What can the U.S> do to stop the over-dependence on outsourcing?

This topic is locked from further discussion.

#101 Posted by KC_Hokie (16099 posts) -
[QUOTE="KC_Hokie"]

[QUOTE="Mafiree"] If US currency can buy more goods in south-east Asia that will only exasperate the supposed problem (outsourcing)........Mafiree

Not if government spending and corporate taxes were lowered. We haven't made the stuff they make over there for a long time now.

We should target a high tech economy. And having a higher purchasing power relative to the world won't hurt us at all in that area. It would allow our standard of living to remain while potentially dropping elsewhere as well.

I don't see anything good from matching the devaluation going on. It's not like we export much anyways. And what we do (commodities, planes, high tech, etc.) have little competition anyways.

Planes aren't competitive? Boeing vs Airbus.......

Compared to must industries....not even close. That's one company away from a monopoly.
#102 Posted by GoldenElementXL (3692 posts) -
Outsourcing has become a huge money saver for corporations. The issue is that these corporations set unrealistic profit margin goals year after year to make stock holders happy. How can a company expect to increase revenue 2-3% year after year. After a while the goals aren't met, jobs are outsourced, workers are laid off, goals still arent met and the company goes under. And many times this happens after getting help from the government.
#103 Posted by Mafiree (3704 posts) -
[QUOTE="Mafiree"][QUOTE="KC_Hokie"]Not if government spending and corporate taxes were lowered. We haven't made the stuff they make over there for a long time now.

We should target a high tech economy. And having a higher purchasing power relative to the world won't hurt us at all in that area. It would allow our standard of living to remain while potentially dropping elsewhere as well.

I don't see anything good from matching the devaluation going on. It's not like we export much anyways. And what we do (commodities, planes, high tech, etc.) have little competition anyways.

KC_Hokie
Planes aren't competitive? Boeing vs Airbus.......

Compared to must industries....not even close. That's one company away from a monopoly.

And how are relatively more expensive Boeing planes not going to effect US exports?
#104 Posted by comp_atkins (31812 posts) -
it's waaay cheaper.. was in a meeting at work a year or two ago with one of the executives whose decision it was to open a development center in india... he flat out told us that they can hire 3 people in bangalore for the cost of 1 in the us... doesn't take a genius...
#105 Posted by starfox15 (3966 posts) -

We outsource way to much, and while not entirely the issue with the U.S. economy, fixing it would help A LOT. Now what are we doing wrong and how should we fix it? Should we pass some bills that cause isolation in areas of trade? Should we have international companies have companies in the states to manage designs and manufacturing? Canon-Gatorade

I read an article in Time magazine a few years ago that talked about how Germany was doing well for its ability to keep the talent in Germany.  Many technical colleges in Germany are free and they extend this privilege to some foreigners as well.

http://www.cbsnews.com/8301-505145_162-37240853/attending-college-for-free-overseas/

What this does is maintain a healthy domestic product.  Instead of investing heavily into outsourcing, Germany has instead made the investment into free (or heavily subsidized) education for the students of Germany.  The cost comes out of taxes and lowers outsourcing and unemployment rates all over the country.

The US is a much bigger country of course, but if I had to guess, adopting a similarly discounted form of low cost or free education, even just vocational, would boost our internal product and lower outsourcing.

http://www.ehow.com/list_6509386_list-tuition-universities-germany.html

Also, are we still discussing the "trickle down" theory of economy?

#106 Posted by sonicare (53563 posts) -

Unfortuantely the genie is out of the bottle.  Once you have globalization, you're always going to find markets that can offer cheaper sources of labor.  That's why industrial jobs have dried up.  You can blame companies for outsourcing jobs, but they're just going the pathway of least resistance.  You can't compete with competitors who can pay their labor half as much.

#107 Posted by Canon-Gatorade (153 posts) -
[QUOTE="Canon-Gatorade"][QUOTE="EmpCom"] None of which are youEmpCom
You know I am not the latter how? May I see your crystal ball?

The fact you are on gamespot asking economic advice is a big clue

And what about the 36 other sites that are in completely different categories I am also getting advice from? And the personal interview in real life? and listening to political views from the just last election? It seems like i am doing something no one else though of obviously to me.
#108 Posted by Canon-Gatorade (153 posts) -

[QUOTE="Canon-Gatorade"]We outsource way to much, and while not entirely the issue with the U.S. economy, fixing it would help A LOT. Now what are we doing wrong and how should we fix it? Should we pass some bills that cause isolation in areas of trade? Should we have international companies have companies in the states to manage designs and manufacturing? starfox15

I read an article in Time magazine a few years ago that talked about how Germany was doing well for its ability to keep the talent in Germany.  Many technical colleges in Germany are free and they extend this privilege to some foreigners as well.

http://www.cbsnews.com/8301-505145_162-37240853/attending-college-for-free-overseas/

What this does is maintain a healthy domestic product.  Instead of investing heavily into outsourcing, Germany has instead made the investment into free (or heavily subsidized) education for the students of Germany.  The cost comes out of taxes and lowers outsourcing and unemployment rates all over the country.

The US is a much bigger country of course, but if I had to guess, adopting a similarly discounted form of low cost or free education, even just vocational, would boost our internal product and lower outsourcing.

http://www.ehow.com/list_6509386_list-tuition-universities-germany.html

Also, are we still discussing the "trickle down" theory of economy?

The issue with this is that our standard school system(public) being free is already a burden, colleges for free wold be a large issue unless that's fixed.
#109 Posted by Barbariser (6761 posts) -

Nothing at all. Offshoring jobs is a net benefit to the U.S..

[QUOTE="Canon-Gatorade"]We outsource way to much, and while not entirely the issue with the U.S. economy, fixing it would help A LOT. Now what are we doing wrong and how should we fix it? Should we pass some bills that cause isolation in areas of trade? Should we have international companies have companies in the states to manage designs and manufacturing? starfox15

I read an article in Time magazine a few years ago that talked about how Germany was doing well for its ability to keep the talent in Germany.  Many technical colleges in Germany are free and they extend this privilege to some foreigners as well.

http://www.cbsnews.com/8301-505145_162-37240853/attending-college-for-free-overseas/

What this does is maintain a healthy domestic product.  Instead of investing heavily into outsourcing, Germany has instead made the investment into free (or heavily subsidized) education for the students of Germany.  The cost comes out of taxes and lowers outsourcing and unemployment rates all over the country.

The US is a much bigger country of course, but if I had to guess, adopting a similarly discounted form of low cost or free education, even just vocational, would boost our internal product and lower outsourcing.

http://www.ehow.com/list_6509386_list-tuition-universities-germany.html

Also, are we still discussing the "trickle down" theory of economy?

Germany can stay competitive as a manufacturer because the Eurozone props them up and they pay lower wages than most of their Eurozone rivals compared to their productivity. Subsidized education is great for improving social mobility and average productivity but I doubt its effect on German export competitiveness is at all significant compared to the fact that they've got the second largest consumer market in the world captive.

#110 Posted by tenaka2 (17040 posts) -

Planes aren't competitive? Boeing vs Airbus.......KC_Hokie

Didn't you take an oath to leave this site if Obama was re-elected? The way you lie you should consider politics yourself.

#111 Posted by whiskeystrike (12096 posts) -

Unfortuantely the genie is out of the bottle.  Once you have globalization, you're always going to find markets that can offer cheaper sources of labor.  That's why industrial jobs have dried up.  You can blame companies for outsourcing jobs, but they're just going the pathway of least resistance.  You can't compete with competitors who can pay their labor half as much.

sonicare
I can't believe these companies are giving away AMERICAN jobs! *goes to Walmart
#112 Posted by Mochyc (4421 posts) -

Have to become more competitive. Lower corporate tax rates and fewer regulations. Less government as a percentage of GDP.

KC_Hokie
Companies outsource because it is cheaper to hire people outside the United States. How do you believe lower corporate tax rates and less government spending will lower before taxes costs (and hence before taxes profits)?
#113 Posted by Squeets (8184 posts) -

[QUOTE="Squeets"]

Nothing.

Why? Capitalism.

You have a software business.  You want to make money.

Why pay an American $150k a year plus benefits when you can hire an equally (if not more) qualified Indian for example to do it for $20k a year and no benefits?

They could completely remove corporate tax, that wouldn't change the cheapness of overseas labor.  What do you suggest we do? Introduce market wide US protectionism... 1000% tariffs on all imports... Tell the rest of the world we aren't going to buy foreign, but they should buy from us at an extreme premium... What are you stupid?

Not to mention less risk/liability overseas... I know someone who works for an oil company overseas... They hire on-site guys to do some of the skilled work on rigs and ships for pennies on the dollar what it would cost to send a European/American out there... Some guy recently had his arm crushed in an accident... If that happened to an American, he would get severence in the hundreds of thousands and probably sue the company for millions... The on-site local (from Southeast Asia) that it happened to was given $10,000 and sent on his way after having his arm amputated.

Canon-Gatorade

So instead of saying we won't buy foreign, why can't we put limitations on the amount of outsouricng so that it balances out? Also, in your first example with the software business, would it not be easier to have more money for the company so that you can pay your employers more equally throughout instead of having most of the moeny put on checks for the upper administration than do either of the two things you mentioned?

That's communist talk you damn dirty red!

#114 Posted by Squeets (8184 posts) -

[QUOTE="Squeets"]

Nothing.

Why? Capitalism.

You have a software business.  You want to make money.

Why pay an American $150k a year plus benefits when you can hire an equally (if not more) qualified Indian for example to do it for $20k a year and no benefits?

They could completely remove corporate tax, that wouldn't change the cheapness of overseas labor.  What do you suggest we do? Introduce market wide US protectionism... 1000% tariffs on all imports... Tell the rest of the world we aren't going to buy foreign, but they should buy from us at an extreme premium... What are you stupid?

Not to mention less risk/liability overseas... I know someone who works for an oil company overseas... They hire on-site guys to do some of the skilled work on rigs and ships for pennies on the dollar what it would cost to send a European/American out there... Some guy recently had his arm crushed in an accident... If that happened to an American, he would get severence in the hundreds of thousands and probably sue the company for millions... The on-site local (from Southeast Asia) that it happened to was given $10,000 and sent on his way after having his arm amputated.

Canon-Gatorade

So instead of saying we won't buy foreign, why can't we put limitations on the amount of outsouricng so that it balances out? Also, in your first example with the software business, would it not be easier to have more money for the company so that you can pay your employers more equally throughout instead of having most of the moeny put on checks for the upper administration than do either of the two things you mentioned?

That's communist talk you damn dirty red!

#115 Posted by KC_Hokie (16099 posts) -
[QUOTE="KC_Hokie"]

Have to become more competitive. Lower corporate tax rates and fewer regulations. Less government as a percentage of GDP.

Mochyc
Companies outsource because it is cheaper to hire people outside the United States. How do you believe lower corporate tax rates and less government spending will lower before taxes costs (and hence before taxes profits)?

Corporations get taxed on profit not revenue.
#116 Posted by Diablo-B (4053 posts) -
Most of the outsourcing is of low wage jobs. Solution: our work force has to be more skilled so we will dominate the high level skill positions.
#117 Posted by Diablo-B (4053 posts) -

[QUOTE="Canon-Gatorade"][QUOTE="Squeets"]

Nothing.

Why? Capitalism.

You have a software business.  You want to make money.

Why pay an American $150k a year plus benefits when you can hire an equally (if not more) qualified Indian for example to do it for $20k a year and no benefits?

They could completely remove corporate tax, that wouldn't change the cheapness of overseas labor.  What do you suggest we do? Introduce market wide US protectionism... 1000% tariffs on all imports... Tell the rest of the world we aren't going to buy foreign, but they should buy from us at an extreme premium... What are you stupid?

Not to mention less risk/liability overseas... I know someone who works for an oil company overseas... They hire on-site guys to do some of the skilled work on rigs and ships for pennies on the dollar what it would cost to send a European/American out there... Some guy recently had his arm crushed in an accident... If that happened to an American, he would get severence in the hundreds of thousands and probably sue the company for millions... The on-site local (from Southeast Asia) that it happened to was given $10,000 and sent on his way after having his arm amputated.

Squeets

So instead of saying we won't buy foreign, why can't we put limitations on the amount of outsouricng so that it balances out? Also, in your first example with the software business, would it not be easier to have more money for the company so that you can pay your employers more equally throughout instead of having most of the moeny put on checks for the upper administration than do either of the two things you mentioned?

That's communist talk you damn dirty red!

Actually, highly skilled Indian software devs aren't that much cheaper and american devs. In addition there is a SHORTAGE of developers and engineers in the US so outsourcing isnt an issue in that field
#118 Posted by Sarkyfritz (8 posts) -
Most of the outsourcing is of low wage jobs. Solution: our work force has to be more skilled so we will dominate the high level skill positions. Diablo-B
Depends on what you idea of low wage is. Manufacturing jobs paid more than the front end service jobs that replaced them. They usually had better benefits(pensions, health insurance ect.) and higher wages. Also along with the those higher wages they obviously paid more taxes which is the reason the economy is in the **** You took a huge source of tax revenue away all for a short term gain in purchasing power from buying third wolrld sweat shop made products. Tariffs wont work Corporate tax cuts wont work Getting rid of unions wont work Getting rid of the minimum wage wont work
#119 Posted by Renevent42 (5451 posts) -

Have to become more competitive. Lower corporate tax rates and fewer regulations. Less government as a percentage of GDP.

KC_Hokie

Wouldn't do anything at all to make using local resources more attractive. Outsourcing would still be cheaper, therefore companies would still do it. All lowering the corporate tax rate would do is put more money in those companies pocket to reinvest elsewhere. Those companies would still seek the cheapest/most efficient ways of doing business. As long as an outsourced resource can be paid pennies on the dollar from their American counterparts, lowering the tax rate would do zilch.

Not saying lower taxes is a bad thing of course, but in the context of this discussion it would have no effect.

The only things that would make a difference is:

a) Equalization of pay/cost.  This actually already happens fairly often, for instance some of the countries that were extremely popular for outsourcing years ago are getting much less attractive.  The reason?  Standard of living INCREASED in those countires, forcing wages up equalizing the costs.  The problem?  Companies simply find less developed countries yet again and just outsource there instead.

b) Large proficeincy gap...meaning our work force is just so much better than outsourced resources using those resources would cause your product to be at a competative disadvantage.  Aside from a few specialized areas though, this isn't a big equalizer as the workforce in other **** is actually pretty damn good.

#120 Posted by BuryMe (22017 posts) -

[QUOTE="Canon-Gatorade"][QUOTE="KC_Hokie"]

Have to become more competitive. Lower corporate tax rates and fewer regulations. Less government as a percentage of GDP.

KC_Hokie

What benefit is there to lowering corporate tax rates? Why have we not done this already?

Allows corporations keep a higher percentage of their profits which they can reinvest which included hiring. We haven't touched our corporate tax rates since the mid-80s.

Companies aren't going to hire more people just because they have money lying around. They'll only hire when they actually need more staff. So dropping their taxes won't increase employment. Increasing their sales will.

#121 Posted by Sarkyfritz (8 posts) -

[QUOTE="KC_Hokie"]

Have to become more competitive. Lower corporate tax rates and fewer regulations. Less government as a percentage of GDP.

Renevent42

Wouldn't do anything at all to make using local resources more attractive. Outsourcing would still be cheaper, therefore companies would still do it. All lowering the corporate tax rate would do is put more money in those companies pocket to reinvest elsewhere. Those companies would still seek the cheapest/most efficient ways of doing business. As long as an outsourced resource can be paid pennies on the dollar from their American counterparts, lowering the tax rate would do zilch.

Not saying lower taxes is a bad thing of course, but in the context of this discussion it would have no effect.

The only things that would make a difference is:

a) Equalization of pay/cost. This actually already happens fairly often, for instance some of the countries that were extremely popular for outsourcing years ago are getting much less attractive. The reason? Standard of living INCREASED in those countires, forcing wages up equalizing the costs. The problem? Companies simply find less developed countries yet again and just outsource there instead.

b) Large proficeincy gap...meaning our work force is just so much better than outsourced resources using those resources would cause your product to be at a competative disadvantage. Aside from a few specialized areas though, this isn't a big equalizer as the workforce in other **** is actually pretty damn good.

Also you have to factor in that China has such a massive population that it will take a long time for them to increase there overall standard of living to anything comparable to western nations, if it's even possible at all. China has an almost endless supply of cheap labour.

#122 Posted by Mochyc (4421 posts) -
[QUOTE="Mochyc"][QUOTE="KC_Hokie"]

Have to become more competitive. Lower corporate tax rates and fewer regulations. Less government as a percentage of GDP.

KC_Hokie
Companies outsource because it is cheaper to hire people outside the United States. How do you believe lower corporate tax rates and less government spending will lower before taxes costs (and hence before taxes profits)?

Corporations get taxed on profit not revenue.

Exactly, I did not say otherwise. What I am asking you is how a lower tax rate on profits encourage corporations to hire locally rather than outsource? The tax rate does not affect their before tax profits (duh), but outsourcing does. I also wish to know how more government spending would decrease a corporations before tax profits (or increase local labor costs).
#123 Posted by Diablo-B (4053 posts) -
[QUOTE="Diablo-B"]Most of the outsourcing is of low wage jobs. Solution: our work force has to be more skilled so we will dominate the high level skill positions. Sarkyfritz
Depends on what you idea of low wage is. Manufacturing jobs paid more than the front end service jobs that replaced them. They usually had better benefits(pensions, health insurance ect.) and higher wages. Also along with the those higher wages they obviously paid more taxes which is the reason the economy is in the **** You took a huge source of tax revenue away all for a short term gain in purchasing power from buying third wolrld sweat shop made products. Tariffs wont work Corporate tax cuts wont work Getting rid of unions wont work Getting rid of the minimum wage wont work

Actually you are right. I should have said low skill jobs.
#124 Posted by LazySloth718 (2345 posts) -

Lower taxes and less government.

#125 Posted by SpartanMSU (3440 posts) -

[QUOTE="KC_Hokie"][QUOTE="MakeMeaSammitch"]bush did that. 

I vaguely recall an explosion of debt.

MakeMeaSammitch

Nope. Never touched corporate taxes. And he increases spending and the size of government which is part of our problem.

It deacreased the income tax which increased debt.

We would see the same thing with corperate debt.

Maybe if CEOs weren't payed so well, we could afford to create more jobs here at home.

:lol:

#126 Posted by Sarkyfritz (8 posts) -

Lower taxes and less government.

LazySloth718

Nope that wouldn't help and would actually exacerbate the problem.

#127 Posted by sSubZerOo (43565 posts) -

Have to become more competitive. Lower corporate tax rates and fewer regulations. Less government as a percentage of GDP.

KC_Hokie

And here is exactly why we have this problem.. The United States has been doing this in "good faith" what ends up happening are these companies are taking advantage of the system and outsourcing any ways.. The government needs to promote good behavior by giving benefits to companies who actually do it.. Not this good faith garbage in hopes the company will do it.. Or we will continue seeing the same kind of behavior.. In which the US throws money at companies like GE, even lets them pay 0 taxes for a year.. In which they gain record profits.. And they STILL cut jobs in the US.

  Out sourcing needs to be punished and development in the United States needs to be promoted.. If companies want to out source, fine.. But they cannot have the same benefits and they should be penalized if they still wish to use the US economic environment to their advantage.. 

#128 Posted by DaBrainz (7721 posts) -
I suppose they can make things more expensive through tariffs but then nobody would be able to afford anything. We do love our cheaply made electronics and vehicles.
#129 Posted by thegerg (15771 posts) -
One way that the average Joe can help is to not do business with businesses that use foreign labor.
#130 Posted by megam (457 posts) -
I'd like to see fair trade policies instead of free trade. Also, for everyone wanting lower corporate tax rates, take a look at the effective tax rates paid by corporations. The US has a lower effective corporate rate than most other developed nations. Sure, on paper, the corporate tax rate is high. In reality, profitable businesses like GE can make billions of dollars and not pay any tax on it.
#131 Posted by The-Apostle (12193 posts) -

[QUOTE="Canon-Gatorade"][QUOTE="KC_Hokie"]Allows corporations keep a higher percentage of their profits which they can reinvest which included hiring. We haven't touched our corporate tax rates since the mid-80s.

KC_Hokie

But the mid-80's America did not have a debt problem. So what is the difference now and then when talking about changing corporate taxes? An excuse i have heard many people use.

Not the corporations fault government spending is out of control. Government has to cut spending.

And lowering corporate tax rates means more profit for corporations which means more investing which means more spending, jobs, etc.

This.
#132 Posted by hoola (6422 posts) -

Once again, the common solution is to give away benefits and taxpayer money to "fix" the problem.  Instead of actually trying to compete by deregulating and having a large reduction in taxes (across the board, not just corporations), they simply want to throw money at them, hoping they will stay.  One minute i will read about how evil corporations are for taking advantage of laws and loopholes to save money, and the next i'm reading how the government should pick and choose which ones to give benefits to.  Wow.  

#133 Posted by Abbeten (3002 posts) -
i'm all for lowering corporate tax rates but i'm not deluded enough to think that it will help this even slightly. hokie is overlooking the fact that US companies are raking in record after-tax profits and sitting on massive piles of liquidity and not doing anything with it, so giving them more money won't exactly cause a huge economic revival
#134 Posted by osirisx3 (2008 posts) -

i'm all for lowering corporate tax rates but i'm not deluded enough to think that it will help this even slightly. hokie is overlooking the fact that US companies are raking in record after-tax profits and sitting on massive piles of liquidity and not doing anything with it, so giving them more money won't exactly cause a huge economic revivalAbbeten

We made cooperate taxes much lower in Canada and we are looking at around 1% growth for this year in GDP. We have record level cooperate profit but they are not hiring. The global collapse of capitalism was great for them. The middle class is going out of North America and tax breaks will never fix it. Middle wage jobs have been in large part replaced by low income jobs.

 

 When we learn that we cant count of a system based on imaginary wealth that promotes greed we might change and some thing different.

#135 Posted by comp_atkins (31812 posts) -

[QUOTE="Renevent42"]

[QUOTE="KC_Hokie"]

Have to become more competitive. Lower corporate tax rates and fewer regulations. Less government as a percentage of GDP.

Sarkyfritz

Wouldn't do anything at all to make using local resources more attractive. Outsourcing would still be cheaper, therefore companies would still do it. All lowering the corporate tax rate would do is put more money in those companies pocket to reinvest elsewhere. Those companies would still seek the cheapest/most efficient ways of doing business. As long as an outsourced resource can be paid pennies on the dollar from their American counterparts, lowering the tax rate would do zilch.

Not saying lower taxes is a bad thing of course, but in the context of this discussion it would have no effect.

The only things that would make a difference is:

a) Equalization of pay/cost. This actually already happens fairly often, for instance some of the countries that were extremely popular for outsourcing years ago are getting much less attractive. The reason? Standard of living INCREASED in those countires, forcing wages up equalizing the costs. The problem? Companies simply find less developed countries yet again and just outsource there instead.

b) Large proficeincy gap...meaning our work force is just so much better than outsourced resources using those resources would cause your product to be at a competative disadvantage. Aside from a few specialized areas though, this isn't a big equalizer as the workforce in other **** is actually pretty damn good.

 

Also you have to factor in that China has such a massive population that it will take a long time for them to increase there overall standard of living to anything comparable to western nations, if it's even possible at all. China has an almost endless supply of cheap labour.

i remember reading something about home depot trying to open some stores in china... took some time to catch on. the people who could afford to shop there were basically like "why the hell would i want to do a home project myself when i can pay some guy $1 to do it for me??"  different mentality.

#136 Posted by radicalcentrist (335 posts) -

We outsource way to much Canon-Gatorade


No, we don't. Why should we produce here what we can get for cheaper by producing stuff that we are good at and trading for it? Work is an instrumental good, not a good unto itself. If you are concerned about the effects on inputs to production (unskilled labor) that are intensive or specific to import-competing goods, then advocate redistribution from those that benefit to those that lose from trade. It's better than making our economy smaller by restricting trade in labor-intensive goods.

and while not entirely the issue with the U.S. economy, fixing it would help A LOT.



No, it wouldn't. Specialization according to comparative advantage benefits all nations, including ours.


#137 Posted by GOGOGOGURT (4470 posts) -

I suppose they can make things more expensive through tariffs but then nobody would be able to afford anything. We do love our cheaply made electronics and vehicles.DaBrainz

 

Actually vehicles are VERY expensive, even accounting for inflation.

#138 Posted by Abbeten (3002 posts) -
tariffs are an awful awful idea protectionism in general is terrible