Outsourcing Good for Economy?

[wolfie]

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?

What this misses is that (taken from the perspective of society), money isn't something that's gone once it's spent. Guy working on the assembly line takes his wife to a fancy dinner. Restaurant owner gets his porch rebuilt. Carpenter goes for a haircut. Barber orders a pizza. Pizza delivery guy replaces his car.

The money keeps recirculating (and generating prosperity) until something is done to take it out of the system - that's the premise behind "social credit" (William "Bible Bill" Aberhart, Alberta during the 1930s). Outsourcing may lower the price tag a bit, but it takes money out of the national economy.

Would you rather pay $200 for a foreign-made electronic gadget while earning $10/hour in a service-economy job, or pay $300 for one made domestically while earning $20/hour on the assembly line (thanks to the guys who make that gadget buying the products your employer makes)?

[jackfaire]

Outsourcing can be good for the economy.

Sending jobs overseas isn't usually.

Outsourcing means that a company contracts a job out to another company.

For example Company X in NYC needs a customer service department they look at the cost of running one in New York and decide what they would have to pay people just so that the employees could afford the rent on a New York shoe box is more than their budget allows so they outsource the company Customer Service to a third party company located in Nebraska.

This guy's argument is that sending jobs overseas is good for the economy which makes him a moron. Sending jobs overseas to lower consumer costs only works if only a small fraction of the companies in America are doing it and only if they are producers of big ticket items.

Also it only works if the savings are actually passed on to the consumers.

Honestly how many times have you seen a company send manufacturing out of the country and then seen the price of the item you were buying from them decrease accordingly. Chances are you didn't.

[Dreamstalker]

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.

And/or start whining about how they "can't find qualified workers" and go back overseas, or pay off their favorite lawmaker to get them some more H1B workers (who don't have the actual skills).

[crashhelmet]

Outsourcing can be good for the economy.

Sending jobs overseas isn't usually.

Outsourcing means that a company contracts a job out to another company.

For example Company X in NYC needs a customer service department they look at the cost of running one in New York and decide what they would have to pay people just so that the employees could afford the rent on a New York shoe box is more than their budget allows so they outsource the company Customer Service to a third party company located in Nebraska.

This guy's argument is that sending jobs overseas is good for the economy which makes him a moron. Sending jobs overseas to lower consumer costs only works if only a small fraction of the companies in America are doing it and only if they are producers of big ticket items.

Also it only works if the savings are actually passed on to the consumers.

Honestly how many times have you seen a company send manufacturing out of the country and then seen the price of the item you were buying from them decrease accordingly. Chances are you didn't.

Interstate Outsourcing still has much of the same effect. While it's not completely killing off some industries, like manufacturing, it kills the local economies and jacks up the unemployment rate. it might help build the economy in that new area, but then it's not long before it's killed off there and moved somewhere else.

Silicon Valley used to be where everything was done with computers and related technology. The wireless division picked up and moved to San Diego and South Orange County. Call center jobs started moving to Texas, Arizona, and over seas. When the cost of living started getting to high there, they started moving the jobs to here in Vegas, upstate New York, or the Florida Panhandle. Jobs are still going overseas and some are even going to Canada and Mexico.

We're robbing Peter to pay Paul in this country instead of growing as a whole

[insertNameHere]

Consider this, most people have no idea that they can't constantly use credit cards spending money they don't have and probably never will.... Do you really expect them to grasp the concept that outsourcing is bad?

[jackfaire]

Interstate Outsourcing still has much of the same effect.

Interstate outsourcing is why many of the people I have worked with at many of the outsourcers I have worked at could afford to go back to school get a degree and get a better job. Without them the unemployment rate in my area would be higher and I would be stuck flipping burgers with no hope of ever getting anything better.

Also Interstate outsourcing is usually done by companies that are already national ones so they already direct hire people all over the country. Outsourcing parts of their operations to third party companies allows them to keep costs low because they can hire a small company that can run a call center more cheaply since that is all they do.

Some companies like utility companies outsource call centers in their immediate area. Thus the money for the jobs is going into the same economy but it is costing them less.

[crashhelmet]

Interstate outsourcing is why many of the people I have worked with at many of the outsourcers I have worked at could afford to go back to school get a degree and get a better job. Without them the unemployment rate in my area would be higher and I would be stuck flipping burgers with no hope of ever getting anything better.

Also Interstate outsourcing is usually done by companies that are already national ones so they already direct hire people all over the country. Outsourcing parts of their operations to third party companies allows them to keep costs low because they can hire a small company that can run a call center more cheaply since that is all they do.

Some companies like utility companies outsource call centers in their immediate area. Thus the money for the jobs is going into the same economy but it is costing them less.

Until that company picks up and moves again in yet another attempt to cut costs. Then your friends are left unemployed with $60k in student loan debt in a local market currently saturated in available workers. Those that were able to find another job in their field are now making considerably less because the "supply" of workers is now larger than the "demand." Instead of making $15 per hour, they're making $11.

I have friends here in Vegas that were in successful IT careers and are now driving cabs, waiting tables, or still unemployed because their jobs were sent somewhere else.

While that might have improved the economy in Jamestown, NY, it was only shortlived as the company we outsourced to decided to move their entire branch to the other side of the US-Canadian border. Hundreds of jobs in a small town were now gone.

[PepperElf]

He also says that Obama's attack's on Romney's outsourcing are unfounded for these reasons.

This part made me laugh. Mainly cos... iirc one of obama's own czars did just that, outsourced most of the company to china.


although my biggest issue with outsourcing is that... people complain about losing their jobs to foreign markets
then they turn around and buy from companies that support outsourcing.


yes some local markets may benefit from having employees being paid to serve at those stores. but ... is it enough to offset the loss of industry?

[protege]

although my biggest issue with outsourcing is that... people complain about losing their jobs to foreign markets
then they turn around and buy from companies that support outsourcing.

...and then there are those that turn around and bitch when prices go up if things are made here. Well, considering that labor is expensive...what do they expect?