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Arrogant programmers and economic climate  RSS feed

 
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Originally posted by Mark Herschberg:

Realistically, however, child labor isn't taking software jobs from the US. Neither is environmental constraints. In our industry, India isn't do anything we can't do ourselves, if we so choose.
--Mark


Realistically, our overall tax burden (including that on corporations) and cost structure incorporates all of the above; so, in fact, we _can't_ do what India is doing without losing what makes us a first-world country.
 
mister krabs
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Originally posted by Mark Herschberg:
Realistically, however, child labor isn't taking software jobs from the US. Neither is environmental constraints.

Actually they are. Because of these laws it drives up our cost structures which makes the cost of living higher here than in India and other third world nations.
 
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Originally posted by Rufus BugleWeed:
<quote>
Companies have access to a pool of well educated professionals who went to school on a government bill.
</quote>
This is new to me.
Are you stating that the average Indian college student does not have to pay a huge tuition bill?
Isn't that a lot like selling steel for less than the cost it takes to make it?


1) Yes.
2) Yes, it is exactly the same.
With offshoring, from my perspective, I think there is a huge disadvantage for the American tech workers right now. Where is the fairness in this competition? One thing that the government did do to ameliorate�the problem for many students who are leaving college now, and who probably are not going to find work, is to lower the interest rate to 2.82%, the lowest ever.
 
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In Germany studying is mostly free (I paid 150 Euros/semester and could use busses and subway for free in a quite a huge area around the city. I know people who stayed students for the cheap transportation ticket only. There are some private universities, but only 5% or less go there (its rising slowly, but more in business/economics than in engineering). I think in most european countries its more expensive to study, but still heavily subventionized.
When I've heard from american relatives about their after study debths, I think 50% of all european post-graduates would simply kill themselves.
Studying shouldn't be totally free, but IMHO there should be more subventions from state for non-army-students in USA. In a globalized world learning involves more risks than it used to be 10 or 20 years ago.
[ August 02, 2003: Message edited by: Axel Janssen ]
 
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Originally posted by Axel Janssen:
In Germany studying is mostly free (I paid 150 Euros/semester and could use busses and subway for free in a quite a huge area around the city. I know people who stayed students for the cheap transportation ticket only. There are some private universities, but only 5% or less go there (its rising slowly, but more in business/economics than in engineering). I think in most european countries its more expensive to study, but still heavily subventionized.
When I've heard from american relatives about their after study debths, I think 50% of all european post-graduates would simply kill themselves.
Studying shouldn't be totally free, but IMHO there should be more subventions from state for non-army-students in USA. In a globalized world learning involves more risks than it used to be 10 or 20 years ago.


I think that tuition at a public university should be affordable for a person working 20-30 hours a week at the minimum wage. I paid about $1000 a year tuition when I attended college with no other breaks. The deal in Germany sounds unsustainably generous to me.
I understand that books are extremely expensive in Germany, and that German Universities are not set up to offer much adult education. If this is true it would seem to reflect a mindset that learning is for the young. Or that the employer will tell you what to learn. Under a 'globalized' economy this is a very dangerous assumption. Both for the employee and for the society as a whole.
 
Axel Janssen
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Originally posted by Alfred Neumann:

The deal in Germany sounds unsustainably generous to me.


It is. If the students pay money, there is more pressure on the professors, assistents to offer better service.

Originally posted by Alfred Neumann:

I understand that books are extremely expensive in Germany,


Many workarounds in the last years, thanks to amazon and other strange holes in laws for book-market, I don't understand but use.

Originally posted by Alfred Neumann:

and that German Universities are not set up to offer much adult education. If this is true it would seem to reflect a mindset that learning is for the young. Or that the employer will tell you what to learn. Under a 'globalized' economy this is a very dangerous assumption. Both for the employee and for the society as a whole.


I agree with you. 1000$/year with free public transport should be o.k.. But when I remember right my relatives paid much more.
[ August 02, 2003: Message edited by: Axel Janssen ]
 
Al Newman
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Originally posted by Axel Janssen:

I agree with you. 1000$/year with free public transport should be o.k.. But when I remember right my relatives paid much more.
[ August 02, 2003: Message edited by: Axel Janssen ]


My university now charges $4500 a year tuition, not including living costs. Too much. And that is about as cheap as it gets except in Texas, North Carolina, and Florida. Maybe New York as well. Too much in my view.
Then there are private colleges, where yearly costs can be more than $30,000 a year! That figure includes living costs however!
 
Thomas Paul
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NY Colleges:
State Universities (some of which are excellent) - $4,350 per year for NY state residents.
Community Colleges - $2,500 per year for residents
I know a lot of people who go to community colleges for two years and then transfer to a big name university.
 
Al Newman
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Originally posted by Thomas Paul:
NY Colleges:
State Universities (some of which are excellent) - $4,350 per year for NY state residents.
Community Colleges - $2,500 per year for residents
I know a lot of people who go to community colleges for two years and then transfer to a big name university.



Thomas, do you happen to know what CCNY charges these days?
 
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Thanks for responding. It took me awhile to research some things, so am just now getting back on the three issues I raised.
1. What does belief in free markets mean and to what degree do you believe in free markets (how much government intervention is approvable)
Except for maybe some die-hard libertarians, I can't imagine anyone saying they don't want any government intervention. The government is needed for certain overhead and infrastructure, large impact decisions, and long term strategic economics.

The summary of your response:

In short, my belief in the free market means you shouldn't artifically prop up a venture, industry, or body if the economics won't support it.

After hearing much of your arguments focusing on the free market, it helped to hear your views on government and that you do see it playing a role in the market.
2. The simple business rules you state, can support what many believe, both at the time and in hindsight, to be objectionable business practices.
I gave the example of Al Dunlap�s work at Scott Paper and Sunbeam, both scenarios where firing led to remarkable increases in the stock price and that the simple rules you�ve stated before (worker costs are cut, costs go down, stock prices go up).
Your reply:
I don't know the specifics of what was going on at the companies which hired corporate turnaround expert Al Dunlap. I do know that he was hired to increase company value; in fact, he had a legal obligation to do so. He did that, i.e. he did his job. You can't fault him for that.
Again, I don't know all the details of the company's situation, but it looks like he did the right thing. The company's value went up. (It would be wrong only if it was a short term gain.)
I get the impression you think he did something wrong. He broke no laws. There is no moral obligation to employ people. What exactly did he do that was wrong? (Again, if the company's price fell significantly after he left because he short sold the future, then it was bad--although even then it could've been an honest mistake; but I don't think the price fell in these cases.)
In short, it is about increasing value.

Dunlap left Sunbeam in June of 1998, Sunbeam went bankrupt in early 2001 despite Dunlap�s efforts to conceal losses which resulted in him being charged a fine of $500,000 for cooking the books.
As for Scott Paper, the jury�s still out on that one, it merged with Kimberly Clark shortly after Dunlap had worked his magic there and it�s difficult to tell just how good a position it was in when Dunlap left it.
My point with this was to say that to merely see decisions in terms of decreased costs and increased stock price can be shortsighted and difficult to measure. Just because value is increased (at least according to the market) in the short run, doesn�t mean that value and wealth really have increased.
A good article addressing this issue better than I can convey it, suggests that managers ask �Why don't we ask what makes for a better society and not just what makes a successful company?� whenever making financial decisions, which I happen to agree with.
http://magazine.byu.edu/bym/1997/97spring/downsizing2.html
Regarding your arguments about social costs, I�ll try to tie in my responses below about whether a level playing field exists today when trying to get a job.
3. The playing field isn?t level
I know you?re a big believer in free markets, but the thing that bothers me about the outsourcing situation is not a free market situation and that the playing field isn?t level and hasn?t been level for years.

Your response:
It's a very level playing field. People in third world countries are simply willing to earn less and have a lower standard of living then people in the US. If you're willing to work for those wages and accept that standard of living, you'll get those jobs. If you're not, oh well. It's not an issue of fairness, it's an issue of you don't want to change your lifestyle. (As always in these cases, "you" is used for anyone in general.)

I completely disagree with this, I don�t think it�s a matter of willing to earn less at all that differentiates the salaries that we earn from the salaries of other countries, I think it�s a combination of quite a few things that are largely out of control of the average worker including the following items which I believe are not part of a free market arrangement and definitely alter the playing field when it comes to looking for work:
H1b- Government regulation where company can hire people from other countries, pay them less wages in some circumstances, have that resource committed to them throughout the 2 to 3 or even longer H1B process and then for some time beyond and in return the H1b visa holder gets to come to the US and potentially set up permanent residency. This is not the free market at work if it requires government legislation to have this happen and ends up impacting the average American wokrer�s ability to find a job.
L1 - High Tech Worker Visas Come Under Fire
Source - http://itmanagement.earthweb.com/erp/article.php/2242281
"U.S. Senator Dianne Feinstein (D.-Calif.) called the State Dept.'s L-1B visa for skilled IT workers a type of "stealth immigration" that is taking jobs from the skilled American technology workforce. The visa was created to make it possible for international companies with a presence in the U.S. to bring their employees from overseas. However, Feinstein says the program is being abused by software outsourcing companies, who are bringing IT workers from abroad and placing them at U.S. companies. According to the State Depart., it is not permissible to use L-1's for outsourcing, but thousands have nevertheless been used for that purpose. Foreign workers applying for the L-1B must have "specialized knowledge" to qualify for the visa."
This is not the free market in action.
Tariffs � Remarks by Ambassador Jon M. Huntsman Jr. Deputy United States Trade Representative February 2, 2003
Source: http://www.ustr.gov/speech-test/assistant/2003-02-05_Huntsman.PDF
�India�s tariffs are today, more than ten years after the beginning of
economic reform, the highest in the world, except for those of Pakistan, according to the
World Bank.�
Another article I found gave me this item:
"In 2001, India ranked 28th among the United States' export markets, behind such substantially smaller economies as Ireland and the Dominican Republic. U.S. high-technology companies have been interested in increasing their presence in the Indian economy, although many have expressed concerns about tariff and non-tariff barriers to entry."
Probably the most compelling example to me of why this playing field is not level, the country that is going to take most of our high-tech jobs has the second highest tariffs in the world. And were somehow supposed to just take this all in stride and try to do something about it on our own, that's just not fair.

OPIC
Saving this one for last, I thought I�d approach this with an analogy.
I taught several Java/Web classes for 2 and a half years at a middle-tier university. When I first got there, from the students stories probably 75% or more were actually get a job in IT using their degree. The last semester I taught, most recruiters had stopped coming to the campus, and very few students were getting jobs. Let�s say 10% were actually getting jobs.
Your response:
It's always been a gamble being in the right place at the right time. It was simply very easy for IT people during the tech boom so now it looks difficult in comparison.
I agree that there is a gamble and that the students who happened to attend in 1999 were fortunate that they were finishing up just in time to get jobs before they dried up in my city (Kansas City) which mainly occurred due to the layoffs experienced by Sprint.
Now, the thing that bothers me is that each set up students started their curriculum seeing the brochures telling about 90% placement rates or whatever rosy-colored statistics the school had at that time. But the two sets of students hat strikingly different experiences when I came time to graduate and get that new job.
I agree that it is a gamble, but should the full cost of this education be on these students? I mean $40,000 per student on average was the cost for these students to attend class for the full program.. and very,very few students got jobs for the $40,000 that they invested in the program. A proposal I thought might help these students and at least offset this gamble would be some sort of education insurance offered by the government so that if the students didn�t find jobs, at least they could be compensated for their efforts through some sort of insurance. I think this really would be a helpful and fair solution. I�m sure you�ll agree that this is not a free market proposal. My next question is, would this be something you approve of? And, if you don�t, then my next question is then why are corporations shielded from this risk in the international arena through OPIC which provides risk insurance in case their overseas efforts go sour.
Here�s an article indicating how the three companies listed below are asking for over $200 million from the United States government insurance claims.
OPIC Enron/GE/Bechtel
http://www.wizardsofmoney.org/wiz9/OPIC.html
Is this fair? That we offer this protecting to our companies which have plenty of power in their size, lobbying power etc. But the average student making good faith efforts to go to school is told �it�s a gamble� and �no one has a right to a job�. I don�t think it�s fair that corporations should have this power and the average worker doesn�t, it�s definitely not part of the free market, and with all the government intervention encouraging capital to leave our country to invest in foreign subsidiaries and the jobs created by them, this is yet another item that tilts the playing field.
Finally, you did mention that you were a fan of collective bargaining, I think that's actually becoming irrelevant, or at least circumvented in a lot of cases, as evidenced by this study below:
Impcat of US-China Trade Relations on Workers, Wages, and Employment
http://www.ustdrc.gov/research/china1.pdf

(which also includes the other social costs I was trying to allude to in the part 2 of this posting)
"While at one time the majority of production shifts into China may have been concentrated in relatively low-skill, low-wage jobs in light manufacturing� our media-tracking data suggest that an increasing percentage of the jobs leaving the U.S. are in higher-paying industries� it is these higher-end jobs that are most likely to be unionize dand therefore more likely to have a much larger wage and benefit package. Many of those who lost their jobs were high seniority, top-of-the-pay scale employees, who have a great deal invested in their jobs and in their communities�.
The employment effects of these production shifts go well beyond the individual workers whose jobse were lost. Each time another company shuts down operations and moves work to China, Mexico, or any other country, it has a ripple effect on the wages of every other worker in that industry, and that community, through loweringw age demands, restraining union organizing and bargaining power, reducing the tax base, and reducing or eliminating hundreds of jobs in the related contracting, transportation, wholesale trade, professional, and sevice-sector employement in companies and businesses.
In conclusion, our research suggests that the US and other countries have moved ahead with trade policies andd global economic integration based on faulty arguments and incomplete information. The findings from this pilot study are a first step toward better informing the US-China trade policy process. The findings also point to the critical need for government-mandated corporate reporting on production, trade, and investment flows in and out of the US and for further research on the impact of these trade and investment flows on workers , unions, families, and communities in the US and around the globe. [/B]
It just plain isn't a free market that we're dealing with here, and is more than meets the eye as far as indirect and social costs of outsourcing to other countries. I don't know what the solution is, but I think a first step is realizintg that there is a problem that is bigger than the average worker should have to deal with on his won without support from companies and our government. I was glad that in going through these articles it does seem that there is at least some governmental awareness, and you'd be happy to know that some of the suggestions revolved around actually making the market a more level playing field by freeing up commerce, reducing tariffs and other ideas. Still no matter what happens, I think something needs to be done by our government.
Any thoughts on this?
[ August 03, 2003: Message edited by: Nathan Thurm ]
[ August 04, 2003: Message edited by: Nathan Thurm ]
[ August 04, 2003: Message edited by: Nathan Thurm ]
 
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Milton Friedman, Nobel Prize winner in Economics:

"The majority of H-1B immigrants do manage by hook or crook to get permanent residence and become citizens, so as a factual matter they are not a 'farm team' of indefinitely temporary workers. Yet there is no doubt that the program is a benefit to their employers, enabling them to get workers at a lower wage and to that extent is a subsidy."

 
Thomas Paul
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Originally posted by Alfred Neumann:
Thomas, do you happen to know what CCNY charges these days?


$2,000 per semester for residents.
 
Al Newman
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I taught several Java/Web classes for 2 and a half years at a middle-tier university. When I first got there, from the students stories probably 75% or more were actually get a job in IT using their degree. The last semester I taught, most recruiters had stopped coming to the campus, and very few students were getting jobs. Let�s say 10% were actually getting jobs.


Based upon my experience in a simlar situation I'd be surprised if that many were getting jobs. The exceptions might be the kids with family connections which can be used or the kids who have been working internships with organizations still financially strong enough to employ them after graduation.

I agree that there is a gamble and that the students who happened to attend in 1999 were fortunate that they were finishing up just in time to get jobs before they dried up in my city (Kansas City) which mainly occurred due to the layoffs experienced by Sprint.
Now, the thing that bothers me is that each set up students started their curriculum seeing the brochures telling about 90% placement rates or whatever rosy-colored statistics the school had at that time. But the two sets of students hat strikingly different experiences when I came time to graduate and get that new job.


What university do you teach at? Missouri-KC? I did a contract gig at Sprint in the early 90's. KC is a great place to live (I had a great apartment two blocks west of the Plaza) but the job scene is bad news. One big employer (Sprint) and not much else. Sprint was a petty nasty place and not well-managed.

I agree that it is a gamble, but should the full cost of this education be on these students? I mean $40,000 per student on average was the cost for these students to attend class for the full program.. and very,very few students got jobs for the $40,000 that they invested in the program. A proposal I thought might help these students and at least offset this gamble would be some sort of education insurance offered by the government so that if the students didn�t find jobs, at least they could be compensated for their efforts through some sort of insurance. I think this really would be a helpful and fair solution. I�m sure you�ll agree that this is not a free market proposal. My next question is, would this be something you approve of? And, if you don�t, then my next question is then why are corporations shielded from this risk in the international arena through OPIC which provides risk insurance in case their overseas efforts go sour.


What angered me when I faced this situation was the attitude of the state. I could not pay back the student loan because I was barely supporting myself and my mother by pushing a broom. So they put some of the lousiest b-tards of collectors on my case I have ever seen. Even once I began a better job they hounded me. I spent a year living in a garrett (literally) to pay them off even when I began making a decent wage. When I made my final payment the case officer told me I'd been an 'exemplary case'. Well no caca, bud! I lived on baked beans for 3 years to pay you off!
Between the treatment of my student loan and having financial aid cut off during school after an 'audit', my memories of the state functionaries I dealt with are not fond ones. I don't dwell on it, but the day I paid off my school loan was one of the best days of my life!
I hope they treated your students better than that. But I doubt it.
That said, my education was still a great investment, paying off at a rate of at least 100% a year for many years. Your students will land jobs eventually and go on to years of better earnings than they would have had otherwise. They have the degree which qualifies them for good jobs outside of IT as well. Even the 'lucky' ones who graduated in 1999 are probably not much better off. Many of them were laid off no doubt.
[ August 04, 2003: Message edited by: Alfred Neumann ]
 
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Rufus,
To confirm the cost of education in India, let me list the cost of education in India, with my case as an example - I hold BSc degree in Mathematics.
First 10 years at school, is free, except for a fee of Rs 11.50 or so (about $0.25) per year, and similar contributions towards various clubs (science clubs, NSS-Nature Service Society, NCC-National Cadet Core) etc. Last five years at school, I had paid a $15 per year year for private tution for Maths and Languages for a private trainer, outside school hours and on weekends.
Fees were slightly higher at University for next five years - about $6 per year tution fee, with which, University provides us ambient class rooms, expert teachers, good collection of books and decent sport and arts facilities. These five years would be a lot more expensive if one is to follow the BE/BTech branch of studies, where fees could go up to $1000 per year or even more, in some private colleges.
Through out these 15 years, I was entirely supported by my parents, living with them, and spending their money. It could go on for another good few years if one is to continue his/her education, but for me, that was the end of it, as I landed a job soon after that.
The economics behind this low fees and still providing 'adequate' facilities could be hard to understand, but it works quite well.
[ August 04, 2003: Message edited by: Ashok Krishnan ]
 
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Free market at work:
caveat: Things aren't this simple in the real world.
1. A massive part of the U.S. middle class finds itself unemployed thanks to being unable to compete cost-wise on a global market.
2. As time goes by, they must sell off their assets to keep themselves in necessities. A glut of houses goes on the market as they downsize to cheaper accomodations, forcing housing prices down. The mortage banking induistry takes a hit as older mortgages are paid off and newer ones are for smaller amounts. Automobile prices drop because no one can afford new cars.
3. Lacking a resolution, people start buying the cheapest available groceries (remember the stories about old people buying pet food?)
OK, stop right there. The next logical step would be for farmers and food distribution companies to lower prices as they compete for the reduced demand (of course, when you're talking food, you can only reduce demand so far!) and the economy rolls down to a lower level. But in the U.S., farm prices are held unnaturally high for staples like milk and many grains and so, absent the deletion of those props, food simply becomes unaffordable.
Which is the kind of thing that leads to riots and revolutions.
Once again, the real problem isn't that there's a differential in almost every cost of living over there. I live in a state whose salaries are on average 7% less than places farther North, but that hasn't made more than a dent on the Northern economies. However, when competition with regions where the prices and costs are a tithe of ours, neither the more expensive Northern states nor my own can even begin to compete.
Incidentally, one of the benefits of all that cash floating in is that cities like Bangalore are beginning to build world-class medical facilities, which are also incredibly inexpensive to use. People have started coming in from surrounding regions for discount heart surgery, plastic surgery, even low-cost dental fillings. Nothing succeeds like success, as the saying goes.

About Chainsaw Al: Considering the numbers I've seen, did the companies he butchered for really realize that much in savings? Or did they just shift the money that would have been paid to workers who might better have been moved to more productive positions (= new jobs "invented"?) to Dunlap's own pockets? You can employ a lot of people on $100 million.
 
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Ashok,
Interesting point about the cost of education in India.

Cheap ain't necessarily bad.

posted by Tim Holloway:
Incidentally, one of the benefits of all that cash floating in is that cities like Bangalore are beginning to build world-class medical facilities, which are also incredibly inexpensive to use. People have started coming in from surrounding regions for discount heart surgery, plastic surgery, even low-cost dental fillings. Nothing succeeds like success, as the saying goes.


If this pattern is repeated across the sub-continent that would be really an achievement .
Castro/Cuba had similar policies and had flagship hospitals and schools.
Cuba has some really well-educated teachers who come to the UK to fill teacher posts and are quite highly thought of by even the pupils for their dedication and love of the job.Most want to return after their stint.
(IMH experience).
Is the point that you really don't need a super infra-structure to do remarkable things ? At the other end of the scale, you end up providing electricity and fast access to a few and disregard the rest.
More grounds for riots and revolutions.
It would be a real achievement if they could repeat the pattern here.The Medical service is so over-stretched and lowly-paid , they've started out-sourcing cases to Spain, Eastern Europe, India.
Businesses can't take the gamble and leave it too late, so they are starting early on rather than later.

regards
[ August 04, 2003: Message edited by: HS Thomas ]
 
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Originally posted by Mike Dahmus:

Realistically, our overall tax burden (including that on corporations) and cost structure incorporates all of the above; so, in fact, we _can't_ do what India is doing without losing what makes us a first-world country.


Well, duh. :-)
In the US we have good roads, free public education, safe streets, public transportation systems, opportunities for personal growth, public libraries, FAA (allowing safe, low cost air travel), telephone service available (even if not paid for) in every house, social services, clean water in every town, etc. I'm guessing India doesn't have the same support for it's citizens.
Did you think this was free?!?! It costs money! If you don't like it, tell the politicans to pull the plug on these social services. We can live just like any other country, and even save money to boot!

Originally posted by Thomas Paul:
Actually they are. Because of these laws it drives up our cost structures which makes the cost of living higher here than in India and other third world nations.


In theory, I'm sure it could. The reality is, it's not having an effect. We've heard of lots of programmers here complaining about how "Indians (to select a particalr country) are stealing our jobs." I disagree, but I can see growth in the Indian IT market and stagnation in the US market and am open to the possibility that there is causality. I've yet to see any evidence of a growing 14yo IT labor market in India.
I happen to think the US economy is better off having child labor laws, effectively causing workers to get more education before entering the work force.

Originally posted by Axel Janssen:

Studying shouldn't be totally free, but IMHO there should be more subventions from state for non-army-students in USA. In a globalized world learning involves more risks than it used to be 10 or 20 years ago.


Hear hear! Can you imagine what would happen if, say, every state school was free?!?! Everyone would go! Let's assume for a moment that the logistics would work, and these free schools could handle the thousands of new students on campus. Who would be a cashier? Who would be a janitor? Who would be a barber? The lower end of the labor pool would be in serious trouble. Why hire a janitor with a high diploma when you can find one with a college degree. Then a college degree becomes a requirement for sweeping floors!
--Mark
 
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I think not everyone who has a free pass ends up going to college. I'm sure we know people who have plenty of money to go to college and choose not to. Some possible reasons:
- they'd rather do creative work, such as music, painting, etc
- they're busy running their own business
- they are not prepared, academically or otherwise
Because education is free it shouldn't mean everyone is automatically qualified to take advantage of the privilege. Usually, in countries where college is free there is a gruesome entrance exam. Not just the equivalent to math and English, but also history, literature, science, foreign language and a topic that is specific to the chosen field of study. A minor percent passes the exams for the most demanding or sought after degress. The rest end up with the most common degrees. While these students might end up working at GAP, they do benefit society with the level of education that they acquired. In my opinion, there is a value beyond employability to be obtained with education at levels above high-school. But this is an opinion. I don't see anything wrong with barbers having a college education if they so choose. To me, we should have a choice, and if one wants to prepare and pursue a higher education, there should be means available to everyone. Having technical schools is a good idea for people who want to be specialized in a field but don't care about the extra academic work. These should also be at reach to anyone.
BTW, there is a trend in the US where a college degree is becoming a norm for positions that in the recent past only required a high school diploma.
 
Mark Herschberg
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Originally posted by Nathan Thurm:

I gave the example of Al Dunlap?s work at Scott Paper and Sunbeam, both scenarios where firing led to remarkable increases in the stock price and that the simple rules you?ve stated before (worker costs are cut, costs go down, stock prices go up).
Your reply:
I don't know the specifics of what was going on at the companies which hired corporate turnaround expert Al Dunlap. I do know that he was hired to increase company value; in fact, he had a legal obligation to do so. He did that, i.e. he did his job. You can't fault him for that.
Again, I don't know all the details of the company's situation, but it looks like he did the right thing. The company's value went up. (It would be wrong only if it was a short term gain.)
I get the impression you think he did something wrong. He broke no laws. There is no moral obligation to employ people. What exactly did he do that was wrong? (Again, if the company's price fell significantly after he left because he short sold the future, then it was bad--although even then it could've been an honest mistake; but I don't think the price fell in these cases.)
In short, it is about increasing value.

Dunlap left Sunbeam in June of 1998, Sunbeam went bankrupt in early 2001 despite Dunlap?s efforts to conceal losses which resulted in him being charged a fine of $500,000 for cooking the books.
As for Scott Paper, the jury?s still out on that one, it merged with Kimberly Clark shortly after Dunlap had worked his magic there and it?s difficult to tell just how good a position it was in when Dunlap left it.
My point with this was to say that to merely see decisions in terms of decreased costs and increased stock price can be shortsighted and difficult to measure. Just because value is increased (at least according to the market) in the short run, doesn?t mean that value and wealth really have increased.


Forgive me if I repeat myself, but [i]duh[i]!
Did you not read my reply? Specifically the statements: "It would be wrong only if it was a short term gain," "I don't know all the details of the company's situation...he broke no laws," and "Again, if the company's price fell significantly after he left because he short sold the future, then it was bad."
Yes, making short sighted decisions is bad. Illegal accounting practices is not only bad, it's a crime. COnsider the legal system; it works great, but not if people are prejudiced, or corrupt. It's not a perfect system, but it works pretty well. The same is true with the free market. If we play by the rules, it works well. Now we know not everyone plays by the rules, but it's the best system we've got.

Originally posted by Nathan Thurm:

I completely disagree with this, I don?t think it?s a matter of willing to earn less at all that differentiates the salaries that we earn from the salaries of other countries, I think it?s a combination of quite a few things that are largely out of control of the average worker including the following items which I believe are not part of a free market arrangement and definitely alter the playing field when it comes to looking for work:
H1b- Government regulation where company can hire people from other countries, pay them less wages in some circumstances, have that resource committed to them throughout the 2 to 3 or even longer H1B process and then for some time beyond and in return the H1b visa holder gets to come to the US and potentially set up permanent residency. This is not the free market at work if it requires government legislation to have this happen and ends up impacting the average American wokrer?s ability to find a job.
L1 - High Tech Worker Visas Come Under Fire
Source - http://itmanagement.earthweb.com/erp/article.php/2242281
"U.S. Senator Dianne Feinstein (D.-Calif.) called the State Dept.'s L-1B visa for skilled IT workers a type of "stealth immigration" that is taking jobs from the skilled American technology workforce. The visa was created to make it possible for international companies with a presence in the U.S. to bring their employees from overseas. However, Feinstein says the program is being abused by software outsourcing companies, who are bringing IT workers from abroad and placing them at U.S. companies. According to the State Depart., it is not permissible to use L-1's for outsourcing, but thousands have nevertheless been used for that purpose. Foreign workers applying for the L-1B must have "specialized knowledge" to qualify for the visa."


If everyone software engineer in this country refused to write a line of code until we got paid $100k a year or more, they couldn't import workers fast enough. If the auto union decided to require at least X dollars an hour, they go on strike an either get the raise or give in. If every McDonald's franchise manager refused to work for less then $100k a year, they would be fired and replaced. See the pattern?
The H1B's who come here are willing to earn less. Plain and simple.
Let's consider the point about the L-1s. OH MY GOD< IT"S BEING ABUSED!!! Again, that's not the fault of the free market, that's the fault of people doing illegal things. We need to enforce the laws. Of course, if we believe Milton Freedman's statement, then they become "locals" and if they are willing to work for less and hence, the fact remains that you are undercut by people willing to work for less.

Originally posted by Nathan Thurm:

?India?s tariffs are today, more than ten years after the beginning of
economic reform, the highest in the world, except for those of Pakistan, according to the
World Bank.?
...
Probably the most compelling example to me of why this playing field is not level, the country that is going to take most of our high-tech jobs has the second highest tariffs in the world. And were somehow supposed to just take this all in stride and try to do something about it on our own, that's just not fair.



Yes we are. They are simply proping up an inefficent industry.

Originally posted by Nathan Thurm:

Now, the thing that bothers me is that each set up students started their curriculum seeing the brochures telling about 90% placement rates or whatever rosy-colored statistics the school had at that time. But the two sets of students hat strikingly different experiences when I came time to graduate and get that new job.
I agree that it is a gamble, but should the full cost of this education be on these students? I mean $40,000 per student on average was the cost for these students to attend class for the full program.. and very,very few students got jobs for the $40,000 that they invested in the program. A proposal I thought might help these students and at least offset this gamble would be some sort of education insurance offered by the government so that if the students didn?t find jobs, at least they could be compensated for their efforts through some sort of insurance. I think this really would be a helpful and fair solution. I?m sure you?ll agree that this is not a free market proposal. My next question is, would this be something you approve of? And, if you don?t, then my next question is then why are corporations shielded from this risk in the international arena through OPIC which provides risk insurance in case their overseas efforts go sour.


If they actually expected future placement rates to be totally depending on the school then I have zero sympathy for them. We were in the best US economy since WWII, and if that economy failed ("oh, but we must've been asleep when Mr. Greenspan said the market was overheated") those rates would come down.
I think education insurance is a great idea for some people. If they want it, they can go buy it. I'm certain there are companies willing to sell it to you. It's effectively unemployment insurance, and that can be purchased privately.
OPIC is not strictly economic, or at least, not economic over a short span. Part of the motivation for OPIC is political. From the front page, "OPIC...supports U.S. foreign policy. By expanding economic development in host countries, OPIC-supported projects can encourage political stability, free market reforms and U.S. best practices." If successful, the long term market implications are huge!

Originally posted by Nathan Thurm:

Is this fair? That we offer this protecting to our companies which have plenty of power in their size, lobbying power etc. But the average student making good faith efforts to go to school is told ?it?s a gamble? and ?no one has a right to a job?. I don?t think it?s fair that corporations should have this power and the average worker doesn?t, it?s definitely not part of the free market, and with all the government intervention encouraging capital to leave our country to invest in foreign subsidiaries and the jobs created by them, this is yet another item that tilts the playing field.


It most certainly is. I've got news for you, the US isn't about equality. We have certain personal liberty protections which are applied equally to all. That's about all you get. Think Bush will return your calls? Think he'll return the calls of the CEO of Bechtel? Of course. Is that fair? It's not a matter of fairness, it's a matter of self-interest. Read the Federalist Papers. Our government is set up based on the premise of conflicting self interest. We offer more protection to those comapnies because they have more money. In a sense, they "earned it." Bought it would be a better description. That's the free market. Those with more money can do more.
Remember that one of the protections you get is the right to vote. If you think the government goes too far, then you can vote in a new one. In theory. It's not perfect, in fact, it's very imperfect, "democracy is the worst form of government except for the alternative." (Winston Churchill)

Originally posted by Nathan Thurm:

Impcat of US-China Trade Relations on Workers, Wages, and Employment
...


I think Ross Perot said it best, "You're going to hear a giant sucking sound." Which is why our enconomy went to hell in the 90's just after we passed NAFTA. (Right, my memory's getting fuzzy, wasn't the 1990s a time when US jobs fled our shores and we faced severe unemployment?) But to be fair, Ross didn't originate the idea, the auto industry warned us of this when the Japanese imports came in the early 80's. That's why in the 1980s the US economy shrunk and no one paid attention to US markets. (Again, correct me if I'm wrong, I was much younger in the 80s and just may be misremembering.)
In short,
chicken little has been screaming for decades about how the US economy is doomed. One day we will be. Every empire has eventually fallen. Maybe we're even at the beginning of the end. But protectionist policies will, at best, just keep us on life support longer, it will not save us. Every industry/company that has taken that road has failed miserably.

--Mark
[ August 04, 2003: Message edited by: Mark Herschberg ]
 
HS Thomas
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3. Lacking a resolution, people start buying the cheapest available groceries (remember the stories about old people buying pet food?)
OK, stop right there. The next logical step would be for farmers and food distribution companies to lower prices as they compete for the reduced demand (of course, when you're talking food, you can only reduce demand so far!) and the economy rolls down to a lower level. But in the U.S., farm prices are held unnaturally high for staples like milk and many grains and so, absent the deletion of those props, food simply becomes unaffordable.


Well, I heard recently that Canada are on the look-out for immigrant....(wait for it).. farmers. Since this was on the economic times.india I presume that they are being sourced from the green fields of the Punjab. One of the more affluent states. Strangely enough, you wouldn't find many IT shops there , the majority of their college graduates prefering to enter trade as in shops or farming.
As in Europe, the majority of illegal immigrants who do farming tasks on the cheap are sourced from India,Pakistan, Eastern Europe and there is a strange pecking order amongst them. i.e. they all look down on each other even though they do the same job -strawberry picking.
All helps keep food prices low. Needless to say their children would aspire to be doctors , accountants, programmers ..
regards
 
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The US economy is strong, but stupid.
We spend most of our resources and land raising cattle to slaughter, so we can plop a piece of meat on mid-westerners plates. We push animal products like they are drugs.
A piece of toxic (chemically grown and treated, and just plain unhealthy) meat is more than organic produce.
It takes about 1000 times more resources to raise an acre of land for cattle, to grow an acre of real food (fruits / vegetables). The ratio is amazing... go look up the details.
The US is not smart. It is a country driven by vanity and capitalism, and, I think it will eventually get a wake up call... probably when we run out of resources and destroy the every countries land, for good.
As far as IT goes, I'd try to hire the smartest guy/gal for the buck, weighing in personality, drive, and yes, vibe.
Companies who blindly outsource to other countries are at the risk of their HR staffs ignorance.
oh yeah, legal drugs are destroying the US too ! Cheers !
 
HS Thomas
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In short, chicken litten has been screaming for decades about how the US economy is doomed. One day we will be. Every empire has eventually fallen. Maybe we're even at the beginning of the end. But protectionist policies will, at best, just keep us on life support longer, it will not save us. Every industry/company that has taken that road has failed miserably.


Hear! Hear !
Adapt or die.
I still have visions of food being distributed down the net. And everything else for that matter. Food by wire straight from your not so local Food Bank.
regards
 
Tim Holloway
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I suppose the one thing that really bothers me is that there are so many people out there who say:


If those whiny US programmers out there weren't demanding $100K a year, they wouldn't be having problems finding jobs. If they want jobs, let them work for the same wages as people in India (or wherever).


If that were possible, I wouldn't be making all this noise. I didn't get into this field with an eye on salaries - they were a pleasant bit of good fortune. However, in the U.S. we have a minimum wage law and many Indian IT salaries are below that level.
Even if you repeal the minimum wage - when food and housing costs 10x as much over here, how do you code effectively when you're literally starving to death? I ran across a website that claimed that their calculations indicated that the typical Wal-Mart employee (who is paid at least minimum wage) can't actually survive even on Wal-Mart "everyday values". And while I tend to view such studies with suspicion, their outlay on groceries was less than mine and I've been fairly tight lately.
One controversy that is harder to answer is whether or not "India" is "stealing" American (British, Australian, German, etc.) jobs. Sometimes there is a definite answer. Microsoft did announce 800 support jobs being exported last month. Boeing sent over 250. Convergys shuts down U.S. tech support and announces expansion in their Indian centers. Mostly these are fairly small numbers.
More telling, though less directly-connected are the relative hiring levels. In the month of July, I clocked somewhere around 10-12K new IT and BPO jobs created in India just from the "big name" outfits. In that same period, only Microsoft announced any new mass creations of US jobs - roughly 2500 of 5000 new positions they expected to open up world-wide. India is beginning to develop some internal IT consumption, but it's very low compared to US businesses. Much of what they're building up is for offshoring.
Am I really in favor of attempting to control the free market? Not really. However if I intended to run a wire between two electrical components whose electrial potential difference was over 100,000 volts, I would certainly consider putting some sort of resistor in the circuit to limit current. Not to mention a fuse. Doing otherwise would be risking the possibility of blowing out both sides of the circuit.
 
Mark Herschberg
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Originally posted by Tim Holloway:

If that were possible, I wouldn't be making all this noise. I didn't get into this field with an eye on salaries - they were a pleasant bit of good fortune. However, in the U.S. we have a minimum wage law and many Indian IT salaries are below that level.
Even if you repeal the minimum wage - when food and housing costs 10x as much over here, how do you code effectively when you're literally starving to death?


Well, the two options as I see them are either:
1) support protectionist economic policy (which hurts us in the long run)
2) Reduce the standard of living so you can live on "competitive" salaries. I don't even know how a government would realistically lower a standard of living.
--Mark
 
Ashok Mash
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Originally posted by HS Thomas:

As in Europe, the majority of illegal immigrants who do farming tasks on the cheap are sourced from India,Pakistan, Eastern Europe and there is a strange pecking order amongst them. i.e. they all look down on each other even though they do the same job -strawberry picking.


Living in Europe for last 4 years, but never came across an illegal Indian immigrant, or neither a legal or illegal Indian immigrant in here working in farms. :roll:
 
HS Thomas
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Well , it's a pretty well-known fact if you :
1: visit farms in the dead of night
2: read newspapers or watch news on TV
3: work in Customs , where lorry/van-loads of these unfortunates
are discovered regularly
The US has a similar problem with illegal workers from Mexico, mainly.
A resource tapped by struggling farmers.
I don't think it's a problem that's addressed too directly.If they are legalised they would be entitled to basic benefits and the cost has to be picked up by the government. Much easier to let things drift. Come strawberry-picking season a few blind eyes are turned.
Between seasons there's a mass round-up and deportation.
That way , they keep the farming on life-support and keep the die-hard nationalists happy and the government doesn't have to dig deep to fork up.
Occasionally you find families with children amongst these migrants.
I hope someone in the US/Europe endorses what I am saying.
Stop traffiking
or if you want the credibility of a national newspaper for the same article:
People traffiking
Italy: Immigrants anxiously await outcome
Ashok, you've lived 4 years in Europe and never heard of this ?
A "microcosm" of a free market!

regards
[ August 05, 2003: Message edited by: HS Thomas ]
 
Mike Dahmus
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Originally posted by Mark Herschberg:

In the US we have good roads, free public education, safe streets, public transportation systems, opportunities for personal growth, public libraries, FAA (allowing safe, low cost air travel), telephone service available (even if not paid for) in every house, social services, clean water in every town, etc. I'm guessing India doesn't have the same support for it's citizens.
Did you think this was free?!?! It costs money! If you don't like it, tell the politicans to pull the plug on these social services. We can live just like any other country, and even save money to boot!
--Mark


It must save you a lot of time to not bother reading the points of those with whom you argue.
The point is that the "race to the bottom" has begun; and to claim that we're competing "on a level playing field" only makes sense if you enjoy the least-common-denominator approach to economic development.
God lord, you're a smug git.
 
Mark Herschberg
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Originally posted by Mike Dahmus:

The point is that the "race to the bottom" has begun; and to claim that we're competing "on a level playing field" only makes sense if you enjoy the least-common-denominator approach to economic development.


Race to the bottom?!?! It's all in your perspective. It's a race for economic balance. Since most people are below average, they will gain; sounds good to me. People in Western nations will lose high rates of growth, that's it. It is extremely unlikely that their standard of living will significantly decline.
On a level playing field, when you concentrate all the water in one location of the field, it will eventually spread out equally over the whole field.
--Mark
 
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Originally posted by Mark Herschberg:

Race to the bottom?!?! It's all in your perspective. It's a race for economic balance. Since most people are below average, they will gain; sounds good to me. People in Western nations will lose high rates of growth, that's it. It is extremely unlikely that their standard of living will significantly decline.
On a level playing field, when you concentrate all the water in one location of the field, it will eventually spread out equally over the whole field.
--Mark


I would like to pose this hypothetical situation to Mark: Put yourself in the situation of a newbie to the field say less that 2 years experience. Can you explain how you would approach this offshoring developments, what would you do to ensure your viability in this field. Please explain and educate us
 
Nathan Thurm
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Response to Mark's earlier remarks:
First argument: There are other items to consider than stock price and ROI
Your comment
Forgive me if I repeat myself, but duh!
Did you not read my reply? Specifically the statements: "It would be wrong only if it was a short term gain," "I don't know all the details of the company's situation...he broke no laws," and "Again, if the company's price fell significantly after he left because he short sold the future, then it was bad."
Yes, making short sighted decisions is bad. Illegal accounting practices is not only bad, it's a crime. COnsider the legal system; it works great, but not if people are prejudiced, or corrupt. It's not a perfect system, but it works pretty well. The same is true with the free market. If we play by the rules, it works well. Now we know not everyone plays by the rules, but it's the best system we've got.


Look. I did read what you said,alright. In fact I gave you a pass because I wanted to stick to the main argument at hand. But if you want to get into some of your comments I'll be happy to. You consider Dunlap a "corporate takeover expert". Current, successful corporate turnaround experts have "contempt" for Dunlap even claiming "corporate takeover expert" is a misnomer in his case.
http://www.cfo.com/article/1,5309,6370%7C%7CS%7C1%7C261,00.html
There are many articles like that, but I guess they don't know what they're talking about.
You said "He broke no laws". Yet somehow, when I indicate that he paid a $500,000 fine for committing fraud (it wasn't the first time either) , I end up getting a lecture on the legal system and how people go to jail when they commit crimes and how it's not the best system but it's all we've got. Then you yourself say you don't know the whole situation, but that doesn't stop you from also make strong statements like the above, that you can't back up and turn out to be wrong.. and I'm the one who's losing this argument? What kind of argumentative style is that? Make really strong decisive comments.. then say, but I don't know everything about this so if I'm criticized I can ask you if you actually read the disclaimer? I've never seen that before. But, all this is completely besides my point which is the following.
Many times on this site, the prospect of outsourcing has come up and you always give the arguments along the lines of lower labor costs mean lower prices for the consumer, higher stock price and greater value for the company. You have consistently approved the outsourcing action with an inclusion of a quick little commentary on the nuts and bolts of the free market for the edification of our forum.
What I was giving in the example was that these are two similar situations (downsizing at Scott and Sunbeam) where your very same criteria for defending/approving of outsourcing could be applied. Hindsight tells us that the Scott downsizing was probably "good" and the Sunbeam downsizing was "bad" or "wrong". But unless we're clairvoyant that's not going to help us at all at the time we make that decision. At the time we make the decision what we need, obviously, is some sort of model, some set of criteria upon which to base that decision. Since, as I just showed, using solely the set of criteria you continually suggest (and yeah I know it's not a full statistical sample, these two companies, it's just an example for discussion, so please, please don't get into the Statisics 101 lecture, I know it's coming, though if you do look at the article I linked to above the success rates on downsizing are actually very mixed) maybe we can learn something from what happened with these two companies, and realize that these criteria that you keep suggesting probably aren't enough for us to make a decision like that. Maybe including other factors in our criteria/model when approving or disapproving of outsourcing would result in better decisions.
Maybe, as the Chicken Little report suggests, the costs mentioned below should be taken into consideration too when evaluating overall whether a particular outsourcing initiative is "good" or "bad". Here it is again since you didn't comment on it the first time.
"Each time another company shuts down operations and moves work to China, Mexico, or any other country, it has a ripple effect on the wages of every other worker in that industry, and that community, through lowering wage demands, restraining union organizing and bargaining power, reducing the tax base, and reducing or eliminating hundreds of jobs in the related contracting, transportation, wholesale trade, professional, and sevice-sector employement in companies and businesses."
I think these are pretty compelling arguments. Not sure what you specifically think, since you dodged the question the first time and went into your Chicken Little rant. But what I think,is that when outsourcing is discussed not only ROI and Stock value should be considered but also other costs, indirect and direct (which you have dismissed and discounted everytime anyone brings them up on this site). This seems like just plain common sense to me.
Second argument: The playing field is not level.
I'm trying to establish common ground here, at least an agreement that there is a problem and that that problem is the playing field is not level. That government intervention makes it more difficult for us to compete and that is not fair to the average worker. And that after realizing that there is a problem, solutions could then be considered. But I apparently failed in the attempt.
I brought up the following government interventions:
H1b - (which even free market advocate Milton Friedman says is a subsidy),
L1 - (with legal or illegal use),
Tariffs - (India has the second highest in the land, despite the fact that they're "propping up an inefficient industry") and
OPIC.
Another one that caught my eye recently that I hadn't included before was how China ties there yuan to the value of the dollar so that their exchange rates can't vary against ours. Which, while I know it results in cheaper products for us, also makes it more difficult to compete for jobs since our costs of living are so disparate and are going to continue to be so.
All these make for a slanted playing field in my book, making it tougher for the average American worker and more specifically for this forum, for the high tech worker to get a job based on his skills and their value in a reasonably fair marketplace, rather than how little they're willing to accept in a paycheck.
But you're response is, No, the playing field is level. You say this, that it's merely the difference in what we're willing to work for and what people and other countries are willing to work for. Never mind that these differences are more symptoms of different costs of living and other underlying factors (including government intervention) that contribute to this disparity. Never mind that we could dig deeper on this, better to give a quick, glib answer than actually apply some thought to this.
On top of that,according to you, we shouldn't expect the government to do anything about it (unless the unemployment rates get too high, yes I read everything that you wrote). But we shouldn't expect the government to do anything right now aside from tax cuts. We should just try to reinvent ourselves, sharpen our skillsets, try to make ourselves irreplaceable through some special talents, even while jobs are starting to be shipped en masse all over the world.
Which leads me to another thing,does it really have to be a situation where the sky is going to completely fall before anything is done? An all or nothing situation? I mean, even in the worst case, life will go on for us, but it will become more of a matter of survival rather than trying to thrive for a lot of people if we really start hemorrhaging jobs. And shouldn't that compel us to try to actually address problems and try to come up with some sort of solution that actually is to our advantage, something that can help keep our society stable and even profitable. You would think so. But evidently, the best move is no move no matter what's going on at this point.
I also do get a kick out of your spiels on the 80's and 90's and whatever doomsday prophecies there are, repeated over and over on this board mocking anyone's concern about the current situation. And then your usual cya caveat at the end of each basically indicating that if you're wrong well governments come and go and it was going to happen anyway and well so what. Nice. Especially from the moderator of the forum.
Your next comment
I think Ross Perot said it best, "You're going to hear a giant sucking sound." Which is why our economy went to hell in the 90's just after we passed NAFTA.
No, it didn't did it. But can we look back at what actually happened? The Internet Boom leading up to Y2K? Do you think that has anything to do with the economic expansion we went through up to early 2001? Gee, I think so. Makes perfect sense to me. And now what's happening now that that went bust? California, our largest economy, is in a mess to the extent that they're actually moving to recall their governor. How about this, We've lost 2.5 million people already over the last couple years, with most of them not coming back either. http://money.cnn.com/2003/07/22/news/economy/jobless_offshore/index.htmDo you think we'll lose more? Telemarketing employs 6.5 million people in the U.S., estimates are that 2 million will be laid off due to the no-call list. Think that will affect things?
And,hey, what about this news, Job cut announcements up 43%. Another sign that the longest job-market slump since World War II continues.
http://money.cnn.com/2003/08/05/news/economy/layoffs/index.htm
Yeah, that tax cut is still creating jobs. Another thing, analysts keep missing their projections. Last month they were surprised that unemployement went up to 6.4% rather than 6.1%. This month, they projected gains of 10000 to 20000 jobs and the actual job losses continued for the sixth straight month with a net loss for the month of 44000. What's next, especially in light of this most recent news?
Do you think this adds up to something? Don't you think this indicates that there's a problem here that needs to be realized and addressed and solved?
Another of your comments:
Well, the two options as I see them are either:
1) support protectionist economic policy (which hurts us in the long run)
2) Reduce the standard of living so you can live on "competitive" salaries. I don't even know how a government would realistically lower a standard of living.

This is it, these are the only two options you think we have? There isn't anything else that can be done? I know there must be options.
[ August 05, 2003: Message edited by: Nathan Thurm ]
[ August 05, 2003: Message edited by: Nathan Thurm ]
 
Al Newman
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Well, we could have a little dive in house prices..... About 30 or 40% should do it.
 
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Originally posted by Mark Hersberg
The H1B's who come here are willing to earn less. Plain and simple.


Perhaps billion are willing to emmigrate to the US of Western Europe to work for less, plain and simple. But immigration law does not allow it.
It's not an issue of people working for less. It's an issue of the government flooding the IT market with supply.
Americans took the risk of bringing an IT skill to the market. A market the government predicted to be in short supply. Then in a move of defiance to the invisible hand the US Congress acted with all grace of the late USSR.
What we need is a new three year plan. After the 195,000 H-1B plan expires we return to the default plan. The US Congress giving a subsidy to the IT industry is communism, plain and simple.
 
Mark Herschberg
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Sorry if my comments seemed harsh. I tend to be quite sarcastic. :-)
WRT the example of Alex Dunlop, I knew nothing more then what you told me (I didn't have time to go research the whole history). Your first posting basically said: "he laid off people and stock price went up." That's all I had to go on. I didn't know that he engaged in bad accounting practices or that the company later failed. I had a feeling there was missing information, and so I threw in lots of disclaimers.
I make strong statements based on the information I have. This includes all my prior knowledge and experience, and whatever information I have about the case in front of me. It's the best I can do.
Now to the main point (btw, I like debate just for the sake of debating, which is why I do engage in side issues, but I'll try to stick to your main points).

"Each time another company shuts down operations and moves work to China, Mexico, or any other country, it has a ripple effect on the wages of every other worker in that industry, and that community, through lowering wage demands, restraining union organizing and bargaining power, reducing the tax base, and reducing or eliminating hundreds of jobs in the related contracting, transportation, wholesale trade, professional, and sevice-sector employement in companies and businesses."
And I can show you a bunch of economists who would argue otherwise. You can find an economist on just about any side. For this reason, I don't think either of us is "winning" this argument, or that it can be won; just that we offer differing perspectives.
Does it have a ripple effect? Of course it does. But wait! The company saves money and consequently shareholder value increases (or corporate buying power, or employee bonuses, etc). This also causes a ripple effect, as people sepdn more money and supply side economics takes effect.
We can go into this further, but realistically, I doubt we'll find any conclusive evidence showing that either of us is right in an absolute sense.

Originally posted by Nathan Thurm:

Second argument: The playing field is not level.
I'm trying to establish common ground here, at least an agreement that there is a problem and that that problem is the playing field is not level. That government intervention makes it more difficult for us to compete and that is not fair to the average worker. And that after realizing that there is a problem, solutions could then be considered. But I apparently failed in the attempt.


It sound like you want me to say "oh, you're right, they have an advantage, even if artificial." I won't say that. It's as much as an "advantage" as slashing most of your work force just to cut operating revenue in the short term. It's not an advantage, it's short selling the future.
You are more then welcome to go to your local bank, credit union, or payday loan vendor, and borrow lots of money so that you can easily outspend me for limited goods like hot stocks, or homes, or fancy cars. That's not an advantage, I can do it too, if I wanted to. But I know better, and in a year you'll be up to your eyeballs in debt and I'll be quite liquid.

Originally posted by Nathan Thurm:

I brought up the following government interventions:
H1b - (which even free market advocate Milton Friedman says is a subsidy),
L1 - (with legal or illegal use),
Tariffs - (India has the second highest in the land, despite the fact that they're "propping up an inefficient industry") and
OPIC.
Another one that caught my eye recently that I hadn't included before was how China ties there yuan to the value of the dollar so that their exchange rates can't vary against ours. Which, while I know it results in cheaper products for us, also makes it more difficult to compete for jobs since our costs of living are so disparate and are going to continue to be so.


Um, so remind me again the point you made about the H1B, L1, and tarrifs? I'm getting lost.
As for China, if they want to tie the yuan to the dollar, so be it. Thailand tried to do that and the country got nailed for it. China engages in this behavior at its own risk. This, like tarrifs and other tools, are not a free ride.

Originally posted by Nathan Thurm:

On top of that,according to you, we shouldn't expect the government to do anything about it (unless the unemployment rates get too high, yes I read everything that you wrote). But we shouldn't expect the government to do anything right now aside from tax cuts. We should just try to reinvent ourselves, sharpen our skillsets, try to make ourselves irreplaceable through some special talents, even while jobs are starting to be shipped en masse all over the world.
Which leads me to another thing,does it really have to be a situation where the sky is going to completely fall before anything is done? An all or nothing situation? I mean, even in the worst case, life will go on for us, but it will become more of a matter of survival rather than trying to thrive for a lot of people if we really start hemorrhaging jobs. And shouldn't that compel us to try to actually address problems and try to come up with some sort of solution that actually is to our advantage, something that can help keep our society stable and even profitable. You would think so. But evidently, the best move is no move no matter what's going on at this point.


I have never been in favor of recent tax cuts, so I'm not sure how you're coming up with that. Yes, we should just keep going and competing again everyone else out there. That's all there is too it. The government is here for things like protecting our rights, and providing social stability. I don't think the current situation crosses into the "danger zone" along either dimension, thereby requireing significant government intervention.

Originally posted by Nathan Thurm:

I also do get a kick out of your spiels on the 80's and 90's and whatever doomsday prophecies there are, repeated over and over on this board mocking anyone's concern about the current situation. And then your usual cya caveat at the end of each basically indicating that if you're wrong well governments come and go and it was going to happen anyway and well so what. Nice. Especially from the moderator of the forum.


Now you've totally lost me. As the moderator my responsibility is to make sure people follow the rules of the ranch, which pretty much boil down to:
1) Naming policy
2) Moving misplaced posts
3) Preventing flame wars

Originally posted by Nathan Thurm:


Do you think this adds up to something? Don't you think this indicates that there's a problem here that needs to be realized and addressed and solved?


No, I don't this needs to be addressed and solved in the way you do. many people here think, 6% unemployment is bad. I don't. I'm sure you can find people who would hit the panic button at 4%. Layoff announcements up 43%? How much worse is that then if it was up 20% or 5% or 1%? Where do you draw the line? Well, I draw the line further out then most people, and I don't think we've crossed it yet.

Originally posted by Nathan Thurm:

Well, the two options as I see them are either:
1) support protectionist economic policy (which hurts us in the long run)
2) Reduce the standard of living so you can live on "competitive" salaries. I don't even know how a government would realistically lower a standard of living.

This is it, these are the only two options you think we have? There isn't anything else that can be done? I know there must be options.


Um, well, those are "the two options as I see them." Propose some others, this seems to be a very popular topic. :-)
--Mark
 
It is sorta covered in the JavaRanch Style Guide.
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