IBM and Outsourcing.

Discussion in 'Economics' started by SouthAmerica, Dec 9, 2006.



  1. For the guys in Vietnam is actually an improvement. They have a job now. In other countries, such as those of Latin America, we have jobs that pay more money doing all the IT work... For those who have a career in IT is a great opportunity, it´s helping the per capita income grow quite fast, and we´re starting to get some of the better jobs such as R&D now...
    Is certainly not great for the US, they´re wages are probably going to drop till they level with those of the rest of the world... it´s called osmosis, its a natural process, it´s unavoidable. It happened in Rome, it happened to Spainon, and even to England.

    No empire lasts for 1000 years. The unipolar world of post cold war years is over, several powers are starting to emerge and the United States is realizing they just can´t do whatever they feel like doing {aka... dont go to war without the UN´s approval... you might regret it... next time, listen to France}. Such loss of ground on the political arena reflects on the economy sooner or later and the working classes will be the first guys to feel the effects of this process. It´s a painful process but it´s better for the majority of the population {world wide} at the end of this process you have a better distribution of income throughout the world...

    Regarding education. Going back to college is terribly expensive in terms of time and money, you´re right. But as someone suggested earlier on this thread you can get education at a community college, you just need enough skills to be able to compete, to be able to do something unique, or the necesary skills to set up your own small business, be your own boss. Learn to speak several languages, English is not enough anymore you need to know at least 3 different languages to be competitive nowadays. There are many ways to improve your competitive skills that are much cheaper and faster than going back to college.

    For those guys who want to have a decent living without going to school for 25 years... well there´s plenty of those guys in vietnam and bangladesh... what about them?
     
    #11     Dec 11, 2006
  2. .


    December 11, 2006

    SouthAmerica: Reply to Eusdaiki


    Quoting from my article published on January 2003:

    “I see first hand on a daily basis, when I go to the Labor Department, what is happening to unemployed workers in New Jersey. Two people were evicted from their homes recently. Another person was in the process of his car being repossessed. Three other people have filed for bankruptcy protection under chapter-7. And most of the other people, who have used up their unemployment extensions, are now depleting any savings that they have left for their retirement. These people have no idea how they will be able to manage financially, when they get to retirement age, and all their savings are gone.

    The situation is getting more and more scary by the day, since I see a drastic increase of people who are losing their jobs and coming to the Labor Department to ask for help. The quality of the people unemployed is mind boggling, since 50 percent of today's unemployed have at least a college degree. One of the people that I see at the labor department is a young man 33 years old who graduated from Harvard University, and he also has an MBA from Wharton School of the University of Pennsylvania. He has been looking for a job for over a year.

    For the first time in US history, 50 percent of the people who are unemployed are well-educated people. Does it make any difference if the unemployed people are well educated or if they are blue color workers? You bet it does.

    …So much hype for the American dream, but according to the Bureau of Labor Statistics out of 100 people that start working at age 25, by age 65—1 percent are wealthy, 4 percent have enough money to retire, 3 percent are still working (can't afford to quit), 63 percent depend on Social Security, friends or charity, 29 percent are dead.

    The reality is 95 percent of all Americans by age 65 retire in poverty after working for 45 years or they are dead.

    For the people who are unemployed, the economic depression is already here. For the people who still have jobs, they know that if they lose their jobs it will be almost impossible to find a new job. The difference between past recessions and the current job slump is that the people laid-off in the past would be rehired when the economy recovered. This time around most people's jobs have been gone forever.”



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    The last few years when I heard people such as Ben Bernanke, Alan Greenspan, many economic commentators, politicians and senior officials of the Bush administration saying that the solution for people to find new jobs – after a layoff or a company closing – the magic word is retraining. I hear those guys talking about retraining all the time.

    I used to go to this Labor department center here in New Jersey – for you to participate of that labor department program you had to have at least a college degree. They had various centers here in N J where people could go when looking for a job. The center had a bank of telephones for people to call potential employers, they also had various fax machines and a commercial Xerox machine, and they had a number of computers with various software including Word, Excel, Power Point and so on.

    The center also had seminars about writing resumes, how to look for a job, how to interview, and so on….

    All these computers were connected to the internet and you could spend all day posting your resume everywhere on the internet.

    It did get to a point that the manager of the center had to be honest with us and he told me more than once that there is nothing wrong with your resume – and he told me you have a top-notch resume and professional background.

    Every time I heard about retraining on the news as a solution for the growing unemployment problem – the manager of the center used to tell us that there was no budget for retraining – it was only politicians and media talk, besides he used to say to our group retrain most of you to do what? Since most of us had a heavy-duty background.

    The manager of the labor department center told me that his superiors at the Labor department were aware that the unemployment rate here in New Jersey were a lot higher than the number published for public consumption. Instead of the 5 to 5.5 percent unemployment rate that the government had been reporting the real number were close to 13 percent.

    If all these people with superb resumes were not able to find jobs around the New York Metropolitan area – I imagine how hard must be for people to find jobs in other areas of the country.

    I still laugh when people say that the solution to find a new job after losing your current job for one reason or another – it is retraining.

    Retraining for what?

    On July 31, 2006 The New York Times published a front-page story “Men Not Working, and Not Wanting Just Any Job.” It was a very long article and the article said:

    “…Millions of men like Mr. Beggerow – men in the prime of their lives, between 30 and 55 – have dropped out of regular work…..About 13 percent of American men in this group are not working, up from 4 percent in the late 1960’s. The difference represents 4 million men who would be working today if the employment rate had remained where it was in the 1950’s and 1960’s.”

    I knew exactly what The New York Times articles was saying because I saw many of these people looking for jobs at the Labor department in New Jersey. The ironic part is that most of these people were not considered unemployed by the US government statistics – even though they were going to the Labor department every day to look for a job all these people were classified as “discouraged workers” – a new classification that the Labor department created to reduce the real number of unemployed people.

    The manager of the labor dept. center told me a number of times most of you have solid backgrounds, and many of you used to be managers and senior executives – retrain you guys to do what? To be brain surgeons, nurses, policemen, high school teachers?

    He told me that the Labor dept. was aware that thousands of well qualified people were losing their jobs at Lucent Technologies, AT&T, many drug manufacturers, and so on in New Jersey and there were no new jobs being created to replace not only these thousands of good paying jobs that were being lost, but also the jobs that were being lost to new technologies, and to outsourcing.


    ********


    As you said: “If you´re a middle class US citizen and you are afraid your job might get outsource, you should head back to school ASAP”

    That is not a solution for most people unless you are at that age that most people go to school to get an education.


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    #12     Dec 11, 2006
  3. RedDuke

    RedDuke

    I still can not understand how outsourcing can be good for US. I totally see and hear about wonders it does to India.

    But that whole thing about spreading the wealth is not going to cut in US for a long run.

    Except for electronics and just few other thing all thing in US are getting more and more expensive, and the mid class salaries just do not catch on with higher costs.

    Family of four used to live very comfotably on the salary of one, not happening anymore. That says it all.

    Most of the people are too dumb to realize what is happening, but it is their fault as well. Do not sit and wait for be "sacrificed".

    By the way, I am a strong believer that no other country offers the amount of legal opportunities, to become wealthy, available in US.

    But I still can not understand how oursourcing is good for us either on the short, medium and long runs???
     
    #13     Dec 11, 2006
  4. .

    December 11, 2006

    SouthAmerica: The American politicians, the US mainstream media, and US corporate leaders in general believe that you just layoff people, and it is business as usual. They think as a group that it is the result of the efficiency of our capitalist system and so on….

    Let's outsource millions of good paying American jobs and everything will be O.K.

    And all these fools can’t grasp that there is a major difference between when you are laying off thousands of blue-collar workers and when you are laying off thousands of very well educated people – and "there are major consequences to the system" when the system is treating these very well educated group of people as if they were a bunch of rejects and discard them as they did to other groups of less educated people in the past. (Over 50 percent of the unemployed population in the United States today has at least a college degree)


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    #14     Dec 11, 2006
  5. Southamerica, as usual you made a very interesting and insightfull post.

    I was wondering how could all the problems described in this thread didn't reflect in the unemployment numbers. Now I see it.
    I wonder what the real unemployment numbers for the US look like. I was also buying into the official story of only blue collar jobs getting outsourced... not any more.



    RedDuke. Outsourcing is no good for the US. It's good for everyone else [the vast mayority of world's popullation]. As unpopullar as it might be, trying to stop it is just like trying to hold the tide from coming up.

    Perhaps the way out of this problem for someone who just lost his job and has start eating up his life savings is migrating to another country where he might find a job, or start a small business that will help him survive, and the cost of living isn't so high [he's savings will go much further in such a place]... perhaps mexico?
     
    #15     Dec 11, 2006
  6. Uh, yeah there is a way to stop it...it's called tariffs, and for hundreds of years it has protected the West from the third world. It is obvious to everyone that China and India can do everything cheaper than the US. What has happened in the last twenty years is a moral decay among business leaders and politicians. They are selling our standard of living off, so they can get bigger stock options and bonuses. Ultimately, it is better to pay more for things and have a job. It won't matter how cheaply products can be produced in China, if you don't have a job and can't pay for them.
     
    #16     Dec 11, 2006
  7. thank you Syswiz for your reply. It's much appreciated ! I'm thinking if I take a few classes wont break my bank acct , if it will pay off , who knows . I mean I dont really , for sure . This whole life and decisions in what's the right and wrong way to go , is nothing more than a coin flip to me with 20/20 hindsite. Mary Chapin Carpenter " I take my chances every chance I get "?
     
    #17     Dec 11, 2006
  8. The only thing that tarrifs may acomplish is delaying the problem and making it into a bigger snowball. That and they create inefficiencies all over the market, there's plenty of profits that simply evaporate into death zones when you put tariffs. Besides under the current geopolitical scenario it wouldn't do much good, since it would make US corporations less competitive when selling outside the US, to Europe for instance. For corporations to give you a job profitably they have to be able to export they products and they wont be able to do it if their price is twice that of the japannesse, european, chinnesse and indian competitors. Imposing tarrifs will only worsen the economy.

    For reference read Hersher Ollin's Theorem, the Theorem of dinamic stability of equilibrium, and the work of Friedman, Nicholson, Stiglitz, just to name a few.
     
    #18     Dec 11, 2006
  9. Can anyone see the the day coming when that big shiny new fence along the southern border prevents you from visiting your:
    accountant
    doctor
    dentist
    lawyer
    auto service.........you name it.

    Hell, there will be nothing left to do but stay at home and cut the lawns. maybe throw in a little gardening for fun.
     
    #19     Dec 11, 2006
  10. Want a high paying job that will never get outsourced? Become a lawyer. In san diego, they are making a killing. The attorneys will never allow their jobs to get outsourced. Any company that tried that would get sued to oblivion. One of the few desk jobs that has built in protection.

    syswiz is right. Only go back to school for something that will actually get you a good paying job that wont be outsourced.
     
    #20     Dec 11, 2006