Tuesday, May 1, 2007

Outsource This

Outsource This

Props to this video, it shows the absurdity of offshore outsourcing.

The kids in this video intuitively understand real-world economics better than the "outsourcing is great for America" crowd of Ivory Tower no-think PhD dee dee dee economists, which I refer to here as PhDees

I concede that maybe to a certain extent offshore outsourcing is inevitable, given
1 global trade
2 universal internets
3 labor arbitrage factor: 5X+ USA/ChInd salary gaps between similar person with same occupation & experience
4 2B population in ChInd alone (China & India, or other low-wage countries with many knowledge workers). They can literally make to order (MTO), no Toyota production system, thousands of professionals in any career the MNC "TI" CEOs want

But even if some is inevitable, why does the US Fed Gov ENCOURAGE it, instead of encouraging employment of its own workforce? I believe the US Constitution says the government is responsible to the USA PUBLIC! Not MNCs, not the Asian public.

BTW no other "Western" OECD type of country wantonly screws their pubic like this. Japan, England, Germany, etc put up some type of protection for their workers. Call them "protectionist" if you want, I call that common sense.

Bear with me, this is my brief simplified history of the US economy
1 majority worked in agriculture, that died out with automation, PhDee advise workers to manufacturing industry

2 manufacturing declines due to factory outsourcing to MEX/CHN/etc & automation, PhDee advise workers to go to college to retrain as a "knowledge worker": IT/engineering/medical/etc

3 knowledge workers decline due to offshore outsourcing to ChInd, especially in IT & other engineering, but also in some other fields such as nursing & teaching. PhDee says to retrain to be knowldedge workers in the next wave of new industries: genomics, stem cell research, nanotechnology, etc

OH 1 PROBLEM PhDee, SF Bay Venture Capitalists (VCs) insist that their USA startup companies, from the birth/startup phase of the company, have 1/3 to 2/3 of their workforce in ChInd. So even the new future American MNC in nanotechnology may not really be American, with much of its workforce in ChInd from DAY 1!

BTW, this is 1 thing no outsourcing stan has been able to explain to me, what is the American economy going to do, if all that's left is these few jobs in new industries.

Of course the real answer is that this about LABOR ARBITRAGE, not skills. In other words MNC corporate welfare at the expense of American workers. The engineers, nurses, radiologists, etc laid off already have the skills, they just don't have the ability to work for $15K annual salary like ChInd.

Again, some of this outsourcing might be inevitable, but at least can't our laws put strong INCENTIVES for "American" MNCs to hire American workers, & disincentive for outsourcing, in the tax law? WTF!? Let's marginally improve the situation at least, since even a 10% reduction in future American outsourcing would help.

No comments: