone up pretty consistantly over the last 30+ years (trade imbalance since the 70s). So, if the companies are really "saving" 30, 40%+ percent on labor as the oursourcers perport, then CPI should be negative or flatline but as we can see, it has not.


United States Consumer Price Index - Wikipedia, the free encyclopedia

Anyhow, like many have argued, the labor cost discrepancy is a short term advantage. The thing with developing nations and people pumping billions of dollars into them, it results in a lot higher rate of inflation than the likes of here. So, you have to take wage inflation, initial capital costs, and other costs into consideration when considering outsourcing.

True user_id, the fact that we trade with "dollars" means that eventually the dollars would come back here. But, the fact that we have a trade imbalance means that the dollars are not coming back in the form of purchasing goods and services from the US. They are either being horded or transformed into "interest" bearing dollar vehicles (bonds, investments, etc., ie a loan to the American government, businesses, and peoples).

-chuck22b
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Old 05-09-2009, 12:17 PM
 
Location: El Paso, TX
3,302 posts, read 3,755,085 times
Reputation: 2524
Quote:
Originally Posted by floridasandy View Post
has your professor considered the possibility that wages would be higher in the united states if we did not constantly outsource, so it would be easier to pay more for goods here? the trade imbalance we have is what is hurting the united states as we have gone from being a creditor nation to a debtor nation, so clearly that role model does not work for us. our end product is that our jobs are disappearing and our currency is devalued. our government seems to think that they can put everyone on the government payrole to keep the numbers from deteriorating faster but clearly that is a model that won't work either because the taxes come primarily from the private sector, not the government sector.
We have become more of a service economy. Service is a commodity also. A service can be traded with another type of commodity we may not produce anymore like let us say some type of appliance we may not produce as we used to. When we stopped producing that type of appliance someone will loose jobs. There is not doubt of about it. However, the opportunity for a different type of job is created. The problem we have is that our education system starting to produce less people with better education. Actually, we are starting to import education. Many foreign students that were educated here do stay here because we do not graduate enough young men and women. We have changed in some ways that affect how we educate our children. Our education system reflects the poor results we have. Companies have complained we are not producing enough educated young men and women. Instead they are hiring foreign educated people either by outsoucing or with people that have the education needed.
The model does apply. Trade does happen in different forms, not just bread for wine. Trade can happen by brain power and appliances too. That will not change. To me the only that can change is by disbanding laws and unions when they result in making labor here more expensive and less competitive. Now, if people want to demand protectionist methods, there will be repercutions from other countries. We cannot isolate ourselves. Open markets between the countries work when nations specialize and trade.

You have a great day.
El Amigo
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Old 05-09-2009, 12:26 PM
 
6,997 posts, read 6,632,415 times
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We have become more of an asset-based economy. If not for equity extraction from residential real estate and financial assets, we would've had negative GDP growth the last fifteen years.
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Old 05-09-2009, 12:37 PM
 
Location: Jersey
2,162 posts, read 3,235,952 times
Reputation: 1680
Quote:
Originally Posted by RedNC View Post
Process, technology and productivity improvements are responsible for the lower costs on computers and electronics, not labor costs. Most of the components for computers are done with machines and those running them are paid about the same overseas as in the US. The only difference is the US worker isn't benefiting any more.
The US consumer is good enough to buy their products, but not good enough to make it, that's the problem.
Reality says otherwise!!!
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