A Thorough Look At The Real Issues Around Offshoring

from the worth-reading dept

There has been a pretty constant flow of stories about offshoring over the last few months - and while I've posted some here, I've been avoiding the stories over the last few weeks that haven't said much new. However, mhh has submitted this long, but absolutely worth reading article written by Daniel Drezner taking a very thorough look at all the issues associated with offshoring. He basically makes all the points I've been trying to make here, but does it much better, and backs it up with plenty of research. The kneejerk response is going to be for people to post anti-offshoring comments beneath this post, but I'd ask you to actually read the article first and think about what it's saying. The quick summary is that the direct impact of offshoring is much less than people make it out to be. The upsides of offshoring greatly outweigh the downsides. Protectionists policies make things much worse, and actually accelerate the problems people think are caused by offshoring. As for what we should do - there are three areas to focus on: (1) making sure companies understand the true costs of offshoring (and that they're higher than they seem at first) (2) making sure we have programs in place to help those directly impacted by offshoring and (3) making sure politicians don't take the "easy" political response, which will cause a lot more harm to the people they're trying to help. Read the full article, though, no matter how you feel about the issue.
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  1. identicon
    Mike, 27 Mar 2004 @ 4:19pm

    Re: Outlaw Capitalism

    What's really interesting to me is how few of Americans are truly willing to change their personal lifestyle in response to offshoring. When offshore labor was just blue-collar workers, we were all willing to stock up on cheaper clothing, cheaper cars, oodles of technology, etc. In fact, when you think about it, it was the explosion of computer technology offshoring (hardware) in the mid to late 80's that led to the proliferation of the personal computer....the so called "clone wars."

    This same benefit gave us the rise of the American programmer for software to run on these PC's. When Y2K rolled around, these same programmers started to "go rogue" and pursue a personal wealth-accumulation strategy by leaving the rank-and-file of employee status and going contract instead, demanding rates of up to $200/US per hour. The dot-com era fueled this further, until you had very small tech companies with labor burn rates of millions of dollars per month.

    Now, the employers are responding EXACTLY the way the professional white-collar workers trained them to....by looking to cut costs. Offshoring is just a cost-cutting excercise, and I for one believe that it will benefit the average American consumer to the same level that offshoring blue-collar jobs has...it will result in cheaper products and services.

    Get used to it, folks....we want cheaper stuff, we have to change (constantly). And for the poster who claimed that the American healthcare system needs reform before American labor can become competitive again, just wait. One of the single biggest savings I've had as an employer who has moved all my software development to offshore firms is that I've eliminated almost ALL of my healthcare costs from my bottom line. Enough other employers do that, and the healthcare system will implode on itself, having to look for ways to cut costs to remain competitive.

    First cheap electronics, then cheaper automobiles, then cheaper software.....next comes cheaper drugs, doctors and healthcare.

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