27-01-2003 10:59									#61
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The theory goes that way, but what's the point when the motivation of moving operations overseas is to cut cost?

Because a company thinks it will help their bottom line. But profits as a % of sales have normally been rangebound in the US between 3.5% and 6%. So the reality in aggregate is that companies pay their existing employees more and hire new employees to develop new markets.

	27-01-2003 11:11									#62
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quote: Who the hell eats cat food, when you can get people food cheaper?!

Soylent Green?

quote: Goods are produced where ever companies can pay workers the least amount of money.

Not true. This only holds for non-skilled labor (or low skilled labor). For high-skilled labor, companies go to the place that the higher skilled people are. Labor productivity is MUCH more important than smaller average wage in determining where jobs go.

If corporations went to where they can pay the workers the least amount of money, the US and Europe would have no one working.

	27-01-2003 14:09									#63
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quote: Originally posted by Imran Siddiqui quote: Goods are produced where ever companies can pay workers the least amount of money. Not true. This only holds for non-skilled labor (or low skilled labor). For high-skilled labor, companies go to the place that the higher skilled people are. Labor productivity is MUCH more important than smaller average wage in determining where jobs go. If corporations went to where they can pay the workers the least amount of money, the US and Europe would have no one working.

They are hiring skilled labor more in other countries where they can find it. That's what the article on the first post is saying.

We still have jobs here. It's just more and more McJobs. Those are the only jobs that they can't move out of the country. True there is still skilled labor jobs, because its hard to find skilled labor like there is in the US.

	27-01-2003 14:18									#64
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quote: Originally posted by DanS The theory goes that way, but what's the point when the motivation of moving operations overseas is to cut cost? Because a company thinks it will help their bottom line. But profits as a % of sales have normally been rangebound in the US between 3.5% and 6%. So the reality in aggregate is that companies pay their existing employees more and hire new employees to develop new markets.

It's just not true Dan. Real wages are going down most years and staying level on other years.

Obviously these companies are moving overseas to increase their profits but in the long run they are not increasing the efficiency of the system so that's why both wages and profits are not growing.

No one has discussed the effect of globalization on the underdeveloped nations. These nations are sacrificing domestic production for exports. That hurts. The jobs that are created don't do much to make up for this. People in those countries are really suffering.

	27-01-2003 21:54									#65
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My january section of my 2003 Desair Inc Demotivators calander is somewhat appropos:

"MOTIVATION
If a pretty poster and a cute slogan are all it takes to motivate you, you probably have a very easy job. The kind robots* will be doing soon."





*or Indians as the case may be.

	27-01-2003 22:01									#66
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quote: They are hiring skilled labor more in other countries where they can find it.

If that labor is actually productive. The alternative for us is to get more productive (in certain areas) to have the companies stay here.

quote: No one has discussed the effect of globalization on the underdeveloped nations. These nations are sacrificing domestic production for exports. That hurts. The jobs that are created don't do much to make up for this. People in those countries are really suffering.

Two words: South Korea. Oh well, one more word: Japan .

By focusing on exports, those countries were able to boom. The workers became more skilled in those areas that the rest of the world prized, and by becoming more skilled were able to command higher wages in the future.

	28-01-2003 00:06									#67
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quote: Originally posted by Imran Siddiqui Two words: South Korea. Oh well, one more word: Japan . By focusing on exports, those countries were able to boom. The workers became more skilled in those areas that the rest of the world prized, and by becoming more skilled were able to command higher wages in the future.

I'm not saying that Japan should not have exported goods to the US. They knew how to produce cars cheaper than the US companies did. Cars are produced cheaper when you produce them in greater quantity. The US benefited from these lower costs too.

But this is only one case, and Japan payed a heavy price for exporting so much. For sometime they have been trying to reverse this way of doing things and have tried to increase their domestic consumption.

The level of domestic consumption is the greatest sign of a good economy. It will also always be there when your exports fall like they did in these Asian countries.

	28-01-2003 00:27									#68
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quote: Originally posted by monkspider I used to be an ardent opponent of globalization, but I have come to realize the reactionary, and ultimately, counterproductive nature of it's detractors. That's to say, I have come to understand globalization in terms of it being a necessary step to worldwide socialism.

Monkspider, could you explain why you or anyone was against globalization? I can fully understand why union workers in first world nations would be against it. Now the trend to move white collar jobs offshore. The affected workers are, of course, ill at ease if not totally pissed. (I think of the highly reactionary Independent party and its nominees.)

Also, if you could, please explain why the move to globalize the workforce is "necessary" for world socialism?

	28-01-2003 00:40									#69
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Ned,

Allow me to answer this one.

The industialized nations of the world increased their level of trade to great levels before the Great Depression. When the world economy collapsed all of the nations suffered. Only nations who did not trade with each other were spared. The ranks of Communists and Socialists grew with each job lost. Germany was in real danger of becoming Communist just before Hitler took power. There were also many new 'band wagon' Communists in the US. World War got us out of the Depression and capitalism was saved.... for now.

	28-01-2003 01:26									#70
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quote: Originally posted by Ned Monkspider, could you explain why you or anyone was against globalization?

I am greatly against globalization until the standards of the rest of the world is the same as ours. Why should we be competeing with a widget factory in country x, where they polute their waters and air, and use 13 year olds that are paid slave labour, while our widget manufactors have to make sure to provide worker safety for George Jetson, as well as make sure to meet our envioronmental standards? How do you compete with someone who has an economic advantage over you in those regards (and I'm not suggesting that we lower our standards, rather that we raise theirs until it's in accordance with ours).

	28-01-2003 01:43									#71
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quote: Originally posted by DuncanK Ned, Allow me to answer this one. The industialized nations of the world increased their level of trade to great levels before the Great Depression. When the world economy collapsed all of the nations suffered. Only nations who did not trade with each other were spared. The ranks of Communists and Socialists grew with each job lost. Germany was in real danger of becoming Communist just before Hitler took power. There were also many new 'band wagon' Communists in the US. World War got us out of the Depression and capitalism was saved.... for now.

I would think, then, that the left should be strongly in favor of globalization. But the anti-globalization demonstrators sure do not appear to be right wing crazies, do they?

	28-01-2003 01:57									#72
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quote: Originally posted by Edan I am greatly against globalization until the standards of the rest of the world is the same as ours. Why should we be competeing with a widget factory in country x, where they polute their waters and air, and use 13 year olds that are paid slave labour, while our widget manufactors have to make sure to provide worker safety for George Jetson, as well as make sure to meet our envioronmental standards? How do you compete with someone who has an economic advantage over you in those regards (and I'm not suggesting that we lower our standards, rather that we raise theirs until it's in accordance with ours).

Edan, it seems that you are trying to put the cart before the horse.

What we need to do, as always, is to improve conditions in the third world. However, if a firm knowingly hires slave labor or kids abroad, I think we should have laws excluding their imports into the US.

	28-01-2003 02:20									#73
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Well outsourcing is here to stay and I am just to be outsourced too or ... but it will stay as the support and quality can me maintained from abroad for a fraction of the cost.

The positive thing is that this will act as a balancer between the nations, that is the third world will become richer, while we will become poorer. Perhaps not so great for us as the difference inporfits will go into investors pockets, but surely good for the people who get the work.

In India my colleagues are paid roughly 10 times less than I am and I am no a 9£ /hr job. So not expensive at all, and they do all of it a in here. Perhaps a bit worse for customer support but all other admin/finance jobs as far as I am concerned they can do as we all we here.

I am actually pissed off with HP (that is where I work), as they are paying them the average there, as if they couldn't up the salary 10-15 % up, to make sure to have people stay longer, and with almost no employee protection laws in India they make them work extemly long hours wiht no overtime pay, and ridicolous shifts to suit UK time even though people were hired for normal working time. Well this is capitalism, if government doesn't help you as a worker noone will, certainly not "supposedly moral" western companies.

That reminds me of BAT (British and American Tobacco) and their subsidiary in Burma where they pay the workers 90pence a day.

And they claim that they pay a competitive rate for the country Would paying 1.50£ hurt their bottom line, if 90 pence is average, and you are probably on the edge of starvation with it £1.50 a day surely will be much better and they could at least claim to pay 50% more than the average. Greedy bastards. Capitalism is just another form of slavery iuf left unchecked.

	28-01-2003 02:40									#74
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I wanted to start to write a small article here, but decided to pass.


The issue here is that raising living standards in the 3rd world, without proper social construct such as birth control in the 3rd, and alternative ways of improving quality of life in the 1st world, is impossible.

If quality of life would continue to be measure only on how much money does one make, the gaps between the rich and poor all around the world will only widen. Therefor, we need to increase the finanacial status of ordinary people all around the 3rd world, while providing ways for people to feel better without the need for money in the 1st world. This is an enormous task.
Another issue is the population growth/economical safety vs. the enviroment: It might sound corny, but things will really start hitting fans in around 50 years if things don't improve ecologically, and that include steming population growth. Yet, if we stem population growth, and continue to have a decapacitated elderly population, we will have a very hard socio-economical crisis.

This demands for increasing research into anti-aging, and real efforts to keep the population healthier, and not just alive, for longer. Then, the retirement age could be raised, so that it would be easier to support the elderly population, while reaching a birth/death equilibrium.

	28-01-2003 02:52									#75
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Well I think a lot is government incentive and economic development. If you have some kind of social structure in the country that you can try to control the population in the extreme like China or slowly like Europe/USA. But there needs to be a social order setup in order to do that. I cannot see how you can do it in India in forseeable future. Still paying the going rate by the corporations here is despicable. I mean they earn 1000£ more a day for 1000 pple working, and if they have spent that 1000£ a day the people would be paid double and what is a 365 thouosand in XY billion of profit? Or in the profit of the division? Nah it is just good ole capitalist principles, "squeeze until they drop their sons will be here to continue".

	28-01-2003 03:09									#76
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quote: Originally posted by DanS This is a good trend. We should shovel as many jobs overseas as possible, especially service jobs to India.

Aren't service jobs usually relegated to those who live near the people being served?

	28-01-2003 03:10									#77
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Azazel, perhaps one cannot raise average living standards without population growth reductions, however, one can certainly raise the living standards of the middle class, well educated India or Chinese, etc., by giving them jobs. This has got to help the third world far more than shipping them bags of corn, which is about all Western governments, as opposed to private businesses, can do.

Jobs will continue to move to India and China so long as they continue to produce well educated, English-speaking people who are willing to work for what to them are "princely" sums (as compared to their fellow citizens), but which are far below comparing wage rates in the West. I for one fail to see how this a bad thing for anyone - except for perhaps the Westerner who job has moved to India or China. But the complaints of displaced labor have been with us forever. This is not a new phenomenon.

	28-01-2003 03:12									#78
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quote: Originally posted by DanS So tell me again how firing an American or Canadian who answers phones for 20$ an hour to hire some Indian living in Calcutta who makes 5$ an hour is supposed to help the economy???? Indians are employed. Indians buy American goods. Americans get cheaper services. American corporations have higher profits. American workers move to higher value trades, where they get paid more.

Except that there's a constant downwards pressure on their paychecks because there are a hundred million other Americans looking for a job too. Net result is that median salary stagnates or falls back, top end goes through the roof...

	28-01-2003 03:16									#79
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Also, think about this - what if we protected the buggy whip industry when cars replaced horse drawn carriages? Industries begin, grow, reach a plateau, then die. Companies that can change survive.

Ditto, labor.

	28-01-2003 03:19									#80
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quote: Originally posted by Frogger Aren't service jobs usually relegated to those who live near the people being served?

Eg... your PC breaks you call customer support - a UK person costs 10£ an hour and a Indian person costs .9 £/hr. Now that is one/ manual admin jobs like invoicing/ simple accounting/ expenses handling/ departmental finance/ everyhing that can be done on a PC only - that can all go to India/China mainly and be done for 1/10 of the cost.

And for the westerner - this will be on the level never seen before, it will actally affect a lot of people as a good % of the workforce works in such "outsorceable" services.

quote: Except that there's a constant downwards pressure on their paychecks because there are a hundred million other Americans looking for a job too. Net result is that median salary stagnates or falls back, top end goes through the roof...

true, you cannot create higher value services where there is no need for one. Pehaps you can employe everyone in a gov job, but what's the point when there is no need, as all the new jobs of the type will be hired overseas for forseeable future. No this will bring a rise in unemployment in the west in the next couple of years, but is the only way to go. It remains to be seen how will the western workers produce higher value goods/services that have to stay in US/Europe

	28-01-2003 03:23									#81
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quote: Originally posted by Ned I would think, then, that the left should be strongly in favor of globalization. But the anti-globalization demonstrators sure do not appear to be right wing crazies, do they?

Well, Socialist are in general against globalization. They don't want to see a collapse of the global economy. Anarchist are definitely against globalization because to the big business it encourages. Communists just look at it as a process, a part of history that can't be changed.

edit: on your other comment there are right wing crazies who are against globalization. Buchanon comes to mind. Not much following though, bit of an odd ball. Still there are some.

	28-01-2003 03:24									#82
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To add a point this will serve as an "equilizer " in the incomes of the west and the countries used. In the same way that the Taiwans/Malasian/east Asian value output grew, and living standard accordingly, because of manufacturing/ so will Indian and Chinas now for services.

IT boom has driven the whole thing now after it is over we will see what will happen next. If nothing happens coupled wiht the economic measures proposed by Bush we might be in to a nasty suprise. Life is a rollercoaster, so is the economy.

	28-01-2003 03:25									#83
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quote: Originally posted by OneFootInTheGrave Eg... your PC breaks you call customer support - a UK person costs 10£ an hour and a Indian person costs .9 £/hr. Now that is one/ manual admin jobs like invoicing/ simple accounting/ expenses handling/ departmental finance/ everyhing that can be done on a PC only - that can all go to India/China mainly and be done for 1/10 of the cost.

Uh...there is such a thing as a phone bill. Never mind the fact that customers don't like talking to people for whom English is a second language.

I've never once called customer service and been connected outside NA, so far as I know...

	28-01-2003 03:28									#84
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quote: Originally posted by OneFootInTheGrave To add a point this will serve as an "equilizer " in the incomes of the west and the countries used.

For workers sure, but I doubt if the overall gap between rich and poor will close.

	28-01-2003 03:33									#85
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quote: Originally posted by Frogger Uh...there is such a thing as a phone bill. Never mind the fact that customers don't like talking to people for whom English is a second language. I've never once called customer service and been connected outside NA, so far as I know...

Maybe not yet but you will soon. In HP UK if you call IT support (local UK number of course) you will be transferred to Bangalore India, where someone will help you and these guys speak well so you might not even notice. (could have been an indian in UK as there is plenty of them here anyway ) There is a lot of cheap available educated people in India.

Or if you are are looking for some other inter-company services many of those have been shifted to India too. I myself was working on the beginning when my first department (inter-company accounting) was outsourced there, and I got to train those guys for three months, as they came here in UK for training. (and they still pay me the same as than I know it sucks, but this is a big company in recession, just the big bosses get pay rises, anyway in a month I expect to be given a boot as this outsourcing project I am working on now will outsource me as well , at least they are flexible and as you can see I can be here a lot ) it is all working there now for two years already without a hitch and they have made a big global department where the people who do the same service (eg inter-company accounting for various world wide entities) sit together and it makes the operation even more efficeint compared to a single person sitting in a regional office doing its thing.

Now this is just an example there are plety more. For a customer, be it inter-company or outside it doesn't matter as they can get the service that they need all from there.

	28-01-2003 03:58									#86
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quote: Azazel, perhaps one cannot raise average living standards without population growth reductions, however, one can certainly raise the living standards of the middle class, well educated India or Chinese, etc., by giving them jobs. This has got to help the third world far more than shipping them bags of corn, which is about all Western governments, as opposed to private businesses, can do.

that's because our governments have a policy of not controlling means of productions. I do agree that creating jobs is the only way. But as faded glory has posted, this lowers the lifestyle of the middle class in the 1st war, that works in the same jobs with a fraction of it shifting to lower paying jobs, subsequently shifting the entire population lower down the scale.

My belief is that by increasing effective taxation on companies, changing the taxation method from profit based to revenew based, we can avoid people from going Inc. just in order to evade tax, and stop punishing companies for being more efficient ( making a profit ). a revenew tax for companies just as for individuals would be more fair, and more pragmatic. with the increase in the effective taxation of companies and high-upper class individuals, who's lifestyle won't effectively be affected, we will be able to suppliment the salaries of the simple workers. This together with cuts in welfare will decrease unemployment, since people would prefer to work and make much more money than they do on welfare.

quote: Jobs will continue to move to India and China so long as they continue to produce well educated, English-speaking people who are willing to work for what to them are "princely" sums (as compared to their fellow citizens), but which are far below comparing wage rates in the West. I for one fail to see how this a bad thing for anyone - except for perhaps the Westerner who job has moved to India or China. But the complaints of displaced labor have been with us forever. This is not a new phenomenon

The westerner is a human being too.

I think that we must change severly priorities in according to managing human resources. I think that the welfare and heathcare system is important, but we should give people more incentives to work ( carrots as well, not just sticks like " if you don't work, you'll starve" ), and much more education to health. More junior sport, more adult sports, more healthy eating. This is not an isoteric subject. the most frequent reason of deaths in the western world is heart related problems. if we create heath through healthy food and lifestyle education to the people, we'll be able to cut down government's health bill.

	28-01-2003 04:01									#87
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quote: changing the taxation method from profit based to revenew based

I don't think that's such a great idea...

Why, again, is it good to tax revenues for a company if the majority of that is lost on costs of production?

Taxing revenues is a bit ridiculous, IMO. And you are right, it probably would discourage companies from going Inc., but I don't see why this is a good thing either.

	28-01-2003 04:15									#88
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quote: I don't think that's such a great idea... Why, again, is it good to tax revenues for a company if the majority of that is lost on costs of production? Taxing revenues is a bit ridiculous, IMO. And you are right, it probably would discourage companies from going Inc., but I don't see why this is a good thing either

If we initate a tax rate low enough (maybe even control the rates for different companies we want to stimulate for different reason):
1) there would be no incentive for companies to hide their profits.
(this would create a problem with hiding reveniews, but if the financial system is transparent enough, this shouldn't be a problem.
2) more efficient companies, due to more streamline work wouldn't be punished.
3) many individuals turn themselves into companies, to pay less taxes. This would avoid this.

Look, I am not saying "**** the companies". as long as no decision on government controlling means of production has been made, the private sector is the economy. taxing reveniews will give government greater powers to push the economy forward. And yes, governments can do this. just look at the slump nowadays. can you see corporations pull the economy out of the slump? They're just trying to minimize losses, and cover their collective asses.

why is taxing reveniews rediculous again?

	28-01-2003 04:28									#89
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There sure would be incentive enough as long as the investors are looking to maximise them for their own pockets.

Taxin revenues would tax companies that make a loss, unless they would be exempt, and favouring the high profit margins on products, companies like Microsoft would be valued even higher as they have ridicolously high profit margins, so they would pay less tax for sure than they pay now. Plus it would discourage them to start new ventures as the new ventures produce revenue but can be loss making operations for years to come, so why would they want to do it if it will give them a tax burden on top of the problems of making it in the market.

So overall this would slow the business dynamic in the west IMHO.

	28-01-2003 04:36									#90
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Thing is that taxation is only one thing that draws investors from one place to another.