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Was: last off topic, sorry.... Now: Is this really off-topic if it affects your potential earnings?

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Bill Polhemus wrote:
I repeat: Free Enterprise/Free Trade is both inevitable and expansive. EVERYONE benefits. There's no such thing as "trade" that benefits only one side, or is extremely lopsided. If both sides don't benefit sufficiently, the transactions end.

People here who whine about "jobs for America" are showing complete ignorance about economics. This is the sort of ignorance that politicians capitalize on as they pander for votes as "protectionists." This means both the so-called "paleo-cons" (who are somewhat "paleo" in that they have been around since before the U.S. was the U.S., but they AREN'T conservative, at least in the current sense of the term) and the radical pro-Unionist liberal Democrats.

I will NEVER forget how in the late 70s and through the 80s, "Japan, Inc." was supposed to "bury" us. Hm, wonder whatever happened with that? Got a clue?

Here is a simplified summary of your assumption - in real terms:
  • Everyone benefits from the lower prices obtained by companies like Walmart who outsource their labor for the packaging of goods and the assembly processes to countries where wages result in higher earnings and lower prices here In the US.
  • I really don't understand how you can throw around labels like "Paleo-cons" or "Radical Pro-Unionist Liberal Democrats" or "protectionists". The only word here that I can relate to is Protectionist and unless we are dealing with fair competition, then I am proud to be a protectionist.
The trouble with your argument is that you focus on the low price of the end product, and refuse to recognize the sacrifice that American workers have to make. Let's put it in terms of engineering fee's. If the architect that owed you $600.00 decided that he will no longer give you work because he can inflate his profit margin by outsourcing engineering to countries where he pays $3.50 per hour to obtain the same work that you provide? The result of this becomes obvious:
  • You can not make your mortgage payment because of the loss of income.
  • You are forced to compete against lower fees because nobody really cares about protecting US Jobs - if it is a larger company with investors, they only are concerned with earnings and are willing to do whatever it takes to maximize profits and satisfy investor earnings at your expense.
A recent article in the Washington Post notes the dissatisfaction that Americans have with IBM (and other companies) who outsources their technical support to New Delhi. The article is from the March 7-13 2005 edition "An Earful of Ire from Americans" by Rama Lakshimi (page 18). Nearly 25% of the callers are dissatisfied with the service. The technicians are trained and they are polite, but there is a language problem as the technician does not understand the idioms we use daily. On a side note, when I threatened to buy my computers from another source, a Dell Customer Service Supervisor almost laughed at me and told me I had not choice as there were no tech companies that were not outsourcing jobs to India and laying off workers in the US because of the obvious earnings gain. Back to IBM! The callers were even told by the technician that they were of Indian decent but that they were calling from the United States (when in fact they were answering calls in New Delhi). They made up simple American names "Tim", "Jim", "Juli" etc. The told the caller they were in the state of Washington and their employer went as far as to post an electronic board in their office that indicated the weather, time, current sporting events and records that existed in order to try and convince the caller that they were in the U.S. - but the problem was most Americans did not buy the lie. Again, on the side - I received a bill from a doctor and when I called about the bill (which was 40% higher than the previous statement that the insurance company was suppose to pay) I found that my local doctors were outsourcing their billing and bookkeeping services.
The article states "the outsourcing industry earns $5.1 billion a year and employs more than 350,000 people, according to the national Association of Software and Services Companies, and is projected to grow 40% in the coming year." This figure includes companies such as "American Express, Sprint, Citibank, General Electric, Ford, Hewlett Packard Electric, IBM and firms that process U.S. tax returns and welfare benefits."
  • $5,100,000,000 / 350,000 people = $14,571.43 per person average.
  • $14,571.43 / (52 weeks * 40 hours) = $11.21 per hour per person gross company earnings.
  • Assume the company makes 50% of the income (American engineering firms usually bill at 2.5 times cost, but lets assume this is billed only as 2 times earnings). Each employee is working for around $5.60 per hour. If they bill at 2.5 times cost then the employees average $4.48 per hour.
  • However, management earns more than phone techs and this average needs to be adjusted.
So, now Bill you are saying that American's should sacrifice their jobs doing the same work that will be outsourced to another country for $5.60 per hour. Now assume that you are dealing with an educated engineer in India who is capable of providing the same quality of work you do but the Architect need only pay $5.60 per hour while he bills his client 10% of construction cost for the project. If you are worried about errors, in California, the Architect can not be litigated for outsourcing and receiving inadequate results unless there is a failure that results in the loss of human life and then the Architect is the first in line to be sued. Do you think that International tribunals will win a case against a 3rd world nation for doing a sub-standard design job even though they received a permit for the work?

To put it in perspective, you fail to recognize the sacrifice of those who:
  • Can no longer keep up payments for the mortgage on their home
  • Automatically becomes a risk as they try to pay off credit card loans by paying only minimums because they lost their job.
  • Now your family is forced to buy the lower priced goods that come from China because you no longer have a choice - you can't afford to spend any more for toilet tissue.
  • Your personal information including credit card debt and tax returns are now in a country that does not recognize your privacy and can, at their discretion, distribute your personal information or sell their list.
I think you need to get your facts correct, because the next job lost to outsourcing might be yours. If you are lucky to slip by the think of your children and their children as to how difficult it will be for them to have ownership in this country when the upper income community is benefiting from the increased earnings on their investment without ever getting their hands dirty.

Finally, other areas in the world are being prepared for low cost labor. What India and China does not understand is that if these companies can walk out of the United States to find cheaper labor, they can walk out of India and China when their economy escalates to a standard of living competitive to us. They will fall in the same pit when jobs are lost and the "security" that you expected in a job is now in the pocket of a "rich conservative elite."



Dennis S. Wish, PE
California Professional Engineer
Structural Engineering Consultant


760.564.0884 (office - fax)

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