Outsourcing Good for Economy?

[guywithashovel]

http://www.dispatch.com/content/stor...-benefits.html

This Op-Ed piece by David Harsanyi was in the paper this morning. Basically, he makes the case that outsourcing has many benefits, such as lower prices for consumers who will take advantage of those prices and stimulate the economy with their spending, among other things. He also says that Obama's attack's on Romney's outsourcing are unfounded for these reasons.

I posted this because I haven't heard this argument before. Comments?

[bara]

Id like to see where this guy is getting his numbers from. Because all of his examples seem to be made up from my perspective.

[Andara Bledin]

If you outsource everything, then nobody here will have money to buy whatever it is you outsourced, which seems to not be considered most of the time. People without jobs don't have funds, and people without funds don't buy product.

Yes, outsourcing can lead to lower costs, but when you realize that most Asian factories have inhumane practices when it comes to their employees, you have to wonder just how many errors that pushes into the supply. Everybody knows about Hon Hai (aka Foxconn), but there's another one in the news right now that makes Hon Hai's policies look extremely favorable by comparison. VTech's practices show that Hon Hai isn't nearly the worst and makes you wonder who else was not investigated while everybody dogpiled Apple's supplier because it's trendy to hate on Apple.

^-.-^

[crashhelmet]

Exactly... Outsourcing takes away jobs from people here. If they have no income, they have nothing to spend. That lack of spending causes companies to outsource more to reduce their own costs and increase their profits that way, or eliminate positions altogether. It's a downward spiral.

Instead, companies should be keeping jobs here and concentrating on investing back into their own company to reduce costs that way.

[telecom_goddess]

Yes, outsourcing can lead to lower costs, but when you realize that most Asian factories have inhumane practices when it comes to their employees, you have to wonder just how many errors that pushes into the supply. Everybody knows about Hon Hai (aka Foxconn), but there's another one in the news right now that makes Hon Hai's policies look extremely favorable by comparison. VTech's practices show that Hon Hai isn't nearly the worst and makes you wonder who else was not investigated while everybody dogpiled Apple's supplier because it's trendy to hate on Apple.

^-.-^

It's great that all these articles are coming out for awareness and all but is anything actually being done to ...I don't know...STOP it? I could never live and work that way. I'd run away or something first. It sounds miserable.

As for outsourcing I never believed in that. Product should be made locally by local people, and then we can do importing/exporting after that to stimulate economy everywhere.

[bara]

One of the causes is investors being short sighted. They want to make large returns but dont want to wait for it. So they find ways of cheapening labor while closing their eyes to the long term effects of shipping all our jobs some where else. Sure they are still making money, but as has been stated the people they are selling to are more worried about making rent this month rather than buying whatever product they are trying to sell.

[Andara Bledin]

It's great that all these articles are coming out for awareness and all but is anything actually being done to ...I don't know...STOP it? I could never live and work that way. I'd run away or something first. It sounds miserable.

You have to realize what the conditions are in places where shops like that exist: it's not the worst option out there, which is, in and of itself, scary.

The difficulty with regulating and holding these places accountable is that if they have any warning at all, they "clean things up" for the benefit of inspectors. In the case of China, they've got more people than they know what to do with so they devolve to a "plenty more where they came from" mentality.

In an interesting experiment, Google is having one of it's devices engineered and built in the US. It is priced accordingly; now it remains to be seen if enough people actually care about the human cost of their gadgets or if price really is king.

^-.-^

[BlaqueKatt]

In an interesting experiment, Google is having one of it's devices engineered and built in the US. It is priced accordingly; now it remains to be seen if enough people actually care about the human cost of their gadgets

nope, bystander effect, "someone should do something, but I'm to busy", See also, bitching about tipping waitstaff("they should get a real job", or, "they should be paid a living wage"), the DeBeers Diamond Cartel("I have a non-verifiable piece of paper that says MY shiny rock isn't a conflict shiny rock"), death rates from HIV in Africa("they're overpopulated anyway") and slacktivism("oh look I posted on facespace!"). As long as it's someone else in a far away place people just don't care.

Mass genocide=meh
higher gas prices=OMG DO SOMETHING!

Even if gas prices rise because the ruling class of x country is committing genocide, they only care about the gas prices and don't give a rats patootie about the genocide.

And thus concludes the summary of why I dislike most of humanity....

[Dreamstalker]

Yikes, I hadn't seen that article (I'm sitting here looking at our phone which is a VTech).

I can't see any way that outsourcing is good (like crashhelmet said, if people don't have money they can't buy the products)...although I guess buying the same widget 12 times because each one falls apart after a year could be considered 'good' I have no doubt that most if not all of what we currently import can be produced here. Yes, prices would be higher, but it would be a sustainable system/vastly help the economy.

In the IT sector companies can get someone overseas who will work for pennies, so the competent workers in the US are seen as 'entitled' if they dare to ask for a livable salary (I've seen job postings paying $25K for a skillset that commands $50K).

[smileyeagle1021]

outsourcing actually can be beneficial... if we had a surplus of demand and a limit of supply, then it only makes sense to outsource the lower margin production to other countries that will allow us to meet our demand then it is incredibly beneficial... everyone wins, we get lower cost because we've eliminated a scarcity, we have better jobs overall here because the low margin products are now being produced elsewhere, and with higher margin can come higher wages/benefits, and the country we outsourced to wins because they now have jobs that otherwise would not be there.
the problem is that we don't have a scarcity in North America, so truly every job we create in China is at the expense of a job in North America.

[Andara Bledin]

the problem is that we don't have a scarcity in North America, so truly every job we create in China is at the expense of a job in North America.

Or three. After all, you can't work people in the US sick with impunity like you can in some other countries.

^-.-^

[Dreamstalker]

The problem comes with the mindset that product X produced in China is 'better' simply because it's cheaper. The money saved by corporations here rarely goes back into the economy, at least not in a meaningful way.

Certain types of IT outsourcing can only end in disaster, methinks.

[protege]

The problem comes with the mindset that product X produced in China is 'better' simply because it's cheaper.

Yep, and in many cases, you get what you pay for. Unfortunately, a lot of things made in China...are shit. I've had to return too many tools or mess with too many model locomotives made there. They're just not built to the same specs. For example, I just returned a nut-cracker. I'm in the middle of rebuilding the suspension on my car, and had to remove a seized nut. 43 years of corrosion meant that it wasn't coming off its respective bolt. Anyway, I put the nut-cracker in place, tightened it up with the wrench (as you tighten it, a wedge is driven into the nut, breaking it)...and then saw that the 'cracker broke itself. Very first time that I used it! That went back to the store, and I didn't get a replacement. Sorry, but if I'm purchasing something, it better damn well do what it's supposed to.

In that case, outsourcing would be bad. Not only did I have to return something--which delayed completing the job--but I'm sure the store I returned it to took a hit as well. Not just an economic hit, but a blow to the reputation as well. Think about it, if you're in the business of selling tools...how devastating would it be if it became known that some of your items were shit? I'm probably not going to return to that store, nor will I buy another product from that manufacturer.

Same with my model locomotives. Nearly all of them are made overseas now. Some are quite good, others are junk. In fact, I remember when one of the biggest names in model railroading...decided to move production offshore. First shipment of locomotives received, were shit. Sure, they looked nice, but problems with bad motors and cracked gears were rampant. Neither problem is forgivable when you consider what those engines sold for new!

At least the fixes were relatively simple--fit a set of Athearn (domestic manufacture) wheelsets with integral gears less likely to crack...and secure the motors in their chassis properly. But still, the damage to the "big name manufacturer" is already done. Just about every model-railroading message board, and even some of the magazines, have mentioned the problems. Problems, that really shouldn't have happened in the first place! Oh well, at least it keeps prices down, since I can rebuild used units cheaply

[mikoyan29]

While we hear about all the jobs that go overseas, we never hear about the flip side where companies get fed up with the lack of quality and quietly move those back here. Well in the meantime, they get to pay lower wages here because people are grateful to have jobs back. The only reason this hasn't happened with China is because the Chinese government is very good at keeping wages low...but that's not going to last forever...

[MadMike]

If you outsource everything, then nobody here will have money to buy whatever it is you outsourced, which seems to not be considered most of the time. People without jobs don't have funds, and people without funds don't buy product.

And this, I believe, is a huge part of why the economy went in the shitter a few years ago. I'm probably more of a "big picture" type of person than most people, and I predicted the downward spiral. The company saves money buy sending jobs overseas. Maybe they lower prices, but they probably don't. The people who lost their job can no longer buy the company's products. The company starts losing money. They start laying people off, which results in even more people not having money to buy products. It's amazing how short-sighted some people are.

As for the idiot who wrote this article, I hope he finds his job outsourced. It would serve him right.