Lightningbolt wrote: Anyone have any ideas on curbing outsourcing product manufacturing to other countries?

Why would you want to do that?

Outsourcing manufacturing was one of the best things to happen to this country.  And the rest of the world as well, for that matter.

Rambino wrote: Lightningbolt wrote: Anyone have any ideas on curbing outsourcing product manufacturing to other countries?  Why would you want to do that? Outsourcing manufacturing was one of the best things to happen to this country.  And the rest of the world as well, for that matter.

I don't accept that as being anything good for the long-term.  Sure it's good for the profit magin for a CEO but how is it helping the 500 workers that lost their jobs?

Lightningbolt wrote: Rambino wrote: Lightningbolt wrote: Anyone have any ideas on curbing outsourcing product manufacturing to other countries?  Why would you want to do that? Outsourcing manufacturing was one of the best things to happen to this country.  And the rest of the world as well, for that matter. I don't accept that as being anything good for the long-term.  Sure it's good for the profit magin for a CEO but how is it helping the 500 workers that lost their jobs?

True, but pushing to buy American made products to hurt outsourcing makes consumer prices skyrocket. No longer can we buy a t-shirt for $10, now we have to pay for the $50 American one.

Lightningbolt wrote: I don't accept that as being anything good for the long-term.

It's econ 101.  Actually, it's older than that - it's chapter 1 of Wealth of Nations.

Let's say you are a carriage maker.  To make carriages you need planks and nails and metal bands.  You are capable of making each of those yourself.

After breaking down how much time it takes you to perform each task, and figuring how much money you make for selling your finished carriages, you determine that you make $15/hour for time spent working on the parts and the carriages

You know a guy who can make nails for $5/hour.  Therefore, even though you are perfectly capable of making nails yourself, you hire this guy to make nails for you.

This frees up time for you to assemble more carriages, which raises your effective hourly income from $15/hour to maybe $17/hour. 

By outsourcing the low-end work (nail-making) you were able to leverage your skill at more complex tasks (carriage assembly), thereby increasing your wealth, and everybody else's.

Every task - EVERY task - should be done by the lowest-cost worker with sufficient skill.  Anything else is wasteful.  The outsourcing of low-end manufacturing from the US allowed the skilled US workers to engage in higher-profit activities, so everybody makes more money.

Pariel wrote: Most of the outsourcing happening in this country is unskilled labor. It's jobs that we can not only afford to lose, but for short- and long-term economic success, make sense to cut. Those 500 workers may be out of a job, but the economic conditions here benefit from cheaper labor.

This is not true.

Low-skill manufacturing jobs were mostly outsourced during the 70s.  In the manufacturing sector today, we are actually seeing "in-sourcing," as high fuel costs and cheap dollars make it attractive to build factories near the American consumer - you will notice that many foreign car companies build cars in the US, and not just for the US market.

Anybody complaining about manufacturing outsourcing is 30 years behind schedule.  There is some of that going on still, but not much.

During the 90s and early 00s we saw outsourcing of low-end computer jobs.  Phone banks, help desks, coding, network management, etc.  This continues today.  Computer engineers with no special skills have a hard time finding good work in the US anymore.

These days we have moved into outsourcing information professionals.  This is just starting.  Accountants in particular face international competition.  Researchers of all kinds, radiologists and certain other physicians, lawyers to some extent - all the people whose job it is to collect and interpret information are facing competition from lower-cost providers across the globe.

Lightningbolt wrote: how is it helping the 500 workers that lost their jobs?

Clearly losing your job sucks.  No doubt about it.

But we have been aggressively outsourcing for decades.  And you know what?  Except for the last 2-3 years, unemployment in the US has been at historic lows during that entire time.  Even now unemployment is "low" by any objective standard.

This is because the jobs that we outsource are by definition crappy.  This frees up workers for better jobs.  We would not have been able to lead the internet revolution if our workers had all been busy making sheet metal.

Had we not outsourced the crappy work, we would not be anywhere near as wealthy as we are.  And we have to continue to outsource to maintain and increase that wealth.

Irrationally holding on a particular set of jobs is directly harmful to the national economy.

JohnnyHopper wrote: Rambino, when will we outsource lawyers :) /flippant

No need to be flippant - it's true.  Some types of lawyers (ambulance chasers) are difficult to outsource, but corporate types such as myself face very direct outsourcing challenges.  In fact, my primary competition personally comes to a large extent from outside the US.

And to combat that, many US law firms have taken to outsourcing their legal research to cheaper locales.

Legal outsourcing is very real and it is here now.  Not yet as pervasive as accounting outsourcing, but that may yet change.

Pariel wrote: They're facing competition in those fields, yes. But the average American industrial worker is facing no job in the next 10 years, whereas the average accountant (which the NY Times reported was one of the fastest growing outsourced jobs last year) is just facing somewhat smaller wages at this point.

See, that's the problem.  Why do we have "average industrial workers" at all?

Does "average industrial work" sound like a great job that we should protect at all cost, or even at any cost?

It's all about retooling and reeducating.  Nobody - NOBODY - should expect to do the same job for 40 years and then retire.  You will, guaranteed, face several major career shifts during your life, when you will be required to learn new skills to adapt to the changing environment.

If we have "average industrial workers" that can't find "average industrial work" then we need to change those workers into either not average, or not industrial.

A job is not something that comes to you - you go to the job.  if there are no jobs that match your skills, then you get new skills to match the jobs that are there.

Outsourcing isn't the only factor in forclosures and the decreasing housing market but when people lose jobs they can't pay bills and property taxes and the lose their house or can't afford to build a house.  Foreclosures are a nation-wide problem.  My cousin, who lives in Chicago said that $1,000,000 forclosures are occuring in multitudes.

Interest-only loans are at fault as well among alot of other factors.

JohnnyHopper wrote: Rambino wrote: Irrationally holding on a particular set of jobs is directly harmful to the national economy. That reminds me. I was supposed to warn everyone that the intergalactic luddites are attacking, very slowly....on horseback.

I lol'ed.

But you raise an important point.  People are all a-ga-ga over outsourcing - but outsourcing is exactly the same as technological advancement.

What does it matter if you lose your job to China or a machine?  You are still out of work with obsolete skills.  The people protesting outsourcing are Luddites, pure and simple.  You can't turn back the clock, nor should you want to.

Lightningbolt wrote: Outsourcing isn't the only factor in forclosures and the decreasing housing market but when people lose jobs they can't pay bills and property taxes and the lose their house or can't afford to build a house.  Foreclosures are a nation-wide problem.  My cousin, who lives in Chicago said that $1,000,000 forclosures are occuring in multitudes. Interest-only loans are at fault as well among alot of other factors.

Outsourcing is not only not the only source of foreclosures, but is barely even a contributing factor.  The job losses in the last couple of years are not outsourcing losses but contraction losses.  Companies are laying off people, not moving their jobs.  Outsourcing is irrelevant to this process.

And then the million-dollar foreclosure - does that sound like an "average industrial worker" that got outsourced, or an investment banker that got laid off because of a contracting economy?

Lightningbolt wrote: ^ The economy is terrible and some may not notice due to that fat check they get every Friday.  People that are looking for viable rsolutions to the bad economyu are luddites?  It's not that simple bro.

The economy is having a downturn, yes, but we are a long shot from "terrible."

But people that are looking for viable solutions are not Luddites.  It's just that "stopping" outsourcing is not a viable solution, but would do active harm to the economy, just like trying to slow down technological innovation.  So people who simply point to outsourcing are in fact Luddies, yes.

Lightningbolt wrote: ...it seems like we could friggin' build some bicycles here.

We could, but why would we want to?  Building bicycles is very basic work.  Most anybody can do it with minimal training.  We would have to pull skilled workers from better jobs to build bicycles.  Very counter-productive.  The economy is best served if everybody work in a job that maximizes their capabilities.  bicycle-building is not that.

What tallen said (except for the last paragraph, where I have some minor disagreements).

I am still hatin' on Bush for his steel tariffs.  That was stupid, and then he aggravated it by suddenly undoing the tariff after commitments had been made.  That policy did an incredible amount of harm in less than a year.

The solution is usually not more regulation but less regulation, and the particular thing here and now that needs to be less regulated is the Chinese yuan.

tallen702 wrote: merc wrote: when imports>exports its bad econ 101. being in the manufacturing industry and seeing 1st hand what the chineese are doing i can say that we are in some deep muck... they are buying up american (and other) metals, bringing them back to china, cutting them with pot metal, forging documents, and shipping it back to the US/Europe. this is bad because the materials are to to spec and act really funny when you try and machine, weld, or heat treat them. (warping, cracking, etc) with the outsorcing of industrial/manufacturing jobs the skilled work force has thinned out greatly. we need to get away from free trade and start charging tariffs. edit: its not just the :unskilled jobs that are leaving. its most/all of the manufacturing and agricultural jobs. a few things have come back into the US because its gotten more expensive to ship things. but its still cheaper to get junk from china than it is to get American quality. We don't need to slap tariffs on our competing countries, that is also bad-econ theory. A free market economy is always best, anything less stifles competition and drives up domestic prices while those depending on the cheap importation of materials then move the jobs that might normally have stayed in country over to the country we slapped the tariffs on to keep costs low. Sure, you put a tariff on Chinese steel, but not on whole car cars.... What we need to do is go after china for keeping their currency value artificially low, they don't have a floating value system over there for their currency. The peg it to the value of the US dollar, but orders of magnitude lower to keep them competitive. If China were to allow her currency to float to a free-market level, they wouldn't be able to continue producing and exporting goods en-mass to the US due to the fact that they would be only a little cheaper to produce. Add in the rising transportation costs and you wind up being able to produce those same goods in the US or Central/South America. The Chinese even subsidize their citizens' fuel costs to ensure that their middle class continues garnering more wealth so that when they eventually do un-peg the Yuan, there will be an explosion of wealth as the Yuan's true value finds it's place in the market. Don't believe all of those countries who export goods to us don't have a financial relationship so close to our own that it doesn't hurt them when the US economy stumbles? Think again. Imports are down, but there is manufacturing growth here in the US meaning that our trade deficit is slowly turning around. That means that all those countries that produce goods that we consume are now hurting. The Chinese, the Japanese, most of S.E. Asia and even the EU are hurting from the lack of US purchasing power right now. It may seem like everyone else in the world is doing better than us right now, but they're starting to feel the ripples in the economic waters. Laisez Faire Economic policies ('Regan-omics') have proven time and again to be the best policies for the US. The current credit-crunch is our own fault and will allow the economy to shore up and find a stable level. We've been living on inflated value for so long it was about time that the bottom fell out of the flimsy market we had built ourselves. Now, instead of trading around some mysterious wealth that none of those involved ever actually had, we'll get back to spending cold, hard, currency which will allow the US to continue marching forward economically. That economic growth we saw all through the Clinton years was nothing more than smoke and mirrors established by the unscrupulous lenders who decided it was better to make a quick buck off of a bunch of dumb idiots with no clue about managing their wealth than to practice sound economic sense.

Says the man who can't be outsourced.

The microwave will take your job Tallen!

tallen702 wrote: SSOK wrote: Says the man who can't be outsourced. The microwave will take your job Tallen! That's the whole point though now isn't it? A big thing that I thought about in determining my future career was job security. I could have pursued IT/CS degrees like a lot of my friends, or I could have followed in my father's footsteps and gone down the engineering route. I could have gone just about anywhere, but in my industry, in my job, I have security in the knowledge that everyone has to eat, and no matter how hard the times get, there are always people willing to spend money on fine food and drink. If you look at the restaurants that survived the Great Depression, they weren't local grills or the fore-runners of today's chains; they were the high-brow establishments that catered to the rich and famous and knew how to get them what they wanted. That is why I have no sympathy for those who chose to believe that their manufacturing jobs will be there for them forever. You must plan for the eventuality that someone, somewhere, will eventually be able to do your job for less unless you are a member of certain specialized fields.

Although you are right, I must admit It kills me when I see one of the American manufacturing giants sell out or go out of business.  Such as GM selling Chinese engines, Mopar(I know, not the correct term) importing chinese cars, or Bethlehem Steel.

Also, Budweiser is a prime example. Although they didn't cast things, or go out of business, they were bought by a foreign company. It is off topic, however, but I feel it goes along with my point.

tallen702 wrote: That is why I have no sympathy for those who chose to believe that their manufacturing jobs will be there for them forever. You must plan for the eventuality that someone, somewhere, will eventually be able to do your job for less unless you are a member of certain specialized fields.

Yep.  Same reason I left computer work as well.  Saw it coming.  Although, with the cheap lawyers in India coming after my job, I may be attending culinary school myself soon.   :)

Interestingly, Forbes just did a story on the fastest-dying cities in the US.  Overwhelmingly, they were steel and automobile cities.  Yet, despite, losing tens - or hundreds - of thousands of jobs over the last few decades, unemployment in those places is mostly just 50% higher than in the rest of the country.  Why?  Because people aren't stupid, and have left those towns looking for jobs where the jobs are - hence the "fastest-dying."

That's the good news.  Americans are adapting, as always.  There are some unemployed folks in Flint wondering when GM is going to open another factory, while their former neighbors and coworkers are making silicon wafers in Arizona.

BARREL BREAK wrote: If you can't take the heat of real free-market competition, get into the cool embrace of protectionist socialism, we have cookies.

Those are not the only choices.

A self-interested capitalist society will invest in its most important asset:  its people.

Training programs, relocation programs, extended unemployment benefits, health coverage, etc. - those are all things that can (and should) be viewed as an investment by a capitalist society.

Unemployed people are a drag on society, even if there are no government benefits.  They are sucking up resources and not contributing.

If society can spend a few bucks to get the laid-off workers a new job an help him transition, this is a good investment for society and will benefit us all.

Like tallen said, the 50+ auto-workers are not going to casually drive down to AZ to make wafers.  And while we may scoff at them for their "laziness," the bottom line is that it benefits everybody if they have a job.  Instead of getting holier-than-thou about how they didn't have enough get-up-and-go, we should be more selfish, and simply recognize that they are a wasted asset that needs to be put back to work.

JohnnyHopper wrote: Rambino wrote: we should be more selfish, and simply recognize that they are a wasted asset that needs to be put in the wood chipper. Fixed it :)

No, that would be wasteful.  We should put them in the woodBURNER to generate heat/electricity.

I am by no means an economic expert, but I will put my two cents in. First of all the statement that only low skilled jobs are being outsourced isn't wholey accurate. I work in the electronics industry and have seen over the past several years massive amounts of fairly skilled manufacturing going offshore first to HK, than to Malaysia and now back to mainland China. Granted, initially, it was only cheap products such as toys, radios, etc that were mainly being outsourced, but now even high end production is being moved there. Military electronic production is still mainly here in the U.S. and Europe, but most commercial mass production has moved. This has happened in just the past 8 years or so since China was opened up. Motorola, IBM, AMD, Intel and most others now have the majority of their product manufactured elsewhere. This did not necessarily happen directly, but a lot of these companies switched their production over to CEM's (Contract Electronic Manufacturers). Initially, these CEM's had local facilities, but those have migrated mainly to Asia. As far as making wafers in Arizona, don't pack up the van yet as a lot of this is going offshore to China as well.

Here is the problem. While producing components and boards may take some skill, the Chinese actually have a decent educational system and a growing skilled workforce. Also the automation of populating boards etc has made it so you need less(as in quantity) skilled workers to produce the boards. Now granted, it doesnt really cost any difference (mostly) to have a machine sitting here in the U.S. mounting components on boards than it does to have it sitting in Shenzhen, but once you have that board made, you need someone to take the board, attach wires, put it in a plastic case and than package it. All of the latter are low skill level jobs and as someone mentioned, they work a lot cheaper than we do. So not only did we lose the unskilled jobs, but we lost the skilled ones as well.

I read somewhere the average pay in China was $350/month. Not many American can or will accept this kind of pay as you can't live on this.

Regarding unions, I personally feel they are part of what is killing the U.S. automotive industry, and possibly industry in general. I live in NW Ohio and have seen no less than 5 factories bug out within the past 5-6 years. In nearly each case, the workers were given the opportunity to take pay cuts or have the plant close and in every case they chose to have the plant close and lose the jobs to Mexico. All of them were within the automotive sector. I cannot understand the rationale in that. What I have noticed is that while all of the unionized American shops are downscaling and closing, Honda has expanded their Marysville plant and just opened another in Indiana.

Benjichang wrote: oldpbnoob wrote: I live near Lima. I was born and raised in Florida though, so my anti-union sentiments are not always warmly received. Mmmm. I go to school in Ada. Gotta love Lima though. /sarcasm

Lima has some good and bad qualities just like everywhere else. Granted, coming from Orlando, Florida where I was mostly raised, it is a bit of culture shock, but I have gotten used to a lot of it. I waffled on the weather and originally liked the change of seasons, but have truly grown to hate the winters here. It isn't so much the cold as the gloominess. I also hate the fact that the vast majority of the people here think its totally acceptable to roll into any public place wearing sweats, wifebeaters and a trucker hat. It just seems a lot more "ghetto" here. That and all the pro-union idiots.  

tallen702 wrote: As far as more technical jobs leaving the US for foreign soil, yes, you are seeing a slightly higher grade of production starting to spring up in Taiwan, the PRC, and Malaysia, but the rate at which higher-tech manufacturing will catch on over there is a lot slower than the days of transistor and printed circuit board production shifted that way.

I agree with nearly everything you are saying other than this. Simply not true. Most of the major semiconductor manufacturers have or are looking into production in China. Massive wafer/die production has been occurring in the Philippines,  Taiwan, and Malaysia for years. Even higher technology semiconductor and FPGA manufacturers such as Xilinx and even Intel are now producing in China.

The irony in this is that there is a massive supply of both counterfeited and substandard product originating from China. So much so, that even parts legitimately manufactered in China are actually scrutinized by OEMs/CEMs. I have had several situations where I purchased parts directly from a legitimate Chinese distributor only to sell the parts back into the market. I also had a situation where a customer rejected parts simply because the manufacturing country of origin was China. It took me nearly two weeks to get the manufacturer of the components to produce a letter for me verifying that they did have a Chinese facility and that the parts were legitimate. But this is a bit off the point.

oldpbnoob wrote:  I waffled on the weather and originally liked the change of seasons, but have truly grown to hate the winters here. It isn't so much the cold as the gloominess.

That's because you didn't go far enough North.  A proper winter is glorious thing, not like the six months of gloom that passes for winter in the South.

I prefer places where you can spend Christmas day comfortably at the beach most years.

oldpbnoob wrote: I prefer places where you can spend Christmas day comfortably at the beach most years.

Ugh.  I get all depressed if I don't have at least a foot of snow for Christmas.

But hey, whatever pushes your buttons.

:)

Rambino wrote: oldpbnoob wrote: I prefer places where you can spend Christmas day comfortably at the beach most years. Ugh.  I get all depressed if I don't have at least a foot of snow for Christmas. But hey, whatever pushes your buttons. :)

Nothing like sitting on the beach with a cold beverage watching your kids play in the sand knowing that your relatives are back home, stuck inside, freezing their asses off in a foot of snow.

oldpbnoob wrote: Nothing like sitting on the beach with a cold beverage watching your kids play in the sand knowing that your relatives are back home, stuck inside, freezing their asses off in a foot of snow.

That's funny.

Last Christmas I was sitting on the beach with a cold beverage watching my kids play in the sand knowing that my relatives were back home, having a blast, skiing and sledding in a foot of snow.

My wife chose the destination.  Shows who's in charge.

:)

Rambino wrote: oldpbnoob wrote: Nothing like sitting on the beach with a cold beverage watching your kids play in the sand knowing that your relatives are back home, stuck inside, freezing their asses off in a foot of snow. That's funny. Last Christmas I was sitting on the beach with a cold beverage watching my kids play in the sand knowing that my relatives were back home, having a blast, skiing and sledding in a foot of snow. My wife chose the destination.  Shows who's in charge. :)

Whatever pushes your sled.