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an economics question (has to do with outsourcing)
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| AnotherWay83 |
just wondering about this whole outsourcing thing and how its going to affect jobs in the CS industry cos im a CS major...i think the main reason companies continue to outsource jobs is that its a lot cheaper in those countries...but if that really was the reasoning then why didn't we just experience a drop in wages here instead? that way the jobs would stay here even tho the wages would go down...
what am i missing here??
thanks |
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| Yoepus |
| you better move to India quick, thats where the jobs are at :toothless |
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| AnotherWay83 |
| quote: | Originally posted by Yoepus
you better move to India quick, thats where the jobs are at :toothless |
haha yeah...india, china, and russia mainly...but i still dont understand why |
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| NYCTrancefan |
| I was wondering about when this would be mentioned, I frankly am not against it, but wish that some of the people who answer the phones could speak better English. One of the chief outsourcers is Dell Computers. I have a Dell and whenever I call for tech or customer support I am answered by someone who I have to repeat to about five times my problem for calling and then they seem clueless as to what I am speaking about. I swore off Dell for this primary reason, if you are going to outsource make sure that the customer can communicate with the workers in one of your frequently used departments. |
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| trunks1022 |
| quote: | Originally posted by AnotherWay83
just wondering about this whole outsourcing thing and how its going to affect jobs in the CS industry cos im a CS major...i think the main reason companies continue to outsource jobs is that its a lot cheaper in those countries...but if that really was the reasoning then why didn't we just experience a drop in wages here instead? that way the jobs would stay here even tho the wages would go down...
what am i missing here??
thanks |
in econ, opportunity costs play a role in free trade. if it can be done cheaper elsewhere why not. would people here stand for cheaper wages too? naaaaah |
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| MrSquirrel |
| quote: | Originally posted by Yoepus
you better move to India quick, thats where the jobs are at :toothless |
You aren't hiring on yer mustard farm?
:p
MrS |
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| AnotherWay83 |
| quote: | Originally posted by trunks1022
in econ, opportunity costs play a role in free trade. if it can be done cheaper elsewhere why not. would people here stand for cheaper wages too? naaaaah |
see, if i was offered just an OK paying job, even as a programmer, id take it up because i love doing that job, and all im really looking for is a job that pays me decently, im not looking to become a friggin millionaire.
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. its only a matter of time i think before there is a backlash, already they were forced to drastically curb the number of H1-b visas they could give out...this of course only made things worse because now the companies are sending the jobs abroad...i figure that even if congress intervenes companies will always figure out ways to get around restrictions against outsourcing.
as a CS major im seriously considering other options now. |
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| ahlamalek |
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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| AnotherWay83 |
| u've made some great points, ahlamalek. i hadn't thought about all those extras... |
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| imokruok |
| 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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| AnotherWay83 |
i recently spoke to someone who holds a high position in a company and he actually told me how they were making more money now that they had sent programmer's jobs elsewhere.
but u're probably right, too...i dont really know... |
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| Shakka |
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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