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Yoepus
Neo-condimist

Registered: Jan 2002
Location: Ketchup fields, Texas
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Jan-02-2004 04:41
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malek
drinks your milkshake!

Registered: Nov 2001
Location: Montréal
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why cutting salaries won't do in the states is because some programmers wont accept those positions (yes some of them still want those 100K jobs). But most importantly, you see a company doesnt only pay your salary, they have to pay all the social advantages like health insurance, dental, paid vacation, overtime hours, bonuses, training, rent in the building where you work, employment insurance, etc etc
it might be crazy to say that, but they could pay yearly as much as your salary to cover those things.
I can give an example about my job, i get a measly 36K, but these guys have paid about 15K only in training and I have worked only for 6 months, plus 4 paid weeks vacations a year, 10 paid days a year when i get sick, etc...
so imagine in India where not only wages are dirt cheap, these things I stated before cost way less or even in some case don't exist in that country.
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[/IMG]http://i54.tinypic.com/ngycqo.png[/IMG]
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Jan-02-2004 06:20
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imokruok
Lawyers, guns, and money

Registered: Aug 2003
Location: Los Angeles, CA / Milwaukee, WI
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Re: Re: Re: an economics question (has to do with outsourcing)
| quote: | Originally posted by AnotherWay83
the immense amount of money thats being saved by these companies is ultimately ending up in the pockets of just a very tiny minority of the population, those at the top like CEOs and others, while a vast number of ppl. are being forced to accept lower standards of living. |
That's hardly the case. One of the reason companies like Dell outsource is to lower the overall price of their product. If Dell were a monopoly, they would have no interest in trying to lower the price of their product, but because they have competition from other computer makers, they take competitive steps to reduce costs which result in a lower price for the consumer. It's simple economics.
The effect is even larger with manufacturing. You can walk into Wal-Mart and buy a 13" television for $60 and an air conditioner for $80, both made in China. These prices are far lower than people have historically paid for these products, even taking into account inflation. The standard of living in Western nations, particularly in the US, has only gotten higher as people who make low wages are able to afford more for their money. That is what free trade is all about. Do what you do best, and let someone else do what they do best for a cheaper cost.
And for those who don't quite understand the benefits of "profit", see here: http://www.townhall.com/columnists/...s20031223.shtml
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FLUSHED THE JOHNS!
Last edited by imokruok on Jan-02-2004 at 15:33
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Jan-02-2004 15:26
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Shakka
Supreme tranceaddict

Registered: Feb 2003
Location:
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It's a double-edged sword, and the terms "absolute-advantage" and "competitive advantage" are central to the whole issue. The benefit of having products manufactured cheaper elsewhere is that it reduces the total cost of the product, enabling society as a whole to be able to purchase the finished good at a lower price, and thus it is arguable that everyone is benefitting from the outsourcing of labor. The downside is exactly that--jobs at home either get sent away to another country or someone has to take a deep cut in pay to match what the company could save elsewhere. This will always be the case in an industry that produces goods--based on the producers' respective advantages (access to resources, better educated workforce, cheaper labor, etc.)
Like it was said earlier, while you may be willing to work for less, it's highly unlikely that everyone in a given field would be willing to work for less. Some need the higher pay to afford things like their living expenses, school, healthcare, etc. It just may not be feasible for someone to trim their own budget (similarly it's a lot harder to pass a tax increase than a tax cut.)
Unfortunately in the computer science field, and a lot of other fields, the value of intellectual capital is declining as more and more people are able to perform the same programming/technology tasks as you, but at a lower total cost due to their country of origin.
A good solution may be to focus your efforts on finding a job that is more service related as opposed to a job where you are producing a finished good. Service related occupations are usually driven more by the ability of the person performing the service, so if you are good at what you do, you should be able to demand a good price for the service you perform without as much fear that your company may recruit a bunch of Asians or Mexicans to replace you. That said, there is always the risk that there is someone out there who does as good or a better job than you at whatever it is you do.
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Jan-02-2004 20:55
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