As usual, I will once again touch a very sensitive and controversial topic. Please comment or email to further enhance the discussion.
There is so much hype about outsourcing these days that an average blue collared 'Joe' constantly thinks that he is out of that manufacturing job where his last two generations were working and is not being able to feed his family because of outsourcing. In Midwestern manufacturing State like Indiana, Michigan, Ohio, etc these feelings are rampant and average people think that because of some "gook" in or from SE Asia who is less qualified and is cheap, they are out of a job! Cheap he or she maybe but is certainly not any less qualified. And the cost of this 'cheap labor' eventually may go up with the supply and demand cycle. The debate here is not the education level, work ethics or not even the language? The real statistics is that outsourcing of US manufacturing jobs is such a low percentage of the US employment market that it actually maybe a non issue? As majority of outsourced jobs are actually in the IT sector which was never a US main stream job speciality and was mostly traditionally done by immigrants. In my own experience it has actually hurt the Foreign immigrants more than the local Americans. I have seen so many IT professionals who were courted by the big and small software giants in the 1990's and were paid heavily and were shown the "American Dream" to immigrate, who now either have no jobs in a foreign country or had to move back to India or China. They have suffered a major brunt of the IT outsourcing to India and other Countries just as much as average "Bubba" has! I even know of a few Indian origin people who lost jobs in Silicone valley and are back in India and are doing the same or similar job at a much lower remuneration's than in Silicon valley as now they have to compete with a lot more qualified and an ample young Indian workforce who are ready to work night and day and who have not seen the luxury of "clocking out" on bankers hours or are not used to a time and a half OT.
Even though US has lost only less than 1% of the manufacturing jobs to outsourcing, still, the jobs do go overseas and a lot of people lose their livelihood because of the outsourcing but can we just blame the "Asians" and not own up-to our own work ethics and our own really high "price point" of manufacturing due to Unions, overtime policies and local and federal tax ordinances. The big Corporations have to resort to outsourcing to be competitive with other MNC's to make profits in this Global economy. We also hear a lot about big corporations opening plants in emerging economies like India, China and Brazil etc lately. We see it on TV or read about it the press and we jump again and blame the 15% plus unemployment in Michigan on to these plants and the "Asians"! The truth is that we have lost the local end-consumer market shares of the US made products due to quality and pricing and we don't even have enough consumer population to go out and buy these products. We all know how much of population loss and outflow has happened in greater Detroit area alone.
Another hard fact is that we hear a lot about GM setting up a manufacturing plant in China or India only because that's where they are selling more (these cars dont come back to be sold in US) rather than trying to "offshore the neighborhood jobs" These emerging markets have the young, new products savvy, cash yielding population to buy these products these days. We need to change the mindset, change our skill sets and retrain our means and ways to earn the "Moolah" 'cos whether we like it not and whether we want to believe or not, the emerging economies do exist and are only going to rise in GDP, market share and power. We can't resist the global economic swing as the pendulum has already swung half way on to the other side!
What we need is to come out of denials and re-think our strategy to take on the World again. For example, take all the empty extra land around the Metro Detroit airport, even after the NWA/Delta hub expansion and think of a ancillary industries consortium where medium to heavy machinery flies in and gets fixed, repaired, retooled and fly out immediately. We can set up training schools around that area for tool and dye skills and so much more. There is enough hard working, skillful work force in Michigan to get together as a community and turn that Beautiful Great lakes region to one of the best in the Country once again. We took on the Hollywood project in Detroit area and is going well but I think the 40 cents on a Dollar cash-back to Hollywood fat-cats won't cut it for the hard working men and women of Michigan. We all know Granholm wasn't the smartest Governor around. She failed for me ever since she could not help save KMarts's headquarters in Troy. A few rich and well connected guys will get to those movie shoots, socialize with the stars and will push their kids in some odd small time acting roles and the real locals, who have dedicated their lifetime to Detroit will still get nothing! And if other states offer same to these studios they will abandon us and run. I get a little passionate when talking about Michigan! so getting back to outsourcing......
I am including an article I read online and posted on facebook last year which gives a little insight in the "Outsourcing Issue".
~Dr V
Truth about Outsourcing, informative article!!
There is so much hype about outsourcing these days that an average blue collared 'Joe' constantly thinks that he is out of that manufacturing job where his last two generations were working and is not being able to feed his family because of outsourcing. In Midwestern manufacturing State like Indiana, Michigan, Ohio, etc these feelings are rampant and average people think that because of some "gook" in or from SE Asia who is less qualified and is cheap, they are out of a job! Cheap he or she maybe but is certainly not any less qualified. And the cost of this 'cheap labor' eventually may go up with the supply and demand cycle. The debate here is not the education level, work ethics or not even the language? The real statistics is that outsourcing of US manufacturing jobs is such a low percentage of the US employment market that it actually maybe a non issue? As majority of outsourced jobs are actually in the IT sector which was never a US main stream job speciality and was mostly traditionally done by immigrants. In my own experience it has actually hurt the Foreign immigrants more than the local Americans. I have seen so many IT professionals who were courted by the big and small software giants in the 1990's and were paid heavily and were shown the "American Dream" to immigrate, who now either have no jobs in a foreign country or had to move back to India or China. They have suffered a major brunt of the IT outsourcing to India and other Countries just as much as average "Bubba" has! I even know of a few Indian origin people who lost jobs in Silicone valley and are back in India and are doing the same or similar job at a much lower remuneration's than in Silicon valley as now they have to compete with a lot more qualified and an ample young Indian workforce who are ready to work night and day and who have not seen the luxury of "clocking out" on bankers hours or are not used to a time and a half OT.
Even though US has lost only less than 1% of the manufacturing jobs to outsourcing, still, the jobs do go overseas and a lot of people lose their livelihood because of the outsourcing but can we just blame the "Asians" and not own up-to our own work ethics and our own really high "price point" of manufacturing due to Unions, overtime policies and local and federal tax ordinances. The big Corporations have to resort to outsourcing to be competitive with other MNC's to make profits in this Global economy. We also hear a lot about big corporations opening plants in emerging economies like India, China and Brazil etc lately. We see it on TV or read about it the press and we jump again and blame the 15% plus unemployment in Michigan on to these plants and the "Asians"! The truth is that we have lost the local end-consumer market shares of the US made products due to quality and pricing and we don't even have enough consumer population to go out and buy these products. We all know how much of population loss and outflow has happened in greater Detroit area alone.
Another hard fact is that we hear a lot about GM setting up a manufacturing plant in China or India only because that's where they are selling more (these cars dont come back to be sold in US) rather than trying to "offshore the neighborhood jobs" These emerging markets have the young, new products savvy, cash yielding population to buy these products these days. We need to change the mindset, change our skill sets and retrain our means and ways to earn the "Moolah" 'cos whether we like it not and whether we want to believe or not, the emerging economies do exist and are only going to rise in GDP, market share and power. We can't resist the global economic swing as the pendulum has already swung half way on to the other side!
What we need is to come out of denials and re-think our strategy to take on the World again. For example, take all the empty extra land around the Metro Detroit airport, even after the NWA/Delta hub expansion and think of a ancillary industries consortium where medium to heavy machinery flies in and gets fixed, repaired, retooled and fly out immediately. We can set up training schools around that area for tool and dye skills and so much more. There is enough hard working, skillful work force in Michigan to get together as a community and turn that Beautiful Great lakes region to one of the best in the Country once again. We took on the Hollywood project in Detroit area and is going well but I think the 40 cents on a Dollar cash-back to Hollywood fat-cats won't cut it for the hard working men and women of Michigan. We all know Granholm wasn't the smartest Governor around. She failed for me ever since she could not help save KMarts's headquarters in Troy. A few rich and well connected guys will get to those movie shoots, socialize with the stars and will push their kids in some odd small time acting roles and the real locals, who have dedicated their lifetime to Detroit will still get nothing! And if other states offer same to these studios they will abandon us and run. I get a little passionate when talking about Michigan! so getting back to outsourcing......
I am including an article I read online and posted on facebook last year which gives a little insight in the "Outsourcing Issue".
~Dr V
Truth about Outsourcing, informative article!!
by Vik Ahluwalia on Friday, September 19, 2009 , reposted as original written by Alfred Chuang, chief executive of a Silicon Valley software firm.
"Outsourcing, currently a great concern of both employees and federal and several state governments. Of late, at least three state governments are considering bills to restrict outsourcing of jobs related to government services. In addition, many big software companies are the targets of union-organizing drives.
"Outsourcing, currently a great concern of both employees and federal and several state governments. Of late, at least three state governments are considering bills to restrict outsourcing of jobs related to government services. In addition, many big software companies are the targets of union-organizing drives.
It’s important to point out that, although a large number of IT-related jobs are being outsourced to India and other places, it’s still a very small part—less than two percent of U.S. employment. Second, there are some natural limitations to outsourcing everything. There are many dangers of going abroad; for example, picking the right partner is tricky and getting along can be harder because of cultural and linguistic differences. Political stability, the protection of intellectual property, and the privacy of personal information make large-scale outsourcing dangerous. But most important, it should be remembered that it is the low-skill end of the software development jobs that are going, just like the low-skilled manufacturing jobs left the U.S. The high-skill end will remain in the U.S., and it behooves U.S. firms like TSS to enhance the training of its U.S.-based employees to do these high-skilled jobs. In addition, not sending jobs to places where it can be done more cheaply could well cost even more jobs in the long run. Using offshore workers helps companies remain competitive and focus on what they’re really good at. Outsourcing helps them maintain margins and create new jobs."
