Who is to blame for US outsourcing 39

[EngineerDave]

I bring this up not to start a political war. I am an independent by the way but find myself leaning more towards the conservative side as many engineers do.

Democrats are starting to blame Republicans for loss of jobs due to outsourcing.

The way I see it both Democrats and Republicans are responsible for not securing good trade agreements. It seemed both supported NAFTA heavily in 1992. That is but one small treaty governing trade for North America.

What is the solution. I honestly don't believe any politician will have a solution for such an economics driven problem.

 

[metengr]

ScottyUK;
"Born in the USA" released 1984, the song is "My Hometown"

http://www.lyricstime.com/lyrics/28974.html

 

[Maui]

ScottyUK, "Born in the USA" is the album. The song is titled "My Hometown". This song paints a sad but accurate portayal of the gradual erosion of the manufacturing base here in USA.


Maui

 

[Tobalcane]

“It is those damn poor people in other countries. Shame on them working for low wages.

We have got to put an end to this!”

Yes, lets talk about those ingrates who are trying to support their families. The flip side of us loosing our jobs, on the manufacturing side in the third world countries that are run by USA companies or USA companies hired third world companies to do the dirty work for them, I am sure that the workers are being taking advantage of. If OSHA or unions ever got a chance to go over and see the conditions that the workers are working in and to see how they are being treated, they would be applaud. Wonder why their wages are so low, one part is economy and the other is that the company (third world and ours) knows they can get away with horrible working conditions (no over head to keep employees comfortable), most are women desperate for work (down to the bone wages), and long hours (if the employees don’t get the order done, they will hire other people to replace you). Worst of all, some turn to child labor, the American flag the you have bought was probably made by a twelve year old who worked 70 hours for the week and only got paid $1 and hour.

Now being a son of an immigrant, I have mix feelings for this practice. Yes it is bad to take advantage of them, but they need the work. If the work was not there, there could be worst ways to make money. From their perspective this is great! I have seen a documentary on PBS on working conditions in third world countries. Most workers that they interviewed were glad that they had jobs so that they can support their families. That they were in worst conditions be for the companies opened up in their town.

I guess my point is that if these third world country workers were treated like first world employees, third world country cost to produce product would start to reflect the first world’s. I don’t want to take the work away from them, but they should not be taken advantage of because of the greed of the company.

Well I’m going home, have a great weekend everybody!



Go Mechanical Engineering
Tobalcane

 

[GregLocock]

Just a point there. I've been to countries where the pay for a dangerous day's work for an adult was $2, so $10 for a ten hour day in a shed is looking pretty good.

That is the advantage of industrialising, sure it is ugly in many respects, but the money DOES filter down. Not in a fair fashion, but overall it does eventually get to where it is needed.

If the Isolationists won, and Fortress USA closed its borders to all trade, what sort of standard of living would you have? Who'd be picking the tomatoes? Who'd be buying your airliners?





Cheers

Greg Locock

 

[Lorentz]

Hello All!

I agree with metengr that there is no way to stop what is happening, and I cannot blame poor people in developing countries from jumping at any opportunity to provide for themselves and their families.

That said, I have heard reports that while prices in the 1st world may be slighter lower due to off-shoring to low wage countries, the wages paid to the workers is so low that the profit margins for companies involved in this practice are skyrocketing.

I recently heard of "free trade" or "fair trade" coffee, where consumers are guarranteed that the product they are drinking was not produced under conditions that exploit the workers. And I just found the link below:

http://www.fairtradefederation.com/index.html

If there must be off-shoring, at least let it result in a substantial improvement of the living conditions to the newly employeed third world workers.

Perhaps politicians in the 1st world could be encouraged to pass legislation that bans imports that were produced under exploitive working conditions. This of course would help workers in the developing countries, and it might make off-shoring of some jobs less attractive.

 

[Dorfer]

AS many of you have stated the demise of manufacturing has been progressing for my entire 25 years in the machine tool business. The loss of companies like Ingersoll Milling Machine and many other machine builders has left a sadness every mechanical engineer should feel, whether or not you are winning or losing from global competition. Only in America would our goverment allow the divisions of Ingersoll to be purchased and operated on our soil by the Chinese. Remember Henry Ford said years ago, in order to create wealth in this country you need to manufacture things. We as manufacturing people make this economy move, we buy what we can afford and have always purchased products we helped create. We are in a difficult transition into a technology based versus manufacturing based economy of which thousands of our citizens will not fit in. Our polititians say to just retrain them and everything will work out. That is just blowing smoke. As an Engineering Manager, I have seen and worked with hundreds of people in the trades of whom their careers are over, lives torn up, and are finantially ruined. Our standard of living will drop, just as in the trades, as we attempt to earn a living by tradeing service dollars with each other. What is wrong with protecting the standard of living we enjoy and that of our children? We as Americans, as in this string, need to stop being so idealistic and do what is best for our citizens, we are the country. It is facinating to watch how capitalism continues to churn and recreate itself, but there will be seious consequences for all of us. By the way, I never shop at Walmart, Dollar stores or any other outlet for exploiting cheap labor, and will pay more to purchase American goods, if I can find them.
Dorfer (Mechanical)

 

[BJC]

Dorfer
The way the national debt works is the government sells bonds to finance the ongoing operaton of the government. Guess who is the largest holder of US government bonds?
The Chinese and the Japanese, whether Smoky the bear needs to put out a fire or the army needs to buy some bullets, it depends on a foreign government or bank buying US bonds. They make enough profit on the intrest and other things they sell to buy Ingersol Rand and whatever else they want. Look around your desk, how many things can you find made in China? If they sell us enough fifty cent items they can start buying whole states.
The Wall Marts etc. selling cheap consumer goods are the way they have gotten a hold on the country. They hold the mortgage on this country and call it in when they want to. It may not be fatal now but it would hurt if they stopped "loaning" us the money to run the government. I don't care if your Liberal or Conservative, Republican or Democrat running the national debt to record heights is beyond stupid it's treasonous.

 

[pmkPE]

The original post is entitled “Who is to blame for US outsourcing?” Why blame anyone. We need to understand it If another country was outsourcing their jobs to our country we would be thrilled to have it. I think the concerns are that the corporate environment that our parents and/or perhaps our grandparents worked in is changing. It has only been a blip on the time line of history that companies had direct employees and set them up for health care and pensions. Prior to just 100 years ago everybody either was an indentured servant, worked for themselves or with relatives and most likely worked on the farm. In the agricultural pre-industrial era people grew their own food, hunted their own meat etc.

With the sky rocketing costs of health care (which is not helped by multi-million dollar law suits for personal injury) greedy corporate executives robbing pension funds, and the increase in competition it is no wonder that company’s here and abroad are looking for ways to cut costs. It is their responsibility, it is necessary to stay in business to make money via profits. Money and profits are not wrong, or evil. It is a fact of business that without making profits, raises are not funded (cost-of-living and merit), capitalization is also not possible - building up with new buildings, vehicles, equipment and new staff. If a company does not grow, or earn more they must cut costs to maintain a margin in the black. If they don’t they go under and then even more jobs are lost.

College taught us how to use our abilities to solve technical problems, call it a tool box - college didn’t tell us the answer to many problems - only what “tools” to use to evaluate and solve the problems that we would encounter. Well now we need to utilize our “tools” and solve our problem of how to be in demand. It is called marketing and yes it may also require relocation (there also is telecommuting which is a form that many outsourcing jobs are taking). Outsourcing of blue collar jobs has been going on for decades but the white collar crew was not concerned until it started happening to them. (After all a recession is when your neighbor is unemployed, a depression is when you are unemployed). Remember the exodus of jobs from the rust belt to the sun belt? Hey, what’s the problem, if they wanted to work they could have relocated instead of griping about what things used to be like. Now the exodus is from the sun belt to Mexico and then in many cases from Mexico to China; some even skip Mexico and go straight to China! Having an education should mean that we should be better equipped to recognize changing trends and be ready to deal with those changes.

One solution is to support our team, i.e. the people we work with, rather than trying to cut them down so we appear to stand taller. Help them learn their job better. When everyone performs better the company (i.e. the team) benefits which results in better profits and therefore better raises and working conditions for the team. The Army has a marketing call “Be Your Best”. If everyone on the team could learn as much as possible, to do as much as possible they would not only be more valuable to their company but also to their selves. When you look for a job an employer doesn’t need to hear what you want from a position with them, (they already have a good idea) they are looking to hire someone so that someone will do something for Them so they/their company can be more productive, have better quality etc in order to make money and improve profits and stay in business. We as engineers need to market ourselves better. Our first client is the company that we are working for, not just the other company’s that our company sells to. Also think of your associates as your clients, by helping them you help the company and in turn that helps you - remember better conditions, raises etc through growing profits. If you’re concerned that you won’t get the recognition from helping others do their jobs your wrong. Your associates will see it and they will not only appreciate you but they will remember you when it comes time to refer someone for a project or a job.
Which leads me to the next part: remember the type of job conditions where people signed on to a company for life, with health benefits and a pension is probably only a blip in history. Therefore the better known anyone is, the better chances they have of finding new work when the time comes to move. Those people you helped in the past will remember you and someday one of them is going to be somewhere that their influence can help you. If you are known as a chronic complainer only out for your self - do you think the people that know you will help you when you need help? Only if you are the very best and they have no other alternative, maybe.

Back to outsourcing - some jobs can’t be outsourced. And if you want one of the jobs that is being outsourced you need to find a way to market yourself and your abilities to save a potential client some money by using you rather than someone much less expensive. (You may have to cut your pay, i.e. costs, just so you can do the work you desire.) Most of us want more money but that may not be practical, even if you are up to your eyeballs in debt. Be competent and be able to verbalize why you are competent and think of ways that you can quantify what a potential (ethical) employer wants. Just because they are in the position to hire it does not mean that they are using you as in abusing you. Employers have stresses just as great if not greater than employees when it comes down to remaining employed i.e. in business. The finiancial burdens are great for small business which are usually fininaced by one or more individuals using their homes for collateral - they are well aware of the pitfalls. The only solution is to be better, be quicker or cheaper. Pick two.

 

[metengr]

I notice that the same theme keeps surfacing regarding Wal-Mart and other companies that sell goods not made in the US. Putting on my consumer cap, I shop at Wal-Mart or any other store for that matter because of PRICE - pure and simple. Sorry folks but I, like other Americans, can't and won't go out and pay a high price for what, something that is made here and is of comparable quality as manufactured overseas??? I don't shop to maintain jobs, I shop because I like most people have a budget and need to survive.

No, I don't like the fact that products are made overseas, but this is life and we must move on.

Regarding trades, I don't know about you, but homes are sprouting up like weeds by me. Trades people consisting of carpenters, bricklayers, plumbers seem to be actively working in my location. In fact, a friend of mine, his cousin owns a company that makes street sweepers. He can't find experienced welders.

I work for a power company that is contracting boiler repairs left and right because our maintenance folks don't want to work the overtime and don't want to work in hot, dirty boilers. They are an older work force, and frankly who could blame them. We have not been hiring younger union guys to take the place of older workers - we simply outsource this activity.

If I had kids in high school that were not compelled to go to college, I wouldn't force them to attend college. Instead, I would send them to a trade school and learn an employable trade. There will always be road construction, housing, repair services to maintain our standard of living in this country. These jobs WILL NOT be off-shored. The fact is white collar jobs (certain engineering occupations, middle manager types) will decrease over time and working in targeted trades and services sectors will increase.

So, I like other Americans, will shop PRICE and VALUE. This will apply to cars, homes and other goods and services.

 

[2dye4]

Outsourcing is only a symptom of the bigger problem. As manufacturing
effeciency improves it takes fewer and fewer people to make the goods.
That leaves most people in service industries. Globalization is a further
increase in manufacturing effeciency. What has happened to machine tool
builders, farmers, electronics, steel, and now software and engineering is the
expected progression of a global economy. Formerly professional people
are not going to be needed in the future just like those blue collar people
have allready learned. Many say to hold on there are new industries just
waiting to be born. The trouble is that in the past decades before the internet
and computer boom people still had an inkling of an idea about the future
of computing, cell phones, internet because these things had concrete
value for human activity. The wait was just on technical achievements to
make them possible. In all past times one could say "wow we have a lot
of stuff but if we only had ***** and **** we would be there". Now I
challenge you to guess now what it is that we can manufacture that will
have a serious impact on our lives. Weren't we suppose to arrive one day
as a society and see our work hours decrease and relax and let the
machines do some work for us. We are there. However with the current
economic situation you will be able to afford to buy only commodity
items which will be available in abundance and rent a decent place to live.
The technical middle class is in trouble. The economists say that the
standard of living is higher now because even homeless people can afford
to buy a DVD player. I don't know about you but the ability to buy gadgets
does not affect my contentment. People like to build wealth and security
in form of savings and professional skill building.
Lets all go to Law, Medical, Pharmacy, Nursing school.

 

[liberty]

Some great points being made here, it's no wonder engineers never get picked for civil suit juries and rarely run for office. We are just too smart!

Some suggest banning the off-shoring of white-collar jobs to where white-collar labor is exploited, but realize that as exempt employees that means we are often exploited anyway. I'm convinced that I work mandatory 60 hour weeks (unpaid OT of course) because my company can only afford to hire 2 engineers for every 3 required. And there are no unions or laws fighting such exploitation here. My wife is steaming mad about it and after some weeks my options boil down to "pick a new career" or marriage counseling by Dr. Phil.

I've known a few engineers from other 1st world countries who ran into the same issue (in the UK entire graduating classes of engineers have been "thrown away" during recessions, it's not a pretty picture). They either went into manual labor and heavy drinking, or got very innovative and took the plunge into developing leading-edge technology, usually as owners of their own business. It's a desperate situation and will depend on how desperate you are. Our jobs are being taken by hungry people who are happy to work 18 hour days, so you have to be hungrier. Or smarter.

It might be time for you to stop designing widgets and jump on new trends like nanotech, hydrogen, etc.

 

[ScottyUK]

Hi Liberty,

Only 60 hours a week?

My wife has a similar opinion of the hours I work. She's even suggested that I wrap at work and she will pay the mortgage while I retrain as a gas fitter. It is a shameful state of affairs when a Chartered Engineer is seriously considering abandoning his profession to pursue a trade where the hours are just as bad, but at least they are paid hours and I don't have to work O/T for free.

Our department is carrying the workload of twice our number, and in the meantime we see the numbers of people employed in politically-correct non-jobs elsewhere in the company rise and rise. To add further insult, these non-jobs are all 9 'til 5 and well paid!




----------------------------------

If we learn from our mistakes,
I'm getting a great education!

 

[davefitz]

One way to dampen the increase in outsourcing is to add a value added tax VAT to both goods and service provided from overseas. If nothing else, it contributes to the tax revenue and offets the loss in revenue caused by increased unemployment, and is permitted under WTO rules.

 

[pmkPE]

ENR has the following editorial regarding offshoring:

http://www.enr.com/opinions/editorials/archives/040802.asp

 

[Maui]

davefitz, the US imposed protectionist policies in the early 1930's to try and protect the economy. We are all familiar with the resulting disaster that ensued...

 

[GregLocock]

Davefitz, those are import tarriffs. Your protected industries will become lazy and inefficient. You will find it very hard to export things, since most countries maintain some sort of tarriff parity. The net result is that your industries will die.

To take an obvious example, look at the US steel industry. They succesfully petitioned for tarriffs, and got some huge bailout for 'restructuring', about 10-20 years ago. They did nothing, got fat and lazy, and now they're pretty much dead.

The fundamental issue for this forum is that USAn engineers are paid about 30% more than other first world engineers, and while I am sure that they are as good as other engineers, that is a 30% cost saving that cannot legally be ignored by a shareholder owned company.


Cheers

Greg Locock

 

[liberty]

60 hours is a short week lately. And when I'm traveling for 3 weeks at a shot, I stop counting. Since my work is defense-related I don't have to worry about my job being offshored, but these contracting firms know how rough the job market is, especially for guys who would rather not relocate. This pressure drives the insane hours and stress levels, and I guess life is a little easier on the single no-kids guys -- they don't have to worry about the lack of another life so much. Engineering will make for a nice hobby someday because I love doing it, but these hours would be better spent as a doctor, lawyer, or Jeopardy contestant.

Who is to blame for US outsourcing/offshoring? We are, for demanding good pay and reasonable hours. And info tech is, for making it so easy to outsource design and manufacturing.

My hero is Dilbert's janitor.

 

[notnats]

Greg Locock knows what he is talking about.
Until about 25 years ago, the manufacturing industry in Australia lived behind massive tariff barriers. Our company had 45% protection on some products. Guess what, we never exported anything.

These days we have virtually zero tariffs on most things. A lot of companies have felt a lot of pain and many have disappeared.

However, those that cut away all the fat that was being carried by the tariffs, have found that they have a global market. One of those is the Australian automotive industry and the component suppliers. The engineers at Ford and GM Holden here are making great cars and selling them everywhere(The Pontiac GTO for example.)

Yes, most of the cars sold here are imported. Yes, I think every stitch of clothing I am wearing was made in China, but we are all in the process of finding a new balance and I don't think artificial government imposed regulation is going to change that.

Jeff

 

[Dorfer]

The facts will remain to be seen in the next five to ten years, but most people now agree that reduced prices brought by globalization are not worth the sacrifices made by Americans today. Let alone the sacrifices made by the poor people creating all the junk we buy. My experience in the Machine tool industry with suppliers and other manufacturing companies reveals that people are learning to to with less. I don't buy new cars anymore, appliances, own a boat, campers, jet skis, ect. Most of my counterparts, who used to earn good salaries and bought all these toys are buying no longer. They are underemployed, working in other low paying industries, not looking anymore or just plain unemployed. Add these people to the unemployment roles and the number far exceeds the government 5.6% rate. Which means we pay less taxes to support our city, state, and federal governments. We are the guys who cranked up the economy. All this so we can save a few bucks at the register? It is no wonder the economy cannot get moving again with any real strength.

The perception is correct that as long as we are driven by Wall Street quarterly profits, and do not adopt any real long term rational thinking as a nation, we will continue to export our skills, technology, and way of life. All we have to do is mirror the mission statement from Toyota and execute their business model, they got it right. They move slowly, methodically, quality driven, with a long term strategy to build every car in the world. Fortunately I have convinced my five kids to stay out of manufacturing and go into the health sciences, or research. As a professional engineering manager I cringe every time I talk to a graduating high schooler who wants to be a mechanical engineer. There are still jobs available but I tell them be flexible, willing to relocate, and work some pretty long hours. Go for it.

 

[davefitz]

Greglocock;
As per WTO rules, the VAT cannot be imposed only on imported items, but can be imposed on a whole class of goods and services equally whether local or imported.

If we were to switch from an income based tax to a consumption based tax ( VAT), then it would make US goods and services more competitive in that it would lower the implied overhead of income tax, social security tax, medicare tax, ( and medical insurance premiums, if one also goes to fund a national health insurance via VAT)by a maximum of 25+15+10 % = 50%.

To avoid burdening low income people , the VAT would have to not apply to foodstuffs, nonluxury clothing , housing,medical services, etc. And to custom design the VAT to primarily address only items which are typically imported ( while remaining valid under WTO rules) then it would not tax the types of service taht are almost certainly local only, such as child care, home health care, equipment repair + maintenance , etc.

Of course, everything else would have its price increase by 50% max, which would be a hard pill to swallow, and temporarily it would boost teh value of every item and service which is not similarly taxed.

Anyhow, it is not a new idea- most other countries are already using a VAT to fund social programs and to reduce teh competitiveness of imported goods and services.