White Collar Jobs: IBM plans to move them to India

[The Hunter of Jahanna]

Look, USA workers may be lazy and fat, but bitching about that DOES NOT SOLVE THE PROBLEM. Even if USA workers were quite industrious, like me (points to feet on desk ), there would still be one very simple issue causing the problem to linger: life COSTS MORE here, thus wages must be higher here. So, the lazy USA worker is a side issue, related but not the same. Oh, and we're fat because of an increased standard of living and a decreased food cost (relative to other goods) -- it's inevitable. Look at the wealthy women as opposed to the poor women in Rennaissance paintings and statues. I hate fat, and I work to avoid it, but there is a reasonable explanation for why the USA population is the way it is.

Life cost more here because employers have to pay people more than they are worth here. Think about American cars. Thanks to the U.A.W. a cheap american car will run you 15 to 20 thousand because they pay auto workers $40 to $60 an hour to build cars. Imports , even after trade taxes, are still cheaper to buy and in some cases more reliable too. The same can be said for most jobs. For some reason people think that just because they are americans that they deserve a higher wage than the next guy.It makes almost no business sense to pay americans their over inflated wage when you can move the whole operation to somewhere that the people will be glad to just have work.

[ 07-26-2003, 04:48 PM: Message edited by: The Hunter of Jahanna ]

[Timber Loftis]

Insightful post, Hunter of J. I've found the UAW insists on pay of $25-30 an hour, though. It seems your numbers are a bit inflated (but things may have changed in recent years).

The numerical discrepancy aside, however, getting paid $25+ per hour to tighten bolt #305 is silly, IMO. HOwever, if you are getting paid (as may be the case) $25+ an hour to supervise 4 robots designing and installing parts #305 through #405, maybe that is different. Regardless, I think the UAW is a shinning example of union power and misbeahvior.

I guess there is a lingering question: Will bringing wages down make prices go down?? Dunno, in all honesty.

I must say, however, that import cars are NOT cheaper. Blame it on the tarriffs if you will, but the Rav4 I bought in 2002 was upwards of $26K. That's quite a bit. I'd be interested in comparing it to the Ford Explorer, a larger model with more add-ons. However, the sheer gas mileage issue made us opt for the Rav, so I didn't even check Ford's prices. [img]graemlins/1ponder.gif[/img]

[Skunk]

That's quite a bit. I'd be interested in comparing it to the Ford Explorer, a larger model with more add-ons. However, the sheer gas mileage issue made us opt for the Rav, so I didn't even check Ford's prices.

Of course, you could have come out smiling if you'd bought a Ford 'oops was that the tyre that just blew up' Explorer and then sued (on the supposition that you survived, that is).

[WillowIX]

So? This is happening all around the globe. All industries move to cheaper countries. And not only the work force, as in wages, counts you know. There are several fees and taxes the corporates themselves need not to pay in other countries. And then there is of course several major cultural differences, which (I'm sorry TL) WTO can't take into account. It's not possible for the WTO to tell Asian workers to not come to work an hour earlier than expected. And if we want a free market the US itself has several things it needs to cut down on, such small things as subsidies and tolls. But let's face it, the market will never be free. [img]smile.gif[/img]

[ 07-31-2003, 05:49 AM: Message edited by: WillowIX ]

[The Hierophant]

Originally posted by Timber Loftis: Okay, losing the blue collar work is expected. But, when the white collar work goes too, well, what's left?? Does globalization mean that ALL US jobs will leave the US? What then? Just leave America as a poverty-stricken wasteland? Promises of 1 fast food sh**ty job per family? This really worries me.

Yeah, of course. What, did you actually think that capitalist profit has national loyalty or something? Money doesn't pay attention to squiggly lines drawn on maps.

HAhahahaha. Oh man. TL, you're ALLLLLLLLLL-right! [img]smile.gif[/img]

[Skunk]

And if we want a free market the US itself has several things it needs to cut down on, such small things as subsidies and tolls.

That's not really the issue and I think that you are worrying unneccessarily.

Why do big companies choose to remain in the big industrialised countries like the US? Let's face it, if you set up shop in say, Pakistan, you are going to enjoy a low wage budget, low taxes and low land values - so why havn't all companies relocated?

1. Communications and technology: For most industries, being close to your customer base is a definite advantage
2. Political and social stability: No use setting up shop if, a years time, 'the peoples army nationalises it/burns it down.
3. Levels of Corruption: Man it sucks to have to pay petty officials large amounts of money just to operate a legitimate business.
4. Skilled/Educated workforce: This is *the* most important factor - access to a skilled or educated workforce is a 'must have' for most modern industries.

You know, this is a familiar pattern that we are witnessing with IBM. The same thing happened before in the 70-80's - only that time the jobs were going to the far east, places like Hong Kong, South Korea etc. Western nations survived. Why? Because as a labour force becomes more educated, it tends to demand more from the fruits of its labour. Workers start to demand higher salaries and better conditions. Pretty soon (within a couple of decades), it isn't much cheaper to set up your business there than it is where you were originally located.

India has finally achieved the levels of education and built the infrastructure neccessary to attract foreign companies - but the 'pull factor' will not last forever - and right now, there are few other 'poorer' countries that are nearly as close to the level of industrialisation, education, etc as India is. Look at its neighbours as an example. Pakistan will take years to achieve parity with India in these areas...

[Timber Loftis]

Good points, Skunk. However, in the 70's/80's uprooting and moving a company to Taiwan meant building new plants, etc. In this age, outsourcing 50% of a company's programming and support services to India only requires leasing an office building and some computers -- everything is so digitized. I think this means the flow of jobs from US to India, and then elsewhere (once your prediction comes to fruition) will be done much faster and more often.

[Yorick]

Would you operate to acheive sustainability rather than growth if it benefits your county? Or would you make huge profits and see your country go down the toilet?

I think the problem is C A P I T A L I S M and the love of money.

[Grendal]

Obviously moving companies to third world countries is no good for the ones losing their jobs, but come on...realisticly...if YOU are the owner of a company you will do what it takes to make it more profitable. Isnt that the american dream? Its all about bucks, are you going to pay someone $35 an hour to clean your car when you can go next door and get the same job done for $15 an hour? We can bitch and whine all we want but its ultimately up to the owner (s) of the company. BTW I dont agree with it just throwin that out there for arguments sake.

[Sir Kenyth]

Originally posted by Grendal: Obviously moving companies to third world countries is no good for the ones losing their jobs, but come on...realisticly...if YOU are the owner of a company you will do what it takes to make it more profitable. Isnt that the american dream? Its all about bucks, are you going to pay someone $35 an hour to clean your car when you can go next door and get the same job done for $15 an hour? We can bitch and whine all we want but its ultimately up to the owner (s) of the company. BTW I dont agree with it just throwin that out there for arguments sake.

The problem is, moving jobs to different countries only has short term benefits. You get a bigger fruit this harvest, but you poison the soil. Economy is the "flow" of money and it runs full circle. It will eventually hurt the company as it's local customer base it whittled by lower wages. The lowert wages coming from competing with those foreign work markets. Then again, short term profits seem to be the way corporate america likes it these days.