Peace. The Israelis and Palestinians as well as most of the Mideast are in peace talks and reportedly everyone wants Peace. It reminds me of a Beauty Pageant with every contestant wishing for World Peace. But what is Peace? Chamberlain and Hitler both proclaimed peace in our time in 1938 only to see the world's most deadly war break out less than a year later. Chamberlain did not want to go to war and Hitler wanted Czechoslavakia. They both got what they wanted but it was an instable peace. Pacifists say if all of us would only put down our arms and put out our arms to welcome one another, all would be well. But if the past is any indication, world bullies and terrorists would gladly welcome such a situation as they would readily take advantage of an arms-free (except for theirs) world.
We should ask ourselves what does Peace mean to the various members of the peace talks? For Israel, peace means being able to co-exist with its neighbors without the pretext of war. Sounds reasonable right? To many Palestinians and Arabs, peace means having a Mideast without an Jewish state. Three times before, the world has offered Palestinians a state of their own and each time they have wanted the whole thing, both their and Jewish lands. Will they again?
It is up to the Palestinians if Peace is to be achieved. And compromise must be in order. We will see.
Tuesday, November 27, 2007
Friday, November 9, 2007
Hollywood and You
Remember the war films of WWII. Did they show up while we were at war? Of course not. They politely waited until after the war was over. The Hollywood moguls supported the war and the country. Sure there were some films satirical over certain encounters and even some critical of wars (e.g. MASH about Korea) but these came out after the fact. Ditto for both Korea and Vietnam. But not for IRAQ. Between October 07 and next summer a multitude of films concerning IRAQ will be issued. Their purpose is not to support the war but to badger Bush and the stay in Iraq strategy. Not pro-American but liberal anti-war. this is the first time we have ever had Hollywood bashing a war while in the midst of it. DOes it help the Country? Of course not. Does it assist in the war efforts? Only if you are the enemy and Al Qaeda. Do they care? Of course not. Their entire purpose is to derail the war, make America look bad, and Bash Bush as often as they can be. How are these films doing at the boxoffice? Nul. Crash and burn. Are they surprised more people are not going to them, paying to watch them trash the military and the country? Of course they are. Liberals think all people think like them (or should anyway) and act surprised when they find out 85% do not (Like the old joke . . . two ultra liberal Manhattanites talking to one another could not understand how Bush ever got elected, no one they knew voted for him). Do profits matter? I guess not anymore. Politics over profits anyday they believe (why else would MSNBC offer Rosie O Donnell a multimillion dollar position).
I can hardly wait for a positive pro-military, pro-Iraq film. But I wont hold my breath, at least among Hollywood and American media producers.
I can hardly wait for a positive pro-military, pro-Iraq film. But I wont hold my breath, at least among Hollywood and American media producers.
Black Friday
The Media is rampant about Black Friday, the day after Thanksgiving when many retailers get
most of their sales and traditionally sets off Christmas Shopping.
Just for the record I want to list the Herbig Rules for Retailing.
1) Never Ever go to a mall or big box store the Day after Thanksgiving or Christmas
2) Never Ever go to a mall or big box store between Thanksgiving and Christmas
and 3) If possible Never ever go to a mall or big box store between Christmas and Thanksgiving.
So now you have it and my love for shopping. I believe American consumers way over consume, go crazy over needless items they consider must-haves and do not know how to say NO to their children and end up buying anything and everything their child has ever expressed a question or desire for only to see it lying uselessly below the tree totally neglected by Christmas night. We need to cut back our spending and not be enticed by retailers that we must have it or if we donot we are doing an injustice to our family by not providing it or that if we do give it to our child, they will be ostracized at school for not being with it.
Stop shopping and start paying off those bills and saving. Be different for a change.
most of their sales and traditionally sets off Christmas Shopping.
Just for the record I want to list the Herbig Rules for Retailing.
1) Never Ever go to a mall or big box store the Day after Thanksgiving or Christmas
2) Never Ever go to a mall or big box store between Thanksgiving and Christmas
and 3) If possible Never ever go to a mall or big box store between Christmas and Thanksgiving.
So now you have it and my love for shopping. I believe American consumers way over consume, go crazy over needless items they consider must-haves and do not know how to say NO to their children and end up buying anything and everything their child has ever expressed a question or desire for only to see it lying uselessly below the tree totally neglected by Christmas night. We need to cut back our spending and not be enticed by retailers that we must have it or if we donot we are doing an injustice to our family by not providing it or that if we do give it to our child, they will be ostracized at school for not being with it.
Stop shopping and start paying off those bills and saving. Be different for a change.
Thursday, November 8, 2007
What Middle Class?
Prediction: By 2020, America will consist of two classes of citizens: the 5-10% ultra rich who can afford multimillion dollar houses and condos in every city they visit so they do not have to inconvenient themselves by staying in a richy hotel, whose luxury yachts begin to look bigger than naval ships, designer clothes are standard as are $1000 purses, etc. etc . And then the rest of us, the 90% who use to be called the middle class. This two class economic system is not coincidentally the same found in most undeveloped economies. . . which could give you a clue of where the US is headed if unchallenged.
Let these facts speak for themselves: In the last 20 years in REAL terms, tuition rates, housing, health care expenses, utility/gas/oil have all increased by at least 100% if not more (not to mention property taxes and other taxes)while the average real increase for the typical middle class worker (when he/she got any that is) was at most 1%. We all know what food prices have been doing lately. The middle class worker is falling further and further behind. Already, the spouse has been put to work to try to make ends meet. Second jobs if available. Credit cards and home equity have been tapped to the limit to help make ends meet.
Meanwhile millions of blue collar middle class manufacturing jobs, the type that would allow a family to have a middle class income and lifestyle while still permitting the stay at home mother/wife, have mostly migrated to China with millions more to come. White collar jobs such as professional and service (call centers, accountants, software programmers, radiologists) are heading to India in huge numbers (Alan Blinder famed economist as he is estimates as many as 45 million jobs are at risk of offshoring, any job that can be electronically transmitted is at risk). Almost all of these are middle class. Personal service jobs and retail/hotel/hospitality/restaurant jobs are still likely to stay--these, though, are not the jobs that allow a good middle class lifestyle. Add to the millions of jobs of small business owners lost to the Big Boxes (especially Walmart, the nemesis), whose only choice is to go to work for half the wages, and the Middle Class is hurting and it is only to get worse.
Foreclosures and bankrupcies are double that from last year with no end in sight. In my county, 25% of families were helped by the local food bank last year.
The economists solution is to get more education. But that is a farce. After all engineers and professionals, highly educated workers, can still be bought in India for 1/10 the price so all these workers may end up with is huge student loans that cannot be paid back.
The government claims the number of jobs is up, unemployment down, and the economy booming. However the number of jobs is a false number of prosperity. One manufacturing job lost at $20/hr and replaced with a retail job at $10/hr balances out as far as the economists are concern but the person working it is not as well off. The number of unemployed, underemployed and those who have given up looking is not 4% as economists may claim but in the high teens. The economy booming? Come look at all the empty plants and houses for sale in my county and I do not see a healthy economy.
As long as jobs continue to flow one way and replacement jobs are significantly lower in wages and benefits (if any benefits at all), the middle class will continue to hurt and decline. Those at the top (executives, investors, the moneyed class) will one day see a riot that will rival that of Marie Antoinette's Let them eat Cake when all those American consumers they had been counting on no longer have cash or assets to buy all those items made overseas. And then we will see a really third world country that once called itself America and great.
Let these facts speak for themselves: In the last 20 years in REAL terms, tuition rates, housing, health care expenses, utility/gas/oil have all increased by at least 100% if not more (not to mention property taxes and other taxes)while the average real increase for the typical middle class worker (when he/she got any that is) was at most 1%. We all know what food prices have been doing lately. The middle class worker is falling further and further behind. Already, the spouse has been put to work to try to make ends meet. Second jobs if available. Credit cards and home equity have been tapped to the limit to help make ends meet.
Meanwhile millions of blue collar middle class manufacturing jobs, the type that would allow a family to have a middle class income and lifestyle while still permitting the stay at home mother/wife, have mostly migrated to China with millions more to come. White collar jobs such as professional and service (call centers, accountants, software programmers, radiologists) are heading to India in huge numbers (Alan Blinder famed economist as he is estimates as many as 45 million jobs are at risk of offshoring, any job that can be electronically transmitted is at risk). Almost all of these are middle class. Personal service jobs and retail/hotel/hospitality/restaurant jobs are still likely to stay--these, though, are not the jobs that allow a good middle class lifestyle. Add to the millions of jobs of small business owners lost to the Big Boxes (especially Walmart, the nemesis), whose only choice is to go to work for half the wages, and the Middle Class is hurting and it is only to get worse.
Foreclosures and bankrupcies are double that from last year with no end in sight. In my county, 25% of families were helped by the local food bank last year.
The economists solution is to get more education. But that is a farce. After all engineers and professionals, highly educated workers, can still be bought in India for 1/10 the price so all these workers may end up with is huge student loans that cannot be paid back.
The government claims the number of jobs is up, unemployment down, and the economy booming. However the number of jobs is a false number of prosperity. One manufacturing job lost at $20/hr and replaced with a retail job at $10/hr balances out as far as the economists are concern but the person working it is not as well off. The number of unemployed, underemployed and those who have given up looking is not 4% as economists may claim but in the high teens. The economy booming? Come look at all the empty plants and houses for sale in my county and I do not see a healthy economy.
As long as jobs continue to flow one way and replacement jobs are significantly lower in wages and benefits (if any benefits at all), the middle class will continue to hurt and decline. Those at the top (executives, investors, the moneyed class) will one day see a riot that will rival that of Marie Antoinette's Let them eat Cake when all those American consumers they had been counting on no longer have cash or assets to buy all those items made overseas. And then we will see a really third world country that once called itself America and great.
Drop Outs anonymous
New reports are arising about the 'dropout' factories that exist in many American schools.
Hundreds of high schools have final graduation rates of less than 50% of those who enter as freshmen. A disgrace. Yes it is. In this technology driven economy when if are behind if you do not have a bachelor's degree, what can you do without a High School diploma? Work at Burger King? Manual labor at an assembly line that will soon be moved to China? Mow laws and personal services? No, life without a high school degree is not a pleasant item to consider. Yet millions of young men and women do so, much to their regret. Many recommendations have been considered which will require billions of dollars and thousands of highly trained personnel.
I have another idea which will not cost a dime. Simply require students to remain in school until their 18th birthday. What a novel approach. Many students under such a requirement will accept the inevitable and graduate since so little extra effort would be required. Exceptions? Three exceptions would be given: a student taking college courses or early admission in an institute of higher education; entering one of the military armed services (a GED could be provided for those with a year or so to finish), or entering an accredited apprentice or skilled workforce program (welding, machine operator, etc) with earning GED as part of the program.
We do not have to have a drop out problem; we bring it upon ourselves. IF we do not wish to have it, do not allow it as an option. How simple could it be?
Hundreds of high schools have final graduation rates of less than 50% of those who enter as freshmen. A disgrace. Yes it is. In this technology driven economy when if are behind if you do not have a bachelor's degree, what can you do without a High School diploma? Work at Burger King? Manual labor at an assembly line that will soon be moved to China? Mow laws and personal services? No, life without a high school degree is not a pleasant item to consider. Yet millions of young men and women do so, much to their regret. Many recommendations have been considered which will require billions of dollars and thousands of highly trained personnel.
I have another idea which will not cost a dime. Simply require students to remain in school until their 18th birthday. What a novel approach. Many students under such a requirement will accept the inevitable and graduate since so little extra effort would be required. Exceptions? Three exceptions would be given: a student taking college courses or early admission in an institute of higher education; entering one of the military armed services (a GED could be provided for those with a year or so to finish), or entering an accredited apprentice or skilled workforce program (welding, machine operator, etc) with earning GED as part of the program.
We do not have to have a drop out problem; we bring it upon ourselves. IF we do not wish to have it, do not allow it as an option. How simple could it be?
All or nothing
Within the last week a series of articles riveted throughout America in the Dailies. It concerned teacher sex abuses of students. The article indicated 3000 incidents over the past 5 years had be been recorded and how could we as a nation stand for that. Recommendations included more stifling measures such as annual polygraphs etc.
I took a solid objective look at this. The article indicated over 3 million teachers are employed. Even if the incidents are underplayed and 30,000 incidents occurred, that equates out to 1% over 5 years. I agree 30,000 incidents are 30,000 too many, however think of it from another perspective, any organization would be thrilled to have 99% competent, moral and effective employees. Think of it in these terms: 1% of the US population is in prison or jail and another 1-2% should be. We should be thankful for the 99% dedicated teachers we have. If we attempt to go overboard seeking the 1% bad apples, we could well lose many times that many who do not wish to go through the hassles that are being proposed. Criminal checks, background checks, reference checks are already being used. If those were insufficient to find spy moles in the CIA, some bad apples are going to get through even if using polygraphs, cameras in the classroom, etc. In fact, I will predict witch hunts will hurt many more teachers' reputations than finding the bad apples. What happens when it gets down to the proverbial he said, she said situation between a student and a teacher. Who do you believe? Whose side do you take? What do you as a teacher must you do to protect yourself?
But the problem goes well beyond that of teachers; it is a modern culture thing where you expect 100% satisfaction. The No Child left behind act seeks 100%. 100% of anything in a social world is difficult if not impossible. We want our military victories to be bloodless and every casualty is front page. We desire all our products to work perfectly and have no problems. We demand our medicines to be perfect with no side effects. Let's face it 100% is not realistic. To expect perfection is to be set up for disappointment and failure. We demand our children to be perfect and get A+s in every subject and ground them when they disappoint us with a A-. We do not like our nose and spend thousands to get the perfect look when no one else notices. Seeking perfection is a sure road to depression and self destruction.
America settle for more realistic goals.
I took a solid objective look at this. The article indicated over 3 million teachers are employed. Even if the incidents are underplayed and 30,000 incidents occurred, that equates out to 1% over 5 years. I agree 30,000 incidents are 30,000 too many, however think of it from another perspective, any organization would be thrilled to have 99% competent, moral and effective employees. Think of it in these terms: 1% of the US population is in prison or jail and another 1-2% should be. We should be thankful for the 99% dedicated teachers we have. If we attempt to go overboard seeking the 1% bad apples, we could well lose many times that many who do not wish to go through the hassles that are being proposed. Criminal checks, background checks, reference checks are already being used. If those were insufficient to find spy moles in the CIA, some bad apples are going to get through even if using polygraphs, cameras in the classroom, etc. In fact, I will predict witch hunts will hurt many more teachers' reputations than finding the bad apples. What happens when it gets down to the proverbial he said, she said situation between a student and a teacher. Who do you believe? Whose side do you take? What do you as a teacher must you do to protect yourself?
But the problem goes well beyond that of teachers; it is a modern culture thing where you expect 100% satisfaction. The No Child left behind act seeks 100%. 100% of anything in a social world is difficult if not impossible. We want our military victories to be bloodless and every casualty is front page. We desire all our products to work perfectly and have no problems. We demand our medicines to be perfect with no side effects. Let's face it 100% is not realistic. To expect perfection is to be set up for disappointment and failure. We demand our children to be perfect and get A+s in every subject and ground them when they disappoint us with a A-. We do not like our nose and spend thousands to get the perfect look when no one else notices. Seeking perfection is a sure road to depression and self destruction.
America settle for more realistic goals.
China and You
I read about another toy recall today. The toys were made in where else but China. Lead paint. Now Date rape drug. China's usual response: to badger the companies and complain about unfair treatment in the US. After the last recall Mattel actually APOLOGIZED to China. Tail wagging dog again? China thinks it is king and we ought to kowtow to it. Arent they shipping cheap cheap goods to US. Isnt that enough? Add health, environment, and safety standards? Hey we're china we dictate not you. Perhaps the Democrats are correct. Part of any trade negotiations should include setting standards. Either that or ALL goods incoming to the US must meet the higher standards we have. I have another idea. A really really far fetched one. Why dont we start manufacturing goods in the good old USA again. Far out. Who would have ever thought of that. Then we dont have to worry about standards since they would be built in. But then we might actually have to pay a few cents more. And instead of cheap quality get some actually quality and durability. What a novel idea. We might even get more employment out of the deal. Workers who would be paid enough to be able to afford to buy the good. Hey wasnt this Henry Ford who first had the idea. One hundred years ago. Not a bad notion at that. Huh. Might work.
Should we try it?
Should we try it?
Wednesday, November 7, 2007
८५%solution
Newt Gingrich and his Solutions for America released a series of nationwide polls on a variety of American values topics. Non partisan, objective, nationally, the polls represent a valid sample of American opinion. The Key number that continued to pop up in poll after poll was 85%. Consistently through all ages, genders, ethnics, republican=democrat-independent. This was the proportion of Americans who supported traditional American values and actions. Geographically the "heartland" was consistent (the heartland being that part of America often called the 'fly over" part between the two coasts). Coincidentally or not, 85% of Americans call themselves Christian, believe in God, attend church, and believe in Judeo Christian system of beliefs and government. It appears Republicans, independents, and regular democrats alike of the heartland support that belief.
What was time after time and again not in that 85% turned out to be the East-West coasts, urban elite, ultra liberals. These results should give most politicians pause and second thoughts about attacking traditional values. Getting 85% of the people to agree on anything is about as close to a consensus as it gets.
However the 10-12% that fall in the ultraliberal camp could care less about the poll results. They could care less about what other people think. They know in their hearts that they are right. Like any elite, they believe they are right, the people are wrong, and it is up to them to "educate" or "persuade" or downright "regulate" their beliefs upon the rest of America, those little children who do not understand that they know better and know what is best for America. Hillary is a prime example and if elected will do her damnest to mandate the 10% liberal secular progressive values upon the 85% of the rest of us.
Note the war is not between Republican and Democrats. the heartland democrats are moderates and for the most part hold the beliefs of the Heartland. It is them versus us or Liberals versus Almost all other Americans. Thisis what you must think about when viewing 08 elections, do you want to vote into office the ultra liberals who could care less about what 85& of Americans think? or someone who will respect your values? The choice is yours. The future (or what might be left of it) is up to you.
What was time after time and again not in that 85% turned out to be the East-West coasts, urban elite, ultra liberals. These results should give most politicians pause and second thoughts about attacking traditional values. Getting 85% of the people to agree on anything is about as close to a consensus as it gets.
However the 10-12% that fall in the ultraliberal camp could care less about the poll results. They could care less about what other people think. They know in their hearts that they are right. Like any elite, they believe they are right, the people are wrong, and it is up to them to "educate" or "persuade" or downright "regulate" their beliefs upon the rest of America, those little children who do not understand that they know better and know what is best for America. Hillary is a prime example and if elected will do her damnest to mandate the 10% liberal secular progressive values upon the 85% of the rest of us.
Note the war is not between Republican and Democrats. the heartland democrats are moderates and for the most part hold the beliefs of the Heartland. It is them versus us or Liberals versus Almost all other Americans. Thisis what you must think about when viewing 08 elections, do you want to vote into office the ultra liberals who could care less about what 85& of Americans think? or someone who will respect your values? The choice is yours. The future (or what might be left of it) is up to you.
Friday, November 2, 2007
ABC
Three months before the primaries, nine months before the conventions and one year the election, political opinion has all but delivered the presidency to Hillary. But lots can happen in a year. Ask Bush the father who in April 91 was near to God after his victory in Kuwait/Iraq only to see a recession and tax bill wipe out his chances for a second term.
Hillary only has to open her mouth to lose. She is a political puppet echoing back poll results and prepared statements. Anytime she adlibs or gets away from well rehearsed lines, she flobs it. She waffles and does not answer the question since as any politician knows too well, anything you say will make somebody mad and she does not want to do that. But a leader is a different creature, willing to stand up for his beliefs knowing somepeople somewhere will be upset. She knows that her only way to winning is to create a persona that is 180 degrees opposite from what she really is. Sell a bill of goods to the voters to get in office wherein she will then be able to do what she wants without regard . . . raise taxes, increase drastically government, mandated health care, the entire ultra liberal platform. The more people get to know her, the real her, the arrogant, vicious, destructive side of her personality, the more they will vote against her. Already nearly 40% of the populace indicate in polls they would rather vote for the man int he moon than Hillary. That is a sizeable uphill battle no matter if Bill is her husband (and he has as many negatives).
No, it is ABC time, Anybody But Clinton. By attacking her and forcing her to respond impromptu, she is beginning to make a fool of herself and her personal beliefs beginning to get out. If she insists to continue to waffle, her indecisiveness will cost her support (do you really want a president who will conduct a poll of the people to see what they would like to do in the midst of a national crisis?)
No, despite all predictions I am not even sure she will be the democrat's final candidate come summer08. Too much baggage. Bill does not help with the general public. And come next November if hillary is still around, it will be 53-47 Republicans with over 300 electoral votes no matter who the nominee will be. The sooner the publics gets to know this nasty revengeful lady for whom she really is and what she is likely to do if she would ever get in office, the more they will say goodbye and good riddance.
Hillary only has to open her mouth to lose. She is a political puppet echoing back poll results and prepared statements. Anytime she adlibs or gets away from well rehearsed lines, she flobs it. She waffles and does not answer the question since as any politician knows too well, anything you say will make somebody mad and she does not want to do that. But a leader is a different creature, willing to stand up for his beliefs knowing somepeople somewhere will be upset. She knows that her only way to winning is to create a persona that is 180 degrees opposite from what she really is. Sell a bill of goods to the voters to get in office wherein she will then be able to do what she wants without regard . . . raise taxes, increase drastically government, mandated health care, the entire ultra liberal platform. The more people get to know her, the real her, the arrogant, vicious, destructive side of her personality, the more they will vote against her. Already nearly 40% of the populace indicate in polls they would rather vote for the man int he moon than Hillary. That is a sizeable uphill battle no matter if Bill is her husband (and he has as many negatives).
No, it is ABC time, Anybody But Clinton. By attacking her and forcing her to respond impromptu, she is beginning to make a fool of herself and her personal beliefs beginning to get out. If she insists to continue to waffle, her indecisiveness will cost her support (do you really want a president who will conduct a poll of the people to see what they would like to do in the midst of a national crisis?)
No, despite all predictions I am not even sure she will be the democrat's final candidate come summer08. Too much baggage. Bill does not help with the general public. And come next November if hillary is still around, it will be 53-47 Republicans with over 300 electoral votes no matter who the nominee will be. The sooner the publics gets to know this nasty revengeful lady for whom she really is and what she is likely to do if she would ever get in office, the more they will say goodbye and good riddance.
Monday, October 8, 2007
$$$$
Third quarter numbers are in and it is official: Hillary wins. That was the headlines. What did she win? Not the popular vote but the $$$ vote. At this time of year the media follows not popular opinion but who has raised the most money. Does anyone else than me find this disgusting? First in the modern era, to run for President you must have nothing else to do for 2 years, have access to $100 million (just to win the primary), and know how to seduce the press and public. Some of our finest presidents such as Abe lincoln and Harry Truman, never rich, would never have qualified. Is America's future going to be which billionaire wants the presidency? Is that what we want? Secondly, I thought political races were about votes not money. When Barrack is downgraded because he failed to raise the same amount of money as Hillary, what does that prove? Absolutely nothing. One billionaire and he could be ahead in no time. In the end it comes down to popular opinion. The way the media is held is disdain and the way most politicians are disliked, heavy ad campaigns will only further irritate the american people.
I wonder about the future of this country and the leaders we are creating. Not statesman but moneyed politicians who can literally buy races. Should not we take a step back and rethink this and the potential fatal future it bodes for democracy?
I wonder about the future of this country and the leaders we are creating. Not statesman but moneyed politicians who can literally buy races. Should not we take a step back and rethink this and the potential fatal future it bodes for democracy?
Saturday, October 6, 2007
Jobs
Today I heard two differnt economic statistics and was depressed. The first one was a government report that cheerfully indicated that 151,000 jobs had been created last month--a great achievement . . . or is it? Are all jobs the same?
The second economic report indicated that over 200,000 manufacturing jobs had been lost and the number of manufacturing jobs in the US was at its lowest point since 1950. At the same time it was reported that service jobs (food/lodging/tourism) and health care jobs both increased by 300,000.
Then I saw a NBC report concerning Flint with unemployment rate of nearly 15%. One man who was interviewed indicated that he had been unemployed since May, could not find a comparative manufacturing job, and was thinking of changing industries to . . you guessed it health care.
Let's take this one worker and generalize. He was working at a manufacturing job making probably 15 to 20/hr (more likely nearer 20) with solid health benefits and retirement. Now he is thinking of moving to the service industry (health care) in an effort to survive (not unlike millions of others in the same predictament). But more than likely this means taking a job at near 10-12/hr with few benefits. To make up what he had made his spouse must work or he must work two jobs. Whatever occurs, he is much worse off and his standard of living and quality of life has fallen tremendously.
But no worry. According to job numbers, one was lost and one was gain so all okay. The government is happy as unemployment is down and jobs created is up. However, the worker is worse off and is sincere danger of falling further down the economic ladder.
Not all jobs are the same. Perhaps to economists they are but to the ordinary workers who must contend with offshoring and loss of good manufacturing jobs and take much lesser paying service jobs, they are death come early.
Lets have new economic data to reflect the quality of jobs gained and lost. Otherwise the US is in danger of a two class system, the Elite and the serfs.
The second economic report indicated that over 200,000 manufacturing jobs had been lost and the number of manufacturing jobs in the US was at its lowest point since 1950. At the same time it was reported that service jobs (food/lodging/tourism) and health care jobs both increased by 300,000.
Then I saw a NBC report concerning Flint with unemployment rate of nearly 15%. One man who was interviewed indicated that he had been unemployed since May, could not find a comparative manufacturing job, and was thinking of changing industries to . . you guessed it health care.
Let's take this one worker and generalize. He was working at a manufacturing job making probably 15 to 20/hr (more likely nearer 20) with solid health benefits and retirement. Now he is thinking of moving to the service industry (health care) in an effort to survive (not unlike millions of others in the same predictament). But more than likely this means taking a job at near 10-12/hr with few benefits. To make up what he had made his spouse must work or he must work two jobs. Whatever occurs, he is much worse off and his standard of living and quality of life has fallen tremendously.
But no worry. According to job numbers, one was lost and one was gain so all okay. The government is happy as unemployment is down and jobs created is up. However, the worker is worse off and is sincere danger of falling further down the economic ladder.
Not all jobs are the same. Perhaps to economists they are but to the ordinary workers who must contend with offshoring and loss of good manufacturing jobs and take much lesser paying service jobs, they are death come early.
Lets have new economic data to reflect the quality of jobs gained and lost. Otherwise the US is in danger of a two class system, the Elite and the serfs.
Tuesday, October 2, 2007
Deficits
Deficits?
Just read today that a poll indicates the public believes the Democrats are the party more likely to eliminate government deficits. That may be the truth but it paints a false image of the true question. A deficit occurs when one spends more than one makes. A balance budget is when spending and earning equate. As a famous democrat once said, “Republicans and I both believe in balance budgets. . . only he wants it balanced at 1 Trillion and I want it balanced at 2 Trillion.” A democrat has never met a spending bill he did not like (except for piddly things like national defense and security). Sure the Democrats are more likely to eliminate deficits, by increasing spending and then increasing taxes more than enough. If you think you are taxed enough now, just wait until Hillary and her love of big government gets in . . . give every baby 5000 why? So parents can spend it right away? What is she thinking of?
The correct question is not best to eliminate deficits (there are 2 ways to eliminate deficits, higher taxes or less spending . . . when was the last time you heard anyone mention the second position?) but how to grow the economy so as to grow one’s way out of the deficit (that is, spend less than you make and eventually you will earn more than you spend . . . I am sure most consumers understand this philosophy).
Be careful of what you ask for since you might get it.
Just read today that a poll indicates the public believes the Democrats are the party more likely to eliminate government deficits. That may be the truth but it paints a false image of the true question. A deficit occurs when one spends more than one makes. A balance budget is when spending and earning equate. As a famous democrat once said, “Republicans and I both believe in balance budgets. . . only he wants it balanced at 1 Trillion and I want it balanced at 2 Trillion.” A democrat has never met a spending bill he did not like (except for piddly things like national defense and security). Sure the Democrats are more likely to eliminate deficits, by increasing spending and then increasing taxes more than enough. If you think you are taxed enough now, just wait until Hillary and her love of big government gets in . . . give every baby 5000 why? So parents can spend it right away? What is she thinking of?
The correct question is not best to eliminate deficits (there are 2 ways to eliminate deficits, higher taxes or less spending . . . when was the last time you heard anyone mention the second position?) but how to grow the economy so as to grow one’s way out of the deficit (that is, spend less than you make and eventually you will earn more than you spend . . . I am sure most consumers understand this philosophy).
Be careful of what you ask for since you might get it.
TheRich
Who is rich?
The Democrats are at it again. Soak the rich. Equitable society. It got me thinking who exactly are the rich?
I used to live in San Antonio and Laredo Texas. Land of the illegal. To the poverty stricken Mexican scratching out an existence in a single room hut with only outdoor plumbing, the illegals living in Laredo with six or eight or ten in a house having their own indoor plumbing and electricity were rich. To those same Laredoans, a Mexican, legal or not, living in the slums of south San Antonio in a small 500-800 square foot duplex home with no one else but their family, be it two, four, six or eight members, had it too well off. To a south San Antonio low income family, a middle class home in middle of town with 1200 square feet, two baths, two or three bedrooms, and a small backyard had to be rich. To a middle class worker, looking at those ‘huge’ Northside homes (2500 square feet, 3 bath, 3 bedrooms, two car garage for 150-175K), they surely were the residences of the wealthy. To the average Northsider, the wealthier enclaves of the city with their 4000 square foot, half acre lots, with prices over 300-400K, that must have been heaven. To those folks, scratching out a living with two professionals, they looked with envy at the Gates, the Dells, and others, surely richer than rich could be.
So what is rich? Everyone believes those above him on the economic scale are rich while ignoring the fact that all those beneath him believe him to be rich. Wealth envy. If I only could have some of their (those above) income, one thinks to himself, forgetting all those beneath him are thinking the same. It is a no win game. There are not enough rich to make everyone better off. Confiscate all of Bill Gates immense wealth and each citizen of the US will get $200, perhaps $250 each, hardly enough to worry about. But it makes good press, gets politicians elected, and government growing.
Who is the rich? Well to anyone below you and I, it is you and I, and to you and I, anyone with more than what you or I have.
The Democrats are at it again. Soak the rich. Equitable society. It got me thinking who exactly are the rich?
I used to live in San Antonio and Laredo Texas. Land of the illegal. To the poverty stricken Mexican scratching out an existence in a single room hut with only outdoor plumbing, the illegals living in Laredo with six or eight or ten in a house having their own indoor plumbing and electricity were rich. To those same Laredoans, a Mexican, legal or not, living in the slums of south San Antonio in a small 500-800 square foot duplex home with no one else but their family, be it two, four, six or eight members, had it too well off. To a south San Antonio low income family, a middle class home in middle of town with 1200 square feet, two baths, two or three bedrooms, and a small backyard had to be rich. To a middle class worker, looking at those ‘huge’ Northside homes (2500 square feet, 3 bath, 3 bedrooms, two car garage for 150-175K), they surely were the residences of the wealthy. To the average Northsider, the wealthier enclaves of the city with their 4000 square foot, half acre lots, with prices over 300-400K, that must have been heaven. To those folks, scratching out a living with two professionals, they looked with envy at the Gates, the Dells, and others, surely richer than rich could be.
So what is rich? Everyone believes those above him on the economic scale are rich while ignoring the fact that all those beneath him believe him to be rich. Wealth envy. If I only could have some of their (those above) income, one thinks to himself, forgetting all those beneath him are thinking the same. It is a no win game. There are not enough rich to make everyone better off. Confiscate all of Bill Gates immense wealth and each citizen of the US will get $200, perhaps $250 each, hardly enough to worry about. But it makes good press, gets politicians elected, and government growing.
Who is the rich? Well to anyone below you and I, it is you and I, and to you and I, anyone with more than what you or I have.
Hatecrimes
New Bill in Congress to make Crimes against Gays a Hate Crime. I always wondered about hate crimes. if I kill someone I am guilty of murder and can be punishable by death. If I do it against a protected minority (it always seems the minorities are protected not the majority) than I can be accused of a hate crime. What are they going to do? Kill me again?
AMerica has this thing called Free Speech. It is often abused--as Move Org and Media Matters have been doing recently. But it exists. Part of free speech is my inherent right to think as I wish (no matter how badly or filthy or deviously). Hate crimes is a not so subtle attempt to instill politically correct thoughts in everyone. I always thought that no matter if I hated the person next to me, if I did not say or do anything or showed that hatred in any way, no harm no foul. I guess not. As Jimmy Carter once said, "I have lusted in my heart." Well today he might be found guilty of sexual harassement just for thinking that thought.
Just another thought. We can have hate crimes against gays and blacks and women but when was the last time you had a hate crime against Christians or Men or the Middle Class? Why the exception? If you are going to do it, do it right and exclude all hate crimes against all persons irregardless. But you cannot otherwise no one would speak at all to anyone else. (Isnt hate subjective anyway? If I love you and you do not love me than not stating that love to me is hating me isnt it?) Oh well. You get my point.
I would do away with all hate crimes. You can think it just do not do it. and we have enough laws on the books as it is anyway.
pah
AMerica has this thing called Free Speech. It is often abused--as Move Org and Media Matters have been doing recently. But it exists. Part of free speech is my inherent right to think as I wish (no matter how badly or filthy or deviously). Hate crimes is a not so subtle attempt to instill politically correct thoughts in everyone. I always thought that no matter if I hated the person next to me, if I did not say or do anything or showed that hatred in any way, no harm no foul. I guess not. As Jimmy Carter once said, "I have lusted in my heart." Well today he might be found guilty of sexual harassement just for thinking that thought.
Just another thought. We can have hate crimes against gays and blacks and women but when was the last time you had a hate crime against Christians or Men or the Middle Class? Why the exception? If you are going to do it, do it right and exclude all hate crimes against all persons irregardless. But you cannot otherwise no one would speak at all to anyone else. (Isnt hate subjective anyway? If I love you and you do not love me than not stating that love to me is hating me isnt it?) Oh well. You get my point.
I would do away with all hate crimes. You can think it just do not do it. and we have enough laws on the books as it is anyway.
pah
Saturday, September 22, 2007
MattelChina
After the British surrendered at Yorktown, their band played The World Turned Upside Down. Sometimes looking at headlines I feel the same way.
Just today, Mattel apologized to China for recalling millions of Chinese made toys. Now this should disturb everyone. What exactly did Mattel do? Protecting american consumers. Chinese manufacturers were exporting goods that had health and safety problems (ie. lead paint). So why apologize. Because China had been upset that their goods had been recalled and Mattel with most if not all of their toy production in china was afraid of reprisals and was afraid of upsetting the golden goose. Does this show the power china has over companies? If anything, china should have apologized for sending such products to the US. However, china feels its contribution of cheap cheap labor is sufficient and any product should be satisfactory. China is thinking about retaliating against some US exports to China.
It was inevitable, the Chinese swinging their muscle around. Now that we are hooked on their cheap labor, they are going to take advantage. What can we do? Go back to good old American manufacturing before it is too late.
Just today, Mattel apologized to China for recalling millions of Chinese made toys. Now this should disturb everyone. What exactly did Mattel do? Protecting american consumers. Chinese manufacturers were exporting goods that had health and safety problems (ie. lead paint). So why apologize. Because China had been upset that their goods had been recalled and Mattel with most if not all of their toy production in china was afraid of reprisals and was afraid of upsetting the golden goose. Does this show the power china has over companies? If anything, china should have apologized for sending such products to the US. However, china feels its contribution of cheap cheap labor is sufficient and any product should be satisfactory. China is thinking about retaliating against some US exports to China.
It was inevitable, the Chinese swinging their muscle around. Now that we are hooked on their cheap labor, they are going to take advantage. What can we do? Go back to good old American manufacturing before it is too late.
Healthinsurance
This week some of the presidential candidates brought to the table their proposals on health insurance for America. I believe we are heading in the right direction. My thoughts :
Private: Not public monies nor government health but using the private insurance industry.
Required: All family units must have a health policy, one that they can specify to their particular requirements. However ALL policies should have some standard items, particularly oriented towards preventive medicine: free annual checkups, teeth cleaning, etc.
National: right now, states monitor and regulate insurers. Insurers need to be able to conduct business nationwide.
Portable: it is your policy you take with you no matter where you are employed. the company you work for might subsidize it but when you leave, you take it with you.
transparent: costs for services must be publicized and easily understood.
tax aspects: the 12000 deductible for health insurance should be incorporated.
low income: credits towards purchasing insurance should be given to those low income
if this can work out than elimination of Medicare and Medicaid through use of private insurers is a long term entity.
I believe the discussion is in the right direction but it needs to avoid governmental control and regulation (as in a National health care). A Universal coverage is okay as long as it is contained within the private sector
More later
Private: Not public monies nor government health but using the private insurance industry.
Required: All family units must have a health policy, one that they can specify to their particular requirements. However ALL policies should have some standard items, particularly oriented towards preventive medicine: free annual checkups, teeth cleaning, etc.
National: right now, states monitor and regulate insurers. Insurers need to be able to conduct business nationwide.
Portable: it is your policy you take with you no matter where you are employed. the company you work for might subsidize it but when you leave, you take it with you.
transparent: costs for services must be publicized and easily understood.
tax aspects: the 12000 deductible for health insurance should be incorporated.
low income: credits towards purchasing insurance should be given to those low income
if this can work out than elimination of Medicare and Medicaid through use of private insurers is a long term entity.
I believe the discussion is in the right direction but it needs to avoid governmental control and regulation (as in a National health care). A Universal coverage is okay as long as it is contained within the private sector
More later
moralhazard
Moral Hazard is a term used by economists to denote situation where people have no risk in an action. For example, let us say you have no deductible for auto insurance and no penalty for behavior. You are more likely to undergo risky activity than otherwise. Companies are likewise. If I know my parents will bail me out, buy me a new car, repair my old one, and not dock me for it, I am more inclined to engage in higher risk activities than if I had to pay so myself.
This week, the Fed cut the discount rate a half point to provide market stability as a result of the sub prime mortgage crisis. I do not believe they should have done so. They are creating a moral hazard for those firms who participated in risky behavior and have now set a bad precedent: go ahead and go for the high risk high payout situations and if problems occur, we will bail you out. Firms, like people, need to know they must pay the piper for their bad decisions.
This week, the Fed cut the discount rate a half point to provide market stability as a result of the sub prime mortgage crisis. I do not believe they should have done so. They are creating a moral hazard for those firms who participated in risky behavior and have now set a bad precedent: go ahead and go for the high risk high payout situations and if problems occur, we will bail you out. Firms, like people, need to know they must pay the piper for their bad decisions.
Wednesday, September 12, 2007
Immigration again
One of the major arguments immigration proponents use is that we are a nation of immigrants and all of us are descended from immigrants so what if they wanted to wall off the borders before your forefathers came? This is an apples to oranges argument. For most of us, our ancestoral immigrants came to the Americas in the eighteenth or nineteenth centuries. The U.S. was mostly a vacant land needing bodies to fill it, to farm it, to man the new plants that were going up everywhere. That was then. Now, the country is full. No new lands to discover. No new farms to plow. As far as the manufacturing plants go, is it merely a coincidence that the first public discourse and discontent on immigrant occurred in the 1920s when unemployment became real and personal? When companies were begging people to take jobs and immigrants could not do so quickly enough, that was find. But now jobs are still scarce . . . the imaginary 5% unemployment rate does not take into account those discouraged that they have stopped looking or the underemployed . . . if it were to do so, the rate would be closer to 10 percent or higher.
The other argument used is that immigrants only take jobs Americans do not want to do. Let us paraphrase it correctly: Immigrants only take jobs Americans do not want to hold AT THE RATE OF PAY OFFERED. Research has indicated immigrants pull down the wages for a community since they are willing to work for much lower than regular Americans. Companies are smart and offer less with fewer benefits. But recent stories about ICE raids and companies needing to fill these positions have indicated a surge of American citizens applying for those jobs. So nix that argument too.
Companies should offer jobs to American citizens and pay a liveable wage before offering jobs to aliens. (If your regular citizen has a mortgage and pays utilities, he or she naturally needs more to live on than a mexican alien living twelve to a house)
Companies have a responsiblity to American citizens. They want to hire americans to get American productivity and creativity and know-how but want to pay Indian wages with Chinese health/safety/labor benefits. They cannot have it both ways.
The other argument used is that immigrants only take jobs Americans do not want to do. Let us paraphrase it correctly: Immigrants only take jobs Americans do not want to hold AT THE RATE OF PAY OFFERED. Research has indicated immigrants pull down the wages for a community since they are willing to work for much lower than regular Americans. Companies are smart and offer less with fewer benefits. But recent stories about ICE raids and companies needing to fill these positions have indicated a surge of American citizens applying for those jobs. So nix that argument too.
Companies should offer jobs to American citizens and pay a liveable wage before offering jobs to aliens. (If your regular citizen has a mortgage and pays utilities, he or she naturally needs more to live on than a mexican alien living twelve to a house)
Companies have a responsiblity to American citizens. They want to hire americans to get American productivity and creativity and know-how but want to pay Indian wages with Chinese health/safety/labor benefits. They cannot have it both ways.
Sunday, September 2, 2007
taxesagain
1) My take on the property tax situation is that people are up at arms for three main reasons.
a) There is a mismatch between what they are paying (property taxes) and the services these taxes go towards (that is, gas tax goes for highways, everyone knows that and it makes paying the tax more palpable; while elderly couples without kids are paying high levels of taxation mainly to go to schools)
b) The huge increases seen (50 to 100% or more) (most people understand their property values have gone up but these huge increases are undermining family economics and taxpayer morale at the same time) and;
c) A wonderment that if my taxes double, where is all that money going towards? That is, I have not seen government services double their quality so what am I getting for all that I am paying?
My suggestions for resolving this dilemma are as follows:
1) Realign the tax system. Some have cried out for totally abolishing the property taxes. I believe there is a purpose for it if it is reformed into a true user tax. I propose that property taxes be used for only those governmental accounts that are related to property: a) security (police, and criminal justice system including prisons and jails), b) fire protection, c) trash and waste, and d) local road maintenance. Perhaps a few more might be included (for example parks and bike paths since they enhance the value of your property) but these are the major items. As can be seen, a direct connect can be made to each of these. All are directly related to your property, your house or residence and the protection or increased valuation thereof.
2) Secondly, I propose that ALL property be taxed. This includes non-profits (including churches), all governmental entities, commercial as well as private. In addition, not just real estate but the value of all possessions on the property should be included (after all, a thief is as interested or more in the jewelry and computers that exist under your roof as your property alone). Notice ALL property . . . a church is protected by the police and fire, why should not it pay according to the value of its property. A property with a BMW and a JAG in the garage has more to protect than a similar property with two ten year old compacts in the garage, why should they not pay more? This means that renters would pay a tax on their possessions but not the residence.
3) A major problem that has come up in Indiana deals with property evaluation and reassessment. All property values should be considered at current market value (what an unaffiliated entity would pay for the property). Reassessment should be at the time of the sale (sale amount) or every 5 years. If after 5 years, a revaluation is made, the value upon which the tax should be paid should not increase beyond 10% per year until it reaches the new assessment level. Once again, the public does not argue that its property has gone up in value only that the increase is all at once and offers a dreadful sticker shock.
4) To counter the third concern: where did all the money go? I suggest a cap on the property tax as well as a cap on increased government take (that is, government spending cannot exceed 3% per year with anything over that refunded back to the taxpayers).
Since education has been deleted and the taxable items made more encompassing, it is highly probable that the direct property tax rates (typically 1 to 4% of the residential value) will fall drastically. And in addition, the public should be considerably more amiable to paying for services that can directly connect with the taxes.
Allocation of the monies. The state should institute the tax state wide and deliver the monies to the county. Each county and municipality should then have the option of including a local surtax. The county should be the fiscally responsible agent.
Where does education come in? If Property taxes are not to be used to fund education, then what? The relationship between income and education level is quite conclusive: the better educated one is, the higher one's income. Therefore, a better revenue provider for education should be the income tax . . . of a flat, minimal exemption variety. Education dollars should come through the state coffers via the income tax and flow directly to those eligible . . . students from K through grade 16 That is, each student would receive a voucher for his/her share that could be used for any state approved educational institute in the state . . . public or private. This means that while we are at the process of revising the tax system we might want to review the educational process as well.
What do you think?
Thanks for the opportunity to voice my views.
a) There is a mismatch between what they are paying (property taxes) and the services these taxes go towards (that is, gas tax goes for highways, everyone knows that and it makes paying the tax more palpable; while elderly couples without kids are paying high levels of taxation mainly to go to schools)
b) The huge increases seen (50 to 100% or more) (most people understand their property values have gone up but these huge increases are undermining family economics and taxpayer morale at the same time) and;
c) A wonderment that if my taxes double, where is all that money going towards? That is, I have not seen government services double their quality so what am I getting for all that I am paying?
My suggestions for resolving this dilemma are as follows:
1) Realign the tax system. Some have cried out for totally abolishing the property taxes. I believe there is a purpose for it if it is reformed into a true user tax. I propose that property taxes be used for only those governmental accounts that are related to property: a) security (police, and criminal justice system including prisons and jails), b) fire protection, c) trash and waste, and d) local road maintenance. Perhaps a few more might be included (for example parks and bike paths since they enhance the value of your property) but these are the major items. As can be seen, a direct connect can be made to each of these. All are directly related to your property, your house or residence and the protection or increased valuation thereof.
2) Secondly, I propose that ALL property be taxed. This includes non-profits (including churches), all governmental entities, commercial as well as private. In addition, not just real estate but the value of all possessions on the property should be included (after all, a thief is as interested or more in the jewelry and computers that exist under your roof as your property alone). Notice ALL property . . . a church is protected by the police and fire, why should not it pay according to the value of its property. A property with a BMW and a JAG in the garage has more to protect than a similar property with two ten year old compacts in the garage, why should they not pay more? This means that renters would pay a tax on their possessions but not the residence.
3) A major problem that has come up in Indiana deals with property evaluation and reassessment. All property values should be considered at current market value (what an unaffiliated entity would pay for the property). Reassessment should be at the time of the sale (sale amount) or every 5 years. If after 5 years, a revaluation is made, the value upon which the tax should be paid should not increase beyond 10% per year until it reaches the new assessment level. Once again, the public does not argue that its property has gone up in value only that the increase is all at once and offers a dreadful sticker shock.
4) To counter the third concern: where did all the money go? I suggest a cap on the property tax as well as a cap on increased government take (that is, government spending cannot exceed 3% per year with anything over that refunded back to the taxpayers).
Since education has been deleted and the taxable items made more encompassing, it is highly probable that the direct property tax rates (typically 1 to 4% of the residential value) will fall drastically. And in addition, the public should be considerably more amiable to paying for services that can directly connect with the taxes.
Allocation of the monies. The state should institute the tax state wide and deliver the monies to the county. Each county and municipality should then have the option of including a local surtax. The county should be the fiscally responsible agent.
Where does education come in? If Property taxes are not to be used to fund education, then what? The relationship between income and education level is quite conclusive: the better educated one is, the higher one's income. Therefore, a better revenue provider for education should be the income tax . . . of a flat, minimal exemption variety. Education dollars should come through the state coffers via the income tax and flow directly to those eligible . . . students from K through grade 16 That is, each student would receive a voucher for his/her share that could be used for any state approved educational institute in the state . . . public or private. This means that while we are at the process of revising the tax system we might want to review the educational process as well.
What do you think?
Thanks for the opportunity to voice my views.
Saturday, August 25, 2007
Corporationsatrisk
Several recent events convinced me that whomever is running our major corporations are totally clueless in what it takes to perform well in the long term. Some time ago GE sold off its plastics business to an Arab consortium for billions of dollars. I thought it was a good decision: oil is the basis of plastics so the Arabs get to go upstream with their oil and oil money and GE gets to reinvest it in future businesses. What did I find out? Was GE going to spend the money on new products, more R&D, more productive or quality facilities, or acquire a state of the art company? The answer: None of the above. It was going to use the entire multibillion dollar buyout to buy stock and keep its stock price high. It is like a farmer using his seed corn. Absolutely no sense in the long run.
Then just recently I read about Home Depot selling off its wholesale business. I did not know enough about the business to make a decision but it appears it is meant to refocus and concentrate on its core consumer business. The , once again , multibillion dollar sale, I though, would be used to revitalize its stores and personnel. But once again what was its purpose to be: to buy up stock.
Is this what corporate america thinks is the way to conduct business? DOes it mean that no one can find better uses of its money than to buy stock? Does it mean that it is perfectly content with the way business is going? I fear for the future of our country's businesses if they are being run by finance people with no sense of the future past the next quarterly dividend or report to Wall Street.
Wake up guys. The future is not 4Q2007 but 2020. WHere will you be then? At this rate nowhere.
Then just recently I read about Home Depot selling off its wholesale business. I did not know enough about the business to make a decision but it appears it is meant to refocus and concentrate on its core consumer business. The , once again , multibillion dollar sale, I though, would be used to revitalize its stores and personnel. But once again what was its purpose to be: to buy up stock.
Is this what corporate america thinks is the way to conduct business? DOes it mean that no one can find better uses of its money than to buy stock? Does it mean that it is perfectly content with the way business is going? I fear for the future of our country's businesses if they are being run by finance people with no sense of the future past the next quarterly dividend or report to Wall Street.
Wake up guys. The future is not 4Q2007 but 2020. WHere will you be then? At this rate nowhere.
Tuesday, August 21, 2007
SpecEd
Special Education:
A Wall Street Journal headline article spurns this line of thought.
The articles discuss parents disenchantment with special education programs, especially in the regards that the education experience is lacking and many indicate that although their son or daughter received a high school diploma, they did not get the education with it.
Local school systems have major problems with special ed program
1) 14% of all school children are classified as special education, a not negligible number
2) Due to federal mandates, schools must attempt to mainstream these children whenever possible. this is bad policy although good politicxs. The special needs sap energy from the classroom, requiring attention, time, and discipline from the teacher, thus lessening teaching opportunities for the rest of the class.
3) the No child Left Behind requires testing and special ed students count towards the students passing or failing. this is clearly unfair and nonsensical. Most of these students can never reach levels asked of them. They should not be included in the count.
4) Cost is another factor. Typical, federal mandates require school systems to provide whatever necessary for a student's education but not the money. For one special education student in NYC, the city has been paying $400,000 a year for a full time teacher, aide, technology, and transportation. This should be a federal responsibility. But more to the point what is owed to parents? Should it only be that amount average for each student. That is, if the school district pays $10,000 per year on average for each student, that is what the district should contribute.
5) The attention paid to special education is overwhelming that other group, the gifted and talented. $8billion annually is paid in special ed while one tenth that is given towards GnT programs. Shouldnt it be the reverse. The GnT kids are our future leaders, our engineers, our innovators, our great scientists. Shouldnt they be given more opportunity to maximize their abilities? I suggest that should be the case.
Special ed needs special attention and careful review.
A Wall Street Journal headline article spurns this line of thought.
The articles discuss parents disenchantment with special education programs, especially in the regards that the education experience is lacking and many indicate that although their son or daughter received a high school diploma, they did not get the education with it.
Local school systems have major problems with special ed program
1) 14% of all school children are classified as special education, a not negligible number
2) Due to federal mandates, schools must attempt to mainstream these children whenever possible. this is bad policy although good politicxs. The special needs sap energy from the classroom, requiring attention, time, and discipline from the teacher, thus lessening teaching opportunities for the rest of the class.
3) the No child Left Behind requires testing and special ed students count towards the students passing or failing. this is clearly unfair and nonsensical. Most of these students can never reach levels asked of them. They should not be included in the count.
4) Cost is another factor. Typical, federal mandates require school systems to provide whatever necessary for a student's education but not the money. For one special education student in NYC, the city has been paying $400,000 a year for a full time teacher, aide, technology, and transportation. This should be a federal responsibility. But more to the point what is owed to parents? Should it only be that amount average for each student. That is, if the school district pays $10,000 per year on average for each student, that is what the district should contribute.
5) The attention paid to special education is overwhelming that other group, the gifted and talented. $8billion annually is paid in special ed while one tenth that is given towards GnT programs. Shouldnt it be the reverse. The GnT kids are our future leaders, our engineers, our innovators, our great scientists. Shouldnt they be given more opportunity to maximize their abilities? I suggest that should be the case.
Special ed needs special attention and careful review.
Monday, August 13, 2007
Gun Control
Gun control is back in the media again. After the Newark incident, slayings in CT and Virginia Tech, advocates are advocating that if only gun control was in existence, these events would not have happened.
I believe the exact opposite. If as advocates insist, guns were well controlled (even now they are registered and buyers must undergo checks--isnt that coontrol?) then all this would go away. Not really, the criminal element, those responsible for the slaying above would have found the means to gain possession of firearms. It is the honest god-fearing, law abiding citizens that would be made defenseless. The criminal element would then have the upper hand.
Instead, more guns could be the answer. At Virginia Tech, with a campus ban on firearms, the shooter had nothing to fear and plenty of time to do violence until the police forces (campus security was not able to deal with the threat). Instead if arms were available, the shooter might wellhave not ventured in, knowing that some of the students might well have been carrying arms and could have answered quickly. It is called deterrent. But a deterrent is only worthwhile if the opposite side knows you have the will to use it. Stripped of weapons will is meaningless.
Ironically, arms alone are not necessary. The 9/11 hijacker-terrorists used only knives and razors to gain control. They then used the vehicles themselves as weapons. So banning weapons would not have stopped their attack.
I believe the exact opposite. If as advocates insist, guns were well controlled (even now they are registered and buyers must undergo checks--isnt that coontrol?) then all this would go away. Not really, the criminal element, those responsible for the slaying above would have found the means to gain possession of firearms. It is the honest god-fearing, law abiding citizens that would be made defenseless. The criminal element would then have the upper hand.
Instead, more guns could be the answer. At Virginia Tech, with a campus ban on firearms, the shooter had nothing to fear and plenty of time to do violence until the police forces (campus security was not able to deal with the threat). Instead if arms were available, the shooter might wellhave not ventured in, knowing that some of the students might well have been carrying arms and could have answered quickly. It is called deterrent. But a deterrent is only worthwhile if the opposite side knows you have the will to use it. Stripped of weapons will is meaningless.
Ironically, arms alone are not necessary. The 9/11 hijacker-terrorists used only knives and razors to gain control. They then used the vehicles themselves as weapons. So banning weapons would not have stopped their attack.
Wednesday, August 8, 2007
Paying the Piper
On today's news it was reported that CHina is threathening to sell off its huge ($407 billion) US treasury reserves unless the US backs off efforts to stem trade deficits. Duh!! What did people think they were going to do with all that cash? Political blackmall it is called. Just the mention of it sent credit markets and stock markets haywire.
What is the US to do? For one thing, begin weaning itself of Chinese interests. Less imports from China and more exports. Begin a Made in USA campaign. Strictly enforce food, health, safety,labor standards for imported goods. Just because it is made in China does not give it a pass. Lead Paint. Tainted food, etc. We must crack down. Chinese manipulation of their currency should not be acceptable and arm twisting should be made to bring the rate into more acceptable range. Remember, trade is a two way street. If the Chinese wish to wreck havoc in our financial markets, they may start a recession but in doing so will cause a drastic decrease in imports from China, probably causing a similar recession there. If hardball is what they want, give it to them. We are in much better shape than they are. We buy their goods, we can always stop buying shirts and toys.
Punitive tariffs on items whenever possible; increase the delivered cost and demand will go down.
It is great to live on borrowed time or borrowed monies. But sooner or later the piper will come to collect. And that time has come.
What is the US to do? For one thing, begin weaning itself of Chinese interests. Less imports from China and more exports. Begin a Made in USA campaign. Strictly enforce food, health, safety,labor standards for imported goods. Just because it is made in China does not give it a pass. Lead Paint. Tainted food, etc. We must crack down. Chinese manipulation of their currency should not be acceptable and arm twisting should be made to bring the rate into more acceptable range. Remember, trade is a two way street. If the Chinese wish to wreck havoc in our financial markets, they may start a recession but in doing so will cause a drastic decrease in imports from China, probably causing a similar recession there. If hardball is what they want, give it to them. We are in much better shape than they are. We buy their goods, we can always stop buying shirts and toys.
Punitive tariffs on items whenever possible; increase the delivered cost and demand will go down.
It is great to live on borrowed time or borrowed monies. But sooner or later the piper will come to collect. And that time has come.
The Race Card
Afro Americans have been surpassed by Hispanics as the number one minority in our Country. But their poltical power still exists, especially in the field of Affirmative Action. It is true that slavery is a chapter in our country's history that cannot be denied nor should it. THe civil rights struggles of the sixties and the apartheid conditions in the century proceeding also is not a chapter we would want to repeat. But all of that is behind us. We are bascially now a color blind country. But many Afro Americans cannot put the past behind them and get on with life. Everywhere they look they see prejudice. OJ Simpson in the nineties and Michael Vick today. Regardless of if they were guilty, racism is the cause. In my teaching days, I had many Afro-Americans. I always graded according to their work. But give them a poor grade because their paper was lousy, and the race card would come out, "It is because I am black," etc.etc. It is meant to put one on the defensive and it does since in our society, any indication of prejudice can cost one a job, a career, one's life (Just ask Sommers previously from Harvard)
If one were to look objectively, one could say, America is truly not a color blind counry. In fact, with affirmative action policies in existence, Afro-Americans are actually given priority over whites. (ever see "Minority and women especially encouraged to apply" in want ads?)(IAffirmative action is meant to righten the wrongs of the past. But MLK Jr said it right when he encouraged a color blind society not one which lingers on.
For Afro-Americans, barriers to moving up in society is not a matter of racism but a matter of culture. In many Afro-American communities, academic life is considered "white" and not an acceptable means. Rather it is sports, drugs, gangs. Teen pregnancy and out of wedlock children, Welfare and getting as much as possible out of the system seem to be prevalent cultural traits accepted. Until the community culture is changed to encourage marriage, hard work, academic learning, then the cycle will continue. Bill Cosby recognizes this and has spoken repeatedly about it (and for his efforts is called a sell out by the black community). Clarence Thomas who should be considered a role model is called white.
The Democratic party considers the Afro-American community theirs and any black who wonders off the plantation to (gash) become a Republican must be thrown to the wolves as an example for others not to stray. Their comments, vote democratic and we will keep the goodies (welfare, housing, affirmative action) coming. This is not good for the black community to be taken for granted. And beyond their votes, the Democrats have nothing to offer.
Lets go back to the MLK Jr color blind society. No affirmative action. No special favors. Reward based on merit.
Not racism but merit.
No doubt if Obama is either the Presidental or VP candidate for the Democrats next year, and if you dont vote for him, you will be called Racist. The race card, if overused, becomes meaningless.
If one were to look objectively, one could say, America is truly not a color blind counry. In fact, with affirmative action policies in existence, Afro-Americans are actually given priority over whites. (ever see "Minority and women especially encouraged to apply" in want ads?)(IAffirmative action is meant to righten the wrongs of the past. But MLK Jr said it right when he encouraged a color blind society not one which lingers on.
For Afro-Americans, barriers to moving up in society is not a matter of racism but a matter of culture. In many Afro-American communities, academic life is considered "white" and not an acceptable means. Rather it is sports, drugs, gangs. Teen pregnancy and out of wedlock children, Welfare and getting as much as possible out of the system seem to be prevalent cultural traits accepted. Until the community culture is changed to encourage marriage, hard work, academic learning, then the cycle will continue. Bill Cosby recognizes this and has spoken repeatedly about it (and for his efforts is called a sell out by the black community). Clarence Thomas who should be considered a role model is called white.
The Democratic party considers the Afro-American community theirs and any black who wonders off the plantation to (gash) become a Republican must be thrown to the wolves as an example for others not to stray. Their comments, vote democratic and we will keep the goodies (welfare, housing, affirmative action) coming. This is not good for the black community to be taken for granted. And beyond their votes, the Democrats have nothing to offer.
Lets go back to the MLK Jr color blind society. No affirmative action. No special favors. Reward based on merit.
Not racism but merit.
No doubt if Obama is either the Presidental or VP candidate for the Democrats next year, and if you dont vote for him, you will be called Racist. The race card, if overused, becomes meaningless.
Tuesday, August 7, 2007
Rights and Entitlements
What does the rights of "life, liberty and the pursuit of happiness" mean? What do we as an American citizen and a human being in general have the right to?
It appears to me that over the last fifty years the number of rights we presume have increased substantially. the right to do what I want, when I want it, where I want. The emphasis on Individual rights has seemed to skyrocket lately while the right for the greater good, to subsume one's own wishes to that of the community or nation as a whole, has practically disappeared. For example, my favorite, the boom box. A teen or twenty (or nowadays even older) ish driver has his/her boom box up to 140 decibels (it seems anyway) and is ahead, behind, or besides you at a traffic light, drowning out your every thought and providing you with a migraine in seconds. Yet it is his RIGHT to do so if he pleases. No sense of propriety or community. If he wants to do deaf, that is his right just do not include me in his plans. Or those who insist on using profanity and unacceptable language in public places. It is HIS Right to talk as he sees fit. No matter others are around or small children. His rights are violated if you ask him to temper his language (and he is likely to increase the filth in your direction if you do so). I sometimes substitute teach as a favor to my friends when they are sick or wish a day off. Today's students get up the in middle of class to drop something in the wastebasket or to sharpen a pencil. When asked why didnt they wait until the end of class, they look at you as if you were from Mars, "Because I wanted to" they would say.
Whatever happened to couth, public decency, community modes. Is there anything else than ME? Does the world revolve around ME and my interests? To examine public media, it appears not. But does it? Should it? In years past we had a hard wall between public and private. Many things we could do in private we would never even consider in public. But that line is blurred. The world is one now and that one revolves around me. My father is an avid smoker but he is careful not to smoke anywhere around his grandchildren, always outside, and always away from others. But he is old school, considerate to a T. In the modern society, he would be considered passive and outdated.
Shouldn't we take a step back and think what life would be if we were to be more considerate of others, others' spaces, others' feelings, others' concerns. And not just ourselves, our wants, our needs, our demands? Moral codes, decency standards, etiquette. Isnt it about time we start bringing these back? Our culture, or what is left of a decaying code of culture demands it.
Comments
It appears to me that over the last fifty years the number of rights we presume have increased substantially. the right to do what I want, when I want it, where I want. The emphasis on Individual rights has seemed to skyrocket lately while the right for the greater good, to subsume one's own wishes to that of the community or nation as a whole, has practically disappeared. For example, my favorite, the boom box. A teen or twenty (or nowadays even older) ish driver has his/her boom box up to 140 decibels (it seems anyway) and is ahead, behind, or besides you at a traffic light, drowning out your every thought and providing you with a migraine in seconds. Yet it is his RIGHT to do so if he pleases. No sense of propriety or community. If he wants to do deaf, that is his right just do not include me in his plans. Or those who insist on using profanity and unacceptable language in public places. It is HIS Right to talk as he sees fit. No matter others are around or small children. His rights are violated if you ask him to temper his language (and he is likely to increase the filth in your direction if you do so). I sometimes substitute teach as a favor to my friends when they are sick or wish a day off. Today's students get up the in middle of class to drop something in the wastebasket or to sharpen a pencil. When asked why didnt they wait until the end of class, they look at you as if you were from Mars, "Because I wanted to" they would say.
Whatever happened to couth, public decency, community modes. Is there anything else than ME? Does the world revolve around ME and my interests? To examine public media, it appears not. But does it? Should it? In years past we had a hard wall between public and private. Many things we could do in private we would never even consider in public. But that line is blurred. The world is one now and that one revolves around me. My father is an avid smoker but he is careful not to smoke anywhere around his grandchildren, always outside, and always away from others. But he is old school, considerate to a T. In the modern society, he would be considered passive and outdated.
Shouldn't we take a step back and think what life would be if we were to be more considerate of others, others' spaces, others' feelings, others' concerns. And not just ourselves, our wants, our needs, our demands? Moral codes, decency standards, etiquette. Isnt it about time we start bringing these back? Our culture, or what is left of a decaying code of culture demands it.
Comments
What should government do?
In the age of ever expanding government, perhaps we should take a step back and askourselves: what is the purpose of government and what activities should a government be involved in and control? In the beginning, the USA had but four departments: state (foreign affairs), justice, defense (or war), and treasury (money). It seemed fine for over a hundred years. Somewhere in the 20th century, it was decided that government need be involved in education, labor, commerce, transportation, etc, etc. Today there are many that believe the government needs to be FURTHER involved and more controlling. A question I have is if we know government is bloated, spends excessively, has way too many people doing little or nothing, and adds nothing to the economy, why do we want to see it bigger? Beyond debating what services people want, why not address who will provide those services.
For instance, many municipalities have their trash and garbage services provided by private contractors. Besides from the public unions, few notice or care and the service is more than adequate for most if not all citizens. In Indiana we contracted out the administration of welfare and medicare/medicaid to the private sector at a huge gain. Now Contress wants to mandate only public employees provide these services? Does it matter? In the beginning the TSA, that monolith that most flying Americans hate was to be a privately provided entity. But the democrats made it public so it could join the federal unionists. Why? Why not private? And on and on. If a private firm can do the service, why not? Almost without exception it ends up more efficient, responsive, and saves taxpayers in the end.
In Indiana, we leased the toll road for $4Billion to a private consortium. Many balked at gibing away state property(which as a lease it was not). Many wondered why should we the public give profits to someone else (at the time the tollroad was a losing proposition and no one knew how much it was losing it was so poorly run). Is there any law that says a government property or service must be government run forever? The post office is a splendid ezample of an entity that could well be privatized without any lost of service. It is not a matter of possibility but of political will.
My position is quite simple: privatize anything you can. The Governor of Indiana proposed three new tollways inIndiana which were to be built and maintained by private entities thus providing additional transportation options to Indiana citizens without a dollar of tax money. You would have thought he was selling state secrets. Privatize. Why is federal government in education at all? Isnt it a state and local function? Eliminate the department and the tens of billions of dollars it spends a year. Ask yourself do we need this service? If we do, can't it be privatized? Even national security and DOD use contractors for everything from kitchens to stores. Why not. Concentrate your efforts on your key functions and let others do the more mundane non-essential activities. That is the key in Private industry (I once worked for a high tech firm who specialized in minicomputers but were building their own printers at great cost and effort; I recommended getting out of the printer business and letting printer companies supply them to us; they did and not only did we end up with more modern, cheaper, more sophisciated printers but our capital was available to be put to use in our core business--the same can apply to government services).
Privatize when you can. Wholesale if you can. Eliminate those services government has no need being in. Use pricing mechanisms to price those services to make those using them pay appropriately for them.
Comments?
For instance, many municipalities have their trash and garbage services provided by private contractors. Besides from the public unions, few notice or care and the service is more than adequate for most if not all citizens. In Indiana we contracted out the administration of welfare and medicare/medicaid to the private sector at a huge gain. Now Contress wants to mandate only public employees provide these services? Does it matter? In the beginning the TSA, that monolith that most flying Americans hate was to be a privately provided entity. But the democrats made it public so it could join the federal unionists. Why? Why not private? And on and on. If a private firm can do the service, why not? Almost without exception it ends up more efficient, responsive, and saves taxpayers in the end.
In Indiana, we leased the toll road for $4Billion to a private consortium. Many balked at gibing away state property(which as a lease it was not). Many wondered why should we the public give profits to someone else (at the time the tollroad was a losing proposition and no one knew how much it was losing it was so poorly run). Is there any law that says a government property or service must be government run forever? The post office is a splendid ezample of an entity that could well be privatized without any lost of service. It is not a matter of possibility but of political will.
My position is quite simple: privatize anything you can. The Governor of Indiana proposed three new tollways inIndiana which were to be built and maintained by private entities thus providing additional transportation options to Indiana citizens without a dollar of tax money. You would have thought he was selling state secrets. Privatize. Why is federal government in education at all? Isnt it a state and local function? Eliminate the department and the tens of billions of dollars it spends a year. Ask yourself do we need this service? If we do, can't it be privatized? Even national security and DOD use contractors for everything from kitchens to stores. Why not. Concentrate your efforts on your key functions and let others do the more mundane non-essential activities. That is the key in Private industry (I once worked for a high tech firm who specialized in minicomputers but were building their own printers at great cost and effort; I recommended getting out of the printer business and letting printer companies supply them to us; they did and not only did we end up with more modern, cheaper, more sophisciated printers but our capital was available to be put to use in our core business--the same can apply to government services).
Privatize when you can. Wholesale if you can. Eliminate those services government has no need being in. Use pricing mechanisms to price those services to make those using them pay appropriately for them.
Comments?
Where have all the Boys Gone?
Where have all the boys gone?
The sixties was a time of minority rebellion and new-found freedoms—not just racially but gender wise as well as women were encouraged to seek education and career opportunities to establish equality with men (the great increase in college enrollment during the sixties was as much due to female enrollment as it was to the baby boomers). And with this came new federal and state regulations that provided set asides (EEO) for these minorities (notice that being female is considered a minority according to the law even though females outnumber males). Title VII in athletics is just one example where major schools must have as many sports and female athletes as they have male sports and athletes even though in most cases fewer females wish to be involved in athletics at the college level.
The number of women enrolled in undergraduate classes outnumber men on campus by over 2 million (men make up only 42% of US college students) and on some campuses the proportion of female students exceeds 60%. Men, whatever their racial, ethnic, or socioeconomic group are less likely than their female counterparts to graduate with a college degree, and among those that do, fewer complete their degrees in less than five years. Women now earn the majority of diplomas in fields men used to dominate—science and business and now match men in professional degrees (law, medicine) up from 22% a generation ago. Women now earn over half of all business degrees, up from one-third in 1980. Women in most campuses are walking away with a disproportionate share of honors degrees.
It appears to my lowly eye that women have not just reached equilibrium with males at the collegiate and post-graduate level but have in many cases have far surpassed them. So much so that one critic indicates, “one has to be concerned about what is happening to men.” Men are not enrolling or completing college programs with the same urgency as women. Already, Afro-American and Hispanic female college graduates are finding it difficult to find similar college educated men to date and marry of their own background. It has reached crisis proportions. Will it become similar for all women? The trends, alarming as they are, say inevitably yes.
For several years, I have attended and presented at a local Middle School award program. After three years, a pattern has emerged. In Sixth grade , 4 out of top 10 are boys, by seventh grade it is down to 2, and by 8th grade only one boy was in the top ten. Need more proof? Look at high school valedictorians and salutatatorians, the far majority are females. Check out the proportions in top ten of any high school class and in very few will you find proportions lower than 2:1 female to male.
What to do about all this? First, it appears that any legal advantages provided to women (note the notorious: “Women and minorities especially encouraged to apply” often seen in job advertisements) should be dismantled. Feminists will decry this but the facts speak for themselves . . . being over-represented on campuses they do not need to be further encouraged with favoritism. (In June, Indiana University hosted a group of young women as it launches a new program designed to encourage careers in business. About 30 students from around the country will participate in the Young Women's Institute—perhaps a young men’s institute is needed as well!!) Secondly, research needs to be performed immediately to understand better what has happened to the young males. Perhaps the female-oriented school system culture (sit and be still, speak only when spoken to, etc) needs to be adapted to the different learning styles and energy levels of the young males? Regardless, the trends indicate clearly that more time and attention should be given to young males to succeed academically. Third, multitudes of feminist and women’s studies programs exist in colleges throughout the land, isn’t it about time for an equal number of “Male Studies” Programs be made available to young men?
Where have all the boys gone? It is about time we found out.
The sixties was a time of minority rebellion and new-found freedoms—not just racially but gender wise as well as women were encouraged to seek education and career opportunities to establish equality with men (the great increase in college enrollment during the sixties was as much due to female enrollment as it was to the baby boomers). And with this came new federal and state regulations that provided set asides (EEO) for these minorities (notice that being female is considered a minority according to the law even though females outnumber males). Title VII in athletics is just one example where major schools must have as many sports and female athletes as they have male sports and athletes even though in most cases fewer females wish to be involved in athletics at the college level.
The number of women enrolled in undergraduate classes outnumber men on campus by over 2 million (men make up only 42% of US college students) and on some campuses the proportion of female students exceeds 60%. Men, whatever their racial, ethnic, or socioeconomic group are less likely than their female counterparts to graduate with a college degree, and among those that do, fewer complete their degrees in less than five years. Women now earn the majority of diplomas in fields men used to dominate—science and business and now match men in professional degrees (law, medicine) up from 22% a generation ago. Women now earn over half of all business degrees, up from one-third in 1980. Women in most campuses are walking away with a disproportionate share of honors degrees.
It appears to my lowly eye that women have not just reached equilibrium with males at the collegiate and post-graduate level but have in many cases have far surpassed them. So much so that one critic indicates, “one has to be concerned about what is happening to men.” Men are not enrolling or completing college programs with the same urgency as women. Already, Afro-American and Hispanic female college graduates are finding it difficult to find similar college educated men to date and marry of their own background. It has reached crisis proportions. Will it become similar for all women? The trends, alarming as they are, say inevitably yes.
For several years, I have attended and presented at a local Middle School award program. After three years, a pattern has emerged. In Sixth grade , 4 out of top 10 are boys, by seventh grade it is down to 2, and by 8th grade only one boy was in the top ten. Need more proof? Look at high school valedictorians and salutatatorians, the far majority are females. Check out the proportions in top ten of any high school class and in very few will you find proportions lower than 2:1 female to male.
What to do about all this? First, it appears that any legal advantages provided to women (note the notorious: “Women and minorities especially encouraged to apply” often seen in job advertisements) should be dismantled. Feminists will decry this but the facts speak for themselves . . . being over-represented on campuses they do not need to be further encouraged with favoritism. (In June, Indiana University hosted a group of young women as it launches a new program designed to encourage careers in business. About 30 students from around the country will participate in the Young Women's Institute—perhaps a young men’s institute is needed as well!!) Secondly, research needs to be performed immediately to understand better what has happened to the young males. Perhaps the female-oriented school system culture (sit and be still, speak only when spoken to, etc) needs to be adapted to the different learning styles and energy levels of the young males? Regardless, the trends indicate clearly that more time and attention should be given to young males to succeed academically. Third, multitudes of feminist and women’s studies programs exist in colleges throughout the land, isn’t it about time for an equal number of “Male Studies” Programs be made available to young men?
Where have all the boys gone? It is about time we found out.
Sunday, August 5, 2007
Reorganizing Government II
What about at the top? Should we make changes at the top?
The President. How many years should a president serve? Two terms? Three? Should there be a limit? What about a single term of six years? Would a single term mean being a lame duck from day one? What if we were to increase to six years and eliminate term limits? Then, the constant unknown would keep all parties guessing.
What about Congress? Term limits would not necessarily be bad for Senators and Representatives. It is up or out. As it is now, representatives have constantly fight for reelection, seeking money and support and as a result having little time for legislation. What about increasing a term to four years and limiting time in the house to three terms (alternating terms even half for one and the odd half for the other). As for senators, six years is fine but a limitation to 3 terms and out. Senators used to be elected by state legislatures. Why not return to the same? That would allow the state to influence more directly the priorities of its senators.
Another problem in our government is full time legislators. Perhaps we should return to a citizen legislator--that is making the legislators have a full time separate job and minimize the amount of time they spend in congress. I suggest no more than 2 months. In the age of the internet, communications can be done electronically. By forcing congresspersons to live and work among us, their constitutents, they will hopefully be more grounded and stay local instead of becoming part of the beltway potomac problem.
Use the internet, e-voting should be considered. National referendums expressing views of the public should be done. In this mode, simple statements should be voted upon and their content known to the legislators. Any vote that shows significantly one side or another (60-65%) should be heavily considered in the final vote.
Thoughts?
The President. How many years should a president serve? Two terms? Three? Should there be a limit? What about a single term of six years? Would a single term mean being a lame duck from day one? What if we were to increase to six years and eliminate term limits? Then, the constant unknown would keep all parties guessing.
What about Congress? Term limits would not necessarily be bad for Senators and Representatives. It is up or out. As it is now, representatives have constantly fight for reelection, seeking money and support and as a result having little time for legislation. What about increasing a term to four years and limiting time in the house to three terms (alternating terms even half for one and the odd half for the other). As for senators, six years is fine but a limitation to 3 terms and out. Senators used to be elected by state legislatures. Why not return to the same? That would allow the state to influence more directly the priorities of its senators.
Another problem in our government is full time legislators. Perhaps we should return to a citizen legislator--that is making the legislators have a full time separate job and minimize the amount of time they spend in congress. I suggest no more than 2 months. In the age of the internet, communications can be done electronically. By forcing congresspersons to live and work among us, their constitutents, they will hopefully be more grounded and stay local instead of becoming part of the beltway potomac problem.
Use the internet, e-voting should be considered. National referendums expressing views of the public should be done. In this mode, simple statements should be voted upon and their content known to the legislators. Any vote that shows significantly one side or another (60-65%) should be heavily considered in the final vote.
Thoughts?
Reorganizing Government
Does Government work? Any entity that is constantly overbuddget, underefficient, bloated, and believes getting a job done
at twice or three times the budget, twice to three times the manpower needed, at twice to three times the usual timeframe would not last long in the private market but somehow we not only accept the entity but many wish to enlarge the entity (being somehow bloated is insufficent, being bloated at twice the size and responsiblities must be better).
Perhaps there are too many layers of government. In Indiana we have ten to twelve townships per county, 94 counties to the state level, hundreds of municipalities. Why do we need all the levels and the numbers? Why townships at all? Originally the size of counties were made so every citizen could ride his/her buggy to the county seat within the space of a day. That need is long gone. Why not abolish townships? Why not consolidate counties into much fewer (say 4 into one). Minimize governmental levels.
Which brings us to another notion. Why 50 staes? What is the role of a state? Other countries have provinces, England has shires. How many is necessary? Should New England have 6 states or should it be considered a single entity? How many similar consolidations can be made? Some should remain states, that are geographic limitations (Hawaii, Alaska). But for the continental 48, these can be cut in half or more. Perhaps our goal should be to consolidate into 20 geographically contiguous areas.
Why not? What is so sacred about a state? With the advent of the internet, most purposes of state government can be accomplished by the net and so the need to go to a state capital should be minimal to zero.
Advantages:
Think of the 1.resources wasted, cost better used country wide; trained personnel cost, including retirement, health etc.; 3. personnel talent lost; 5. physical facilities cost and maintenance. 4 conflictant laws within the country, licensing etc. etc 5 Etc,etc Forever!! A much smaller number, with limited power would be easier to administer.
at twice or three times the budget, twice to three times the manpower needed, at twice to three times the usual timeframe would not last long in the private market but somehow we not only accept the entity but many wish to enlarge the entity (being somehow bloated is insufficent, being bloated at twice the size and responsiblities must be better).
Perhaps there are too many layers of government. In Indiana we have ten to twelve townships per county, 94 counties to the state level, hundreds of municipalities. Why do we need all the levels and the numbers? Why townships at all? Originally the size of counties were made so every citizen could ride his/her buggy to the county seat within the space of a day. That need is long gone. Why not abolish townships? Why not consolidate counties into much fewer (say 4 into one). Minimize governmental levels.
Which brings us to another notion. Why 50 staes? What is the role of a state? Other countries have provinces, England has shires. How many is necessary? Should New England have 6 states or should it be considered a single entity? How many similar consolidations can be made? Some should remain states, that are geographic limitations (Hawaii, Alaska). But for the continental 48, these can be cut in half or more. Perhaps our goal should be to consolidate into 20 geographically contiguous areas.
Why not? What is so sacred about a state? With the advent of the internet, most purposes of state government can be accomplished by the net and so the need to go to a state capital should be minimal to zero.
Advantages:
Think of the 1.resources wasted, cost better used country wide; trained personnel cost, including retirement, health etc.; 3. personnel talent lost; 5. physical facilities cost and maintenance. 4 conflictant laws within the country, licensing etc. etc 5 Etc,etc Forever!! A much smaller number, with limited power would be easier to administer.
Wednesday, August 1, 2007
Tobacco
America has a fixation about tobacco. We dont know if we love it, hate it, tolerate it, or wish to see it annihilated.
Smoke Free zones have become the latest passion. It appears some want to eliminate smoking altogether. But on the other hand, it is a major revenue generator for state and federal governments. The federalistas liberals want to ban outright smoking because it is bad for you yet many continue to smoke despite all efforts. As is prevalent in the liberal mantra, we know what is best for you and if you wont change then we will legislate your behavior. Yet such as alcohol, obesity, etc, it is a choice we make. No one can honesty claim that they do not know the dangers in smoking. Therefore it is a choice smokers are endulging in. Already we are creating a nation of tobacco sneakers. Like high schoolers smoking in the bathrooms knowing it was illegal but wishing to do so anyway, smokers must continually find that hidden place they can go.
The policy decision is to either abolish it or tax it at a maximizing revenue level? The liberals wish to do the former and by doing so will only create a new prohibition with tobacco the new forbidden fruit. We do not want that. The better solution: is to live and let live. To maximize revenues and raise taxes to that level. The other part is to allow smoking in establishments that wish to have all smoking facilities.
Smoke Free zones have become the latest passion. It appears some want to eliminate smoking altogether. But on the other hand, it is a major revenue generator for state and federal governments. The federalistas liberals want to ban outright smoking because it is bad for you yet many continue to smoke despite all efforts. As is prevalent in the liberal mantra, we know what is best for you and if you wont change then we will legislate your behavior. Yet such as alcohol, obesity, etc, it is a choice we make. No one can honesty claim that they do not know the dangers in smoking. Therefore it is a choice smokers are endulging in. Already we are creating a nation of tobacco sneakers. Like high schoolers smoking in the bathrooms knowing it was illegal but wishing to do so anyway, smokers must continually find that hidden place they can go.
The policy decision is to either abolish it or tax it at a maximizing revenue level? The liberals wish to do the former and by doing so will only create a new prohibition with tobacco the new forbidden fruit. We do not want that. The better solution: is to live and let live. To maximize revenues and raise taxes to that level. The other part is to allow smoking in establishments that wish to have all smoking facilities.
FragilityofCivilization
How secure is civilization. Historically, countless cultures have risen to dominance over their small or sometimes not for small region. ANd many have just as suddenly disappeared. Why? What is different about our culture and civilization?
One of my favorite stories is Lord of the Flies. A group of young British boys from upper class families and an elite school is stranded on an isolated island through air crash landing. Within days they revert back to primitive life, rule of fear, killing severalof their peers without remorse. Think about blizzards, hurricanes, blackouts. The resulting lines and fights in grocery stores as foodstuffs are bought out. Or the riots and mobs and looting that occurs when authority breaks down. It does not take much . . . just the threat of a mild disruption.
The more advanced a culture gets, the more fragile the lifeline gets, the easier it is to destroy. Think of the sieges of ancient towns . . . six months, a year . . . Troy for ten years. How long would one of our large cities last? Two days? Daily shipments of necessities from outside would be cut off. Little inventory exists for the multitudes of people. Fights and authority breakdowns would quickly result. Like a JIT system when disrupted, the plant shuts down quickly. Any breakdown that disrupts the system for more than a week would cause major catastrophe.
We do not have to worry about destruction from the outside? We will do it to ourselves when shut off from the rest of the world.
One of my favorite stories is Lord of the Flies. A group of young British boys from upper class families and an elite school is stranded on an isolated island through air crash landing. Within days they revert back to primitive life, rule of fear, killing severalof their peers without remorse. Think about blizzards, hurricanes, blackouts. The resulting lines and fights in grocery stores as foodstuffs are bought out. Or the riots and mobs and looting that occurs when authority breaks down. It does not take much . . . just the threat of a mild disruption.
The more advanced a culture gets, the more fragile the lifeline gets, the easier it is to destroy. Think of the sieges of ancient towns . . . six months, a year . . . Troy for ten years. How long would one of our large cities last? Two days? Daily shipments of necessities from outside would be cut off. Little inventory exists for the multitudes of people. Fights and authority breakdowns would quickly result. Like a JIT system when disrupted, the plant shuts down quickly. Any breakdown that disrupts the system for more than a week would cause major catastrophe.
We do not have to worry about destruction from the outside? We will do it to ourselves when shut off from the rest of the world.
InfrastructureProblems
Although not in the same class of crisis as is Healthcare and Education, America's infrastructure needs addressing. Fifty years ago with the construction of a coast-to-coast national interstate system, we could boast the best in the world. No longer. Not fully maintained for decades, a crisis is brewing. Even of more concern is the forecast that the number of semi trucks travelling our road network will double if not triple by 2020. Can you imagine what the system will look like in 2020 if the status quo remains? Clogged highways and intense congestion will not assist our efforts to become energy independent. Our airways are becoming just as congested with longer trips, more delays, congested airports, etc.
Some transportation rules of thumbs: rail is more efficient for a transport trip of more than 400 miles; on the other hand, truck can be served better for short hauls. As concerns passengers, if done right, rail transport is more efficient for short haul (300-400 mile) than air. These are starting points that should be taken into account when an overall policy is formulated.
My thoughts:
1) Although not politically tangible currently, an increase in the gas tax of 10-20 cents or more should be implemented. This can be phased in gradually : an immediate 10 cents followed by 5 cents a year for the next two and then 2 cents each year thereafter. These monies (estimated at $1 billion per cent taxed) are necessary to restore the infrastructure.
2) A massive highway construction/reconstruction project should commence immediately with the new monies. The purpose is to expand the interstate system so each interstate highway is at least 3 lanes if not 4 lanes outside of cities and within cities at least 4 lanes. A designated truck lane or lanes with a similarly designated passenger car lane(s) will create more space to allow the two parties to live side by side and minimize the increasing numbers of semi-car crashes. The addition to the capacity will minmimize congestion and assist in fuel policies. The new construction will assist with employment. One requirement is all materials and all labor must be American in origin and american citizens.
3) Airports should be encouraged to satisfy long hauls only. that is, a combination rail-air program should be created. For example, for chicago, rail spokes should go from chicago to Milwaukee, South Bend, Springfield, Dubuque, Madision, etc, all cities within 200 miles. These spokes should be fast, convenient, clean service from dedicated lines. Similarly, Atlanta spokes should go to Birmingham, Savannah, Columbia, Huntsville, Chattanooga, etc. The effect would be to alleviate congestion in the airways and on the ground in airports by concentrating on longer hauls and allow more efficient ground transportation. Part of the new gas tax (2 cents the first year, 1 cent thereafter) would be used for construction and maintenance of these interurban short range spoke systems.
4) A radical idea. America has thousands of trucking companies. Each trucking company does not own its own highway and prohibits others to run on it. Why not nationalize (or privatize) the rail lines and have a separate private firm manage the entire rail system, maintain all, expand as necessary, and control usage much like FAA. The railroads would act as trucking companies and could deliver train service all over the US as necessary while the rail system itself would become a highway system open to all users. The effect could well become allowing new entry of rail companies. Double if not triple and quadruple tracks would be used to expand capacity to encourage rail traffic for long hauls.
5) Ports. These are also becoming bottlenecks with the immense one sided trade imports from China blocking the West coast ports. Ports should priority to American exports with imports waiting until all exported items have been shipped. Any containers that remain in the US after 90 days will be considered abandoned and will be confiscated for public use, or melted down for scrap, or made available for export purposes for a heavy discount. All imported containers and goods will be thoroughly scanned and examined for illicit or dangerous materials.
Your thoughts or comments?
Some transportation rules of thumbs: rail is more efficient for a transport trip of more than 400 miles; on the other hand, truck can be served better for short hauls. As concerns passengers, if done right, rail transport is more efficient for short haul (300-400 mile) than air. These are starting points that should be taken into account when an overall policy is formulated.
My thoughts:
1) Although not politically tangible currently, an increase in the gas tax of 10-20 cents or more should be implemented. This can be phased in gradually : an immediate 10 cents followed by 5 cents a year for the next two and then 2 cents each year thereafter. These monies (estimated at $1 billion per cent taxed) are necessary to restore the infrastructure.
2) A massive highway construction/reconstruction project should commence immediately with the new monies. The purpose is to expand the interstate system so each interstate highway is at least 3 lanes if not 4 lanes outside of cities and within cities at least 4 lanes. A designated truck lane or lanes with a similarly designated passenger car lane(s) will create more space to allow the two parties to live side by side and minimize the increasing numbers of semi-car crashes. The addition to the capacity will minmimize congestion and assist in fuel policies. The new construction will assist with employment. One requirement is all materials and all labor must be American in origin and american citizens.
3) Airports should be encouraged to satisfy long hauls only. that is, a combination rail-air program should be created. For example, for chicago, rail spokes should go from chicago to Milwaukee, South Bend, Springfield, Dubuque, Madision, etc, all cities within 200 miles. These spokes should be fast, convenient, clean service from dedicated lines. Similarly, Atlanta spokes should go to Birmingham, Savannah, Columbia, Huntsville, Chattanooga, etc. The effect would be to alleviate congestion in the airways and on the ground in airports by concentrating on longer hauls and allow more efficient ground transportation. Part of the new gas tax (2 cents the first year, 1 cent thereafter) would be used for construction and maintenance of these interurban short range spoke systems.
4) A radical idea. America has thousands of trucking companies. Each trucking company does not own its own highway and prohibits others to run on it. Why not nationalize (or privatize) the rail lines and have a separate private firm manage the entire rail system, maintain all, expand as necessary, and control usage much like FAA. The railroads would act as trucking companies and could deliver train service all over the US as necessary while the rail system itself would become a highway system open to all users. The effect could well become allowing new entry of rail companies. Double if not triple and quadruple tracks would be used to expand capacity to encourage rail traffic for long hauls.
5) Ports. These are also becoming bottlenecks with the immense one sided trade imports from China blocking the West coast ports. Ports should priority to American exports with imports waiting until all exported items have been shipped. Any containers that remain in the US after 90 days will be considered abandoned and will be confiscated for public use, or melted down for scrap, or made available for export purposes for a heavy discount. All imported containers and goods will be thoroughly scanned and examined for illicit or dangerous materials.
Your thoughts or comments?
Thursday, July 26, 2007
The Middle Class and Offshoring
Re: Into thin Air, Fast Company, April 2004
America’ Middle Class has traditionally been composed of higher paying manufacturing (blue Collar) workers, white collar (service) workers, and professionals. Manufacturing is rapidly exiting the Country and as the article so explicitly describes, so are service jobs and eventually many professional jobs as well. Those who have lost their jobs are finding their future downwardly mobile as they find positions paying half or less their previous employment; record bankruptcies and foreclosures tell their story of survival on a day-to-day basis. Those who still have their jobs find unrelenting downward pressures on both wages and benefits. The net result in the not-so-distant future is the disappearance of the American Middle Class. The extinction of this class that has been the glue of the American social fabric for over two centuries does not bode well for this country. The effect of globalization and multinationals with no country loyalty (IBM can no longer be considered an American firm but a global one who seeks global advantages no matter what cost to any nation state) is the lowering of global wages to the least common denominator (As India will soon learn to its amazement when ‘higher-paying’ Indian jobs start moving to Filipinos and Indonesians who will work for half to third). As for globalization, beware of what you asked for, you just might get it, and we did!
Paul Herbig
Angola, Indiana
Re: Into thin Air, Fast Company, April 2004
I wept as I read the personal stories of those who have lost their jobs to offshoring. What a waste of human resources. We tell our youth “Get a college Education in a good field and you will get a great job”. They do and the result is throw-away workers, discarded and forgotten. No safety net exists for them and as they exhaust their savings and retirement funds, they scurry around looking for work, any work. Economists and global trade proponents say they need to be retrained and educated further. But these disposable workers said, almost to the person and correctly so, “In What? What should I train for that will still be here when I graduate?” And we do not have an answer for them.. What should they do? Be a retail clerk at Walmart without benefits? An health care nursing assistant making minimum wage? So goes the Baby Boomers, the most educated generation in the world, little good it did them.
Paul Herbig
Angola, Indiana
Re: Into thin Air, Fast Company, April 2004
The Information Technology (IT) industry in the U.S. has begun an inevitable death spiral. Offshoring and high unemployment in the field has caused wages to drop dramatically. They will continue until an equilibrium with overseas counterparts has been reached (probably in low 40s). The best and brightest of our youth will see this tumble and correctly calculate the industry holds no future for them and they will go elsewhere (The number of Computer Science majors have fallen annually over the last 3 years and will continue to drop). One day the multinationals will look around and comment with delayed justification, “See. We can’t find enough good IT workers. Not enough American students are entering this field so we have no choice but to bring in foreign workers and offshore these jobs.”. And so the vicious circle has claimed yet another American industry.
America’ Middle Class has traditionally been composed of higher paying manufacturing (blue Collar) workers, white collar (service) workers, and professionals. Manufacturing is rapidly exiting the Country and as the article so explicitly describes, so are service jobs and eventually many professional jobs as well. Those who have lost their jobs are finding their future downwardly mobile as they find positions paying half or less their previous employment; record bankruptcies and foreclosures tell their story of survival on a day-to-day basis. Those who still have their jobs find unrelenting downward pressures on both wages and benefits. The net result in the not-so-distant future is the disappearance of the American Middle Class. The extinction of this class that has been the glue of the American social fabric for over two centuries does not bode well for this country. The effect of globalization and multinationals with no country loyalty (IBM can no longer be considered an American firm but a global one who seeks global advantages no matter what cost to any nation state) is the lowering of global wages to the least common denominator (As India will soon learn to its amazement when ‘higher-paying’ Indian jobs start moving to Filipinos and Indonesians who will work for half to third). As for globalization, beware of what you asked for, you just might get it, and we did!
Paul Herbig
Angola, Indiana
Re: Into thin Air, Fast Company, April 2004
I wept as I read the personal stories of those who have lost their jobs to offshoring. What a waste of human resources. We tell our youth “Get a college Education in a good field and you will get a great job”. They do and the result is throw-away workers, discarded and forgotten. No safety net exists for them and as they exhaust their savings and retirement funds, they scurry around looking for work, any work. Economists and global trade proponents say they need to be retrained and educated further. But these disposable workers said, almost to the person and correctly so, “In What? What should I train for that will still be here when I graduate?” And we do not have an answer for them.. What should they do? Be a retail clerk at Walmart without benefits? An health care nursing assistant making minimum wage? So goes the Baby Boomers, the most educated generation in the world, little good it did them.
Paul Herbig
Angola, Indiana
Re: Into thin Air, Fast Company, April 2004
The Information Technology (IT) industry in the U.S. has begun an inevitable death spiral. Offshoring and high unemployment in the field has caused wages to drop dramatically. They will continue until an equilibrium with overseas counterparts has been reached (probably in low 40s). The best and brightest of our youth will see this tumble and correctly calculate the industry holds no future for them and they will go elsewhere (The number of Computer Science majors have fallen annually over the last 3 years and will continue to drop). One day the multinationals will look around and comment with delayed justification, “See. We can’t find enough good IT workers. Not enough American students are entering this field so we have no choice but to bring in foreign workers and offshore these jobs.”. And so the vicious circle has claimed yet another American industry.
Big Boxes
One more time: Walmart:
Does not create vast amounts of new jobs, they merely replace well paying small business jobs with low paying no benefit retail jobs.
Big Boxes does nothing to preserve or add to the image or flavor of a small town, in fact it destroys retail centers, downtowns, and any resemblence of ambivance.
Productivity is a result of paying its people low wages and forcing suppliers to provide ever lower cost goods by offshoring all production. Any low prices are paid for by American jobs and thousands of impoverished vendors
Is not a good community resource, avoiding any civic responsibility it can, and leaving in its wake additional crime activity and insecurity
Does not create vast amounts of new jobs, they merely replace well paying small business jobs with low paying no benefit retail jobs.
Big Boxes does nothing to preserve or add to the image or flavor of a small town, in fact it destroys retail centers, downtowns, and any resemblence of ambivance.
Productivity is a result of paying its people low wages and forcing suppliers to provide ever lower cost goods by offshoring all production. Any low prices are paid for by American jobs and thousands of impoverished vendors
Is not a good community resource, avoiding any civic responsibility it can, and leaving in its wake additional crime activity and insecurity
The Walmartization of America
Walmartiztion of America Part II
By Paul Herbig
.
Robert Reich’s editorial column on the future of work in America in the Friday, December 26, 2003 Wall Street Journal indicated the economic trends were evolving to a two class system: professionals and “personal service workers.” I would rename with two classes: the Haves and the Have-littles. Conspicuously absent is the Middle Class. Traditionally, the middle class contained higher paying union or skilled blue collar jobs (going to China), professionals (accountants, administrative, information technology—going to India), or small business owners (being squeezed out by Walmart and other retail conglomerates). The events Reich describes (and which indeed are occurring even as I write this) and the economic trends that appear to be in process, predict the end of the American Middle Class as we know it.
The Have-littles, those in the personal services (e.g.,retail, hotel/restaurant, other personal services), earning little more than minimum wage (as more and more fall into this category, the over-supply of workers will reduce wages for all) can not possibly hope to ever escape poverty status; even with two full-time breadwinners, they will still not eek out an acceptable living. If this sounds uncomfortably like the economic curve in lesser developed countries (a small upper class with most of the resources, a vast lower class with little of the resources, and a small, almost nonexistent middle class), that is indeed the end result.
As one reader replied, confirming this bleak future is already upon us: “My wife has worked at our local Wal-Mart for a few years and doesn't see much future for those who are working there. The associates who work the floor are paid a tad over minimum wage, have no benefits unless they purchase them, have one paid holiday per year, work an average of 34 to 36 hours per week. Not exactly the kind of job to raise a family on, or supplement one's retirement.” And the future will only have more such workers and families.
A Forrester Research study estimated that over the next 15 years some 3.3 million U.S. service sector jobs would be sent abroad. Economists at U.C. Berkeley say as many as 14 million programming, accounting, paralegal and other service jobs are at risk of being offshored. (Goldman Sachs & Co. says an estimated 200,000 IT-related service jobs have left the United States in the last three years.). Perot, in 1992, may have been right about the his famous job loss statement, just a decade premature and turning to the right (India, China) instead of straight South.
I believe this tremendous growth of offshoring is the result of convergence of several factors:
1) A labor market (high unemployment) that provides companies with upper hand in almost any personnel related activity. How else can you account for the passiveness in which employees knowingly and willingly train Indians as their replacement. If this were 1999 or before, those same employees in this same scenario would have given their employers the Bronx cheer on their way out the door and not humiliated themselves. The ultimate end to all this is wages for developed countries to converge with those from the developing countries: i.e., it will stop when our programmers are paid the same as those from India. A generally considerable lessening of the quality of life will be the inevitable result for all developing countries, but particularly noticeable for the U.S. .
2) Wal-mart’s rise to dominance, its obsession on costs, and its controlling behavior upon is suppliers, is forcing those suppliers to offshore to meet the prices Walmart allows them to charge. The automotive companies are also beginning to exhibit this behavior. A total focus on costs to the exclusion of relationships or any other long term conditions can only brew bad (I never have trusted beancounters to have long term interests in mind).. Those jobs that the employees at Wal-Mart did and the pay of the employees once provided middle class wages but with Wal-Mart in town the pay of these people drops to near poverty level in wages. And this isn’t just within the Wal-Mart store it also happens in Wal-Mart’s competitors that have to compete with Wal-Mart. We are spiraling towards the lowest common denominator. Wal-Mart, makes no apologies for its role in the spiralling down of employee wages and benefits. Wal-Mart, obviously, has de-emphasized the popular "Made in America" campaign that founder Sam Walton launched in the 1980s (and it was not coincidental that only after Sam’s death that the global corporate philosophy now seen presented itself—Sam would be turning in his grave if he saw what was being done now by the company that bears his name.)
This obsession on costs has spread to other American corporations. Electronic Data Systems Corp., founded by Ross Perot but no longer run by that noisy patriot, now recruits $1.25-an-hour tech workers in India and sheds their $10-an-hour counterparts in EDS's home state of Texas. Wall Street brokerages including Morgan Stanley and J. P. Morgan Chase & Co. are shifting from New York to India the ground-floor stock-research. Both India and China are already well-known to recruiters from Intel Corp. and Microsoft Corp. Carrier Corp. will relocate production to Asia from Syracuse, N.Y. No inducement or threat could now save Syracuse's 1,200 Carrier jobs, a company spokesperson said, "unless they are going to pick up New York State and move it."
3) Global marketplace and trading allows total international competition. Now with the internet, you can compare suppliers from all around the globe instantaneously. Now the Indians and Chinese can be given equal attention and low-cost takes on an international dimension. One major concern here is national security. As we lose our manufacturing to China and technology skills to India, our dependence on these nations become ever more critical. What happens in a time of national crisis or war? Will we still have enough manufacturing capability and professional skills nationally to fall back on? Is it only me or do others see an analogy of our giving India software expertise to that of selling scrap iron to Japan during the 30s?
The Wal-Mart economy knows the price of everything and the value of nothing - certainly not of a well cared-for workforce, or of a full-employment economy, or of competitive marketplaces that have not yet succumbed to the predations of a single omnipotent enterprise. And who's to blame for that? The consumer: you and I. At Wal-Mart, the customer is king, everyone else be damned: competitors, employers and even the domestic manufacturing base..
One suggested solution to the Walmartization of America dilemma is wage insurance as a possible prescription for those displaced by globalization. This takes care of providing a living wage but it does nothing to provide jobs or the self-respect that goes with them. Andy Grove, the corporate conscience and former CEO of Intel, has taken up the cause, warning that something drastic must be done to prevent the bulk of new information technology jobs from being shipped overseas. But Grove's remedies, including bigger university R&D budgets, tax cuts and tort reform, would do nothing to curb domestic job loss, only strengthen the balance sheet of domestic enterprises still in the hunt for expedient cost-saving devices.
My own solution is more to the point towards saving jobs.
1) All governmental entities (local, state, federal) to require any business doing business with them to provide made in American goods, to certify the goods and services were produced in America by workers eligible to work in the U.S. This should require enough work to counter some of the effects as well as provide the cushion for national security the next time it is needed. .
2) I would think a company would use "Made in America" as a marketing strategy and be strong enough to make it work. Walmart before Sam’s death did that and prospered. Why wouldn’t another company or many such corporations? If consumers were to purchase because of that factor, others would follow.
3) .Not a consumer boycott of foreign made goods but more positively, a consumer procott movement that buys only American made goods or encourages the purchase of such goods, perhaps even as far as having the vendors of each product specify what percentage was American produced. This could result in a boycott of retailers (one comes to mind) that do not sell American-made goods.
4) Establish a “Made in America” Political Party. The Democrats are missing a sure opportunity this year by not addressing this issue. Only John Kerry has raised it. By making this issue the fundamental difference between himself and the other Democrats, let alone Bush and the Republicans, a national debate on the issue could be established.
Everything Wal-Mart does - particularly its low prices - is done in the name of slavish devotion to consumer demand. And every day, millions of Americans ratify Wal-Mart's strategy by shopping there. As long as the consumer does not care, the end result is obvious. Only when the consumer rebels and decides that a strong country, a strong economy, jobs for himself and his neighbors, and a positive future is more important than saving a buck, will the trend turn-around. Until then, the consumers have bought into a devil’s bargain for low prices.
By Paul Herbig
.
Robert Reich’s editorial column on the future of work in America in the Friday, December 26, 2003 Wall Street Journal indicated the economic trends were evolving to a two class system: professionals and “personal service workers.” I would rename with two classes: the Haves and the Have-littles. Conspicuously absent is the Middle Class. Traditionally, the middle class contained higher paying union or skilled blue collar jobs (going to China), professionals (accountants, administrative, information technology—going to India), or small business owners (being squeezed out by Walmart and other retail conglomerates). The events Reich describes (and which indeed are occurring even as I write this) and the economic trends that appear to be in process, predict the end of the American Middle Class as we know it.
The Have-littles, those in the personal services (e.g.,retail, hotel/restaurant, other personal services), earning little more than minimum wage (as more and more fall into this category, the over-supply of workers will reduce wages for all) can not possibly hope to ever escape poverty status; even with two full-time breadwinners, they will still not eek out an acceptable living. If this sounds uncomfortably like the economic curve in lesser developed countries (a small upper class with most of the resources, a vast lower class with little of the resources, and a small, almost nonexistent middle class), that is indeed the end result.
As one reader replied, confirming this bleak future is already upon us: “My wife has worked at our local Wal-Mart for a few years and doesn't see much future for those who are working there. The associates who work the floor are paid a tad over minimum wage, have no benefits unless they purchase them, have one paid holiday per year, work an average of 34 to 36 hours per week. Not exactly the kind of job to raise a family on, or supplement one's retirement.” And the future will only have more such workers and families.
A Forrester Research study estimated that over the next 15 years some 3.3 million U.S. service sector jobs would be sent abroad. Economists at U.C. Berkeley say as many as 14 million programming, accounting, paralegal and other service jobs are at risk of being offshored. (Goldman Sachs & Co. says an estimated 200,000 IT-related service jobs have left the United States in the last three years.). Perot, in 1992, may have been right about the his famous job loss statement, just a decade premature and turning to the right (India, China) instead of straight South.
I believe this tremendous growth of offshoring is the result of convergence of several factors:
1) A labor market (high unemployment) that provides companies with upper hand in almost any personnel related activity. How else can you account for the passiveness in which employees knowingly and willingly train Indians as their replacement. If this were 1999 or before, those same employees in this same scenario would have given their employers the Bronx cheer on their way out the door and not humiliated themselves. The ultimate end to all this is wages for developed countries to converge with those from the developing countries: i.e., it will stop when our programmers are paid the same as those from India. A generally considerable lessening of the quality of life will be the inevitable result for all developing countries, but particularly noticeable for the U.S. .
2) Wal-mart’s rise to dominance, its obsession on costs, and its controlling behavior upon is suppliers, is forcing those suppliers to offshore to meet the prices Walmart allows them to charge. The automotive companies are also beginning to exhibit this behavior. A total focus on costs to the exclusion of relationships or any other long term conditions can only brew bad (I never have trusted beancounters to have long term interests in mind).. Those jobs that the employees at Wal-Mart did and the pay of the employees once provided middle class wages but with Wal-Mart in town the pay of these people drops to near poverty level in wages. And this isn’t just within the Wal-Mart store it also happens in Wal-Mart’s competitors that have to compete with Wal-Mart. We are spiraling towards the lowest common denominator. Wal-Mart, makes no apologies for its role in the spiralling down of employee wages and benefits. Wal-Mart, obviously, has de-emphasized the popular "Made in America" campaign that founder Sam Walton launched in the 1980s (and it was not coincidental that only after Sam’s death that the global corporate philosophy now seen presented itself—Sam would be turning in his grave if he saw what was being done now by the company that bears his name.)
This obsession on costs has spread to other American corporations. Electronic Data Systems Corp., founded by Ross Perot but no longer run by that noisy patriot, now recruits $1.25-an-hour tech workers in India and sheds their $10-an-hour counterparts in EDS's home state of Texas. Wall Street brokerages including Morgan Stanley and J. P. Morgan Chase & Co. are shifting from New York to India the ground-floor stock-research. Both India and China are already well-known to recruiters from Intel Corp. and Microsoft Corp. Carrier Corp. will relocate production to Asia from Syracuse, N.Y. No inducement or threat could now save Syracuse's 1,200 Carrier jobs, a company spokesperson said, "unless they are going to pick up New York State and move it."
3) Global marketplace and trading allows total international competition. Now with the internet, you can compare suppliers from all around the globe instantaneously. Now the Indians and Chinese can be given equal attention and low-cost takes on an international dimension. One major concern here is national security. As we lose our manufacturing to China and technology skills to India, our dependence on these nations become ever more critical. What happens in a time of national crisis or war? Will we still have enough manufacturing capability and professional skills nationally to fall back on? Is it only me or do others see an analogy of our giving India software expertise to that of selling scrap iron to Japan during the 30s?
The Wal-Mart economy knows the price of everything and the value of nothing - certainly not of a well cared-for workforce, or of a full-employment economy, or of competitive marketplaces that have not yet succumbed to the predations of a single omnipotent enterprise. And who's to blame for that? The consumer: you and I. At Wal-Mart, the customer is king, everyone else be damned: competitors, employers and even the domestic manufacturing base..
One suggested solution to the Walmartization of America dilemma is wage insurance as a possible prescription for those displaced by globalization. This takes care of providing a living wage but it does nothing to provide jobs or the self-respect that goes with them. Andy Grove, the corporate conscience and former CEO of Intel, has taken up the cause, warning that something drastic must be done to prevent the bulk of new information technology jobs from being shipped overseas. But Grove's remedies, including bigger university R&D budgets, tax cuts and tort reform, would do nothing to curb domestic job loss, only strengthen the balance sheet of domestic enterprises still in the hunt for expedient cost-saving devices.
My own solution is more to the point towards saving jobs.
1) All governmental entities (local, state, federal) to require any business doing business with them to provide made in American goods, to certify the goods and services were produced in America by workers eligible to work in the U.S. This should require enough work to counter some of the effects as well as provide the cushion for national security the next time it is needed. .
2) I would think a company would use "Made in America" as a marketing strategy and be strong enough to make it work. Walmart before Sam’s death did that and prospered. Why wouldn’t another company or many such corporations? If consumers were to purchase because of that factor, others would follow.
3) .Not a consumer boycott of foreign made goods but more positively, a consumer procott movement that buys only American made goods or encourages the purchase of such goods, perhaps even as far as having the vendors of each product specify what percentage was American produced. This could result in a boycott of retailers (one comes to mind) that do not sell American-made goods.
4) Establish a “Made in America” Political Party. The Democrats are missing a sure opportunity this year by not addressing this issue. Only John Kerry has raised it. By making this issue the fundamental difference between himself and the other Democrats, let alone Bush and the Republicans, a national debate on the issue could be established.
Everything Wal-Mart does - particularly its low prices - is done in the name of slavish devotion to consumer demand. And every day, millions of Americans ratify Wal-Mart's strategy by shopping there. As long as the consumer does not care, the end result is obvious. Only when the consumer rebels and decides that a strong country, a strong economy, jobs for himself and his neighbors, and a positive future is more important than saving a buck, will the trend turn-around. Until then, the consumers have bought into a devil’s bargain for low prices.
The Walmartization effect
The Walmartization of America
Walmart. You either love it (consumers) or hate it (suppliers and competitors). But all agree it has changed America. It is the world’s largest company with $ 237B in sales (2002) and with 1.45 millions of employees. It is the proverbial 800 pound gorilla that wrecks everything in its path. Its obsession with low prices (Everyday Low Prices) appears to have taken it on a path similar to an analertizic teenager: less and less without regard to the final ominous outcome.
Walmart imported $ 10B of goods from China in 2002, making it the largest single importer. But that is only half of the story. Its relationship with suppliers is legendary: if you want to do business with us, you do it on our terms and we will tell you the price you are going to charge. Take it or leave it. Most take it because the company is their single largest customer (amounting in some cases to one-third or more of their business) and not to would be giving the market to one’s competitor. But there is a dark side of prosperity: Walmart is so insistent on perpetual cost decreases, companies may have record revenues and little to none or negative profits: what you make lose per unit you make up in volume. If you can’t meet the cost requirements of the Gorilla, they will take their business elsewhere. So you do what you must do: outsource to China to meet their cost requirements. If Walmart imported $B of goods, you can be certain its suppliers at least matched that number if not far exceeded it.
Which brings us to the question of the day: What good is Everyday Low prices if no one has any jobs to provide the income to pay for the cheap goods? Henry Ford’s breakthrough of paying his workers $5/day was a shrewd way of providing a ready market for his cars: now his workers could afford to buy one. Walmart seems to have taken the other tact: emphasize costs above all else and let the chips fall where they may!
For the past two years we’ve seen a jobless recovery with growth, record productivity, profits but no jobs. What is happening with Walmart, the Walmartization of America, is happening nationally. Record productivity is great for the economy and the company but not for those workers whose jobs have forever been lost. Outsourcing jobs to China and India saves money, creates profits, and executive bonuses but is little consolation for those workers who wave goodbye to their living. In the years to come I fully expect to see this phenomena to continue (the recent announcements from the Automotive world regarding severe cost cutting measures being imposed upon their suppliers only confirms the notion).
I do not envy today’s youth. “Go to College” we tell them. “You must have a college education to succeed.” So today’s youth graduate with five figure student loans and with few job prospects. Only a decade ago, IT (Information Technology) jobs were in such high demand, one could name his/her own price and markets were begging people to enter the field. Now those that followed their advice find job pickings thin (the irony of the situation is not lost upon the laid-off manufacturing worker who lost his job to Mexico who retrained himself as an IT person only to lose his job to outsourcing to India). Many of these IT jobs (as well as several millions of traditional white collar and professional careers such as support, accountants, engineers) have found their way to India and other “cheaper” countries. Global economists may praise this shift as raising the standard of living of those in developing countries and providing productivity increases, more profits, and less expensive goods for the American consumer. The American consumer, however, must have cash, usually obtained from a job, to purchase these cheaper goods. If their jobs have disappeared, where will they obtain the cash? To paraphrase the Wal-Mart example; what benefit are cheaper goods if there is no one to buy them? My gut belief is the 00 decade will be one where the standard of living actually decreases. As much as I wish it were not so, this generation of youth graduating from college will probably be the first generation to have a decrease in quality of life compared to their parents.
The United States as a result of this Walmartization of America, is rapidly moving towards the ‘hollow corporation’ where the manufacturing has been outsourced overseas (China), the white collar (IT, support, accounting, marketing, engineering) subcontracted abroad to the cheapest source (India), and what’s left is top management. This has the audiacious beginnings of the double hump income curve often seen in lesser development countries: a huge under class, a tiny upper class with most of the income, and a small middle class. America’s middle class has traditionally come from well paying manufacturing jobs (soon to be gone), the white collar (going quickly) or the professionals (your time will come). What will be left will be plenty of minimum wage retail, fast food, and other service positions but not sufficient to provide the same quality of life as we once had.
What jobs are likely to remain in the US? Those positions that require direct contact. Primary medical physicians (doctors, dentists, optometrists, etc.), surgeons, nurses (however, radiologists whose job are to read X-rays are already being outsourced to India so too will similar back-office positions). Judges and lawyers (although those in the law profession not required face to face could well find themselves outsourced as well!). Bankers and Brokers and financial advisers who have required face-time with their clients. And on the other extreme, plumbers, carpenters, painters, electricians, gardeners and other craftsman. Perhaps we should be telling our kids to go for broke (doctors) or not go to college at all and take up a craft.
What can companies do to avoid being caught in this Walmartization of America effect? One is not to place all your eggs in one basket: diversify customers. The temptation is to have a big Daddy client who is consistent and large. But Big daddy rarely remains benigh and will inevitably begin dictating terms and conditions to you, even the price you are allowed to charge. At that point you are no longer an independent company but merely a colony. Two: keep innovating and differentiating your products. If you are the only game in town, you and only you have that product, you have the power, not the retailers. If they want your product, you can maintain your independence, perhaps just a bit longer. Three: search out alternative markets. For example, on-line through the internet or direct marketing through network marketing. Once again, you hopefully will retain the power and not the Gorilla retailers.
Ten years from now, what remains of the middle class will look back at the nineties as the Good Ole Days. They will wonder what happened and how to recover from the storm that wrecked their lives. We are unlikely to see such prosperity again. Globalization has mixed blessings. I too would like to see a wealthier India and China but not at my expense.
Walmart. You either love it (consumers) or hate it (suppliers and competitors). But all agree it has changed America. It is the world’s largest company with $ 237B in sales (2002) and with 1.45 millions of employees. It is the proverbial 800 pound gorilla that wrecks everything in its path. Its obsession with low prices (Everyday Low Prices) appears to have taken it on a path similar to an analertizic teenager: less and less without regard to the final ominous outcome.
Walmart imported $ 10B of goods from China in 2002, making it the largest single importer. But that is only half of the story. Its relationship with suppliers is legendary: if you want to do business with us, you do it on our terms and we will tell you the price you are going to charge. Take it or leave it. Most take it because the company is their single largest customer (amounting in some cases to one-third or more of their business) and not to would be giving the market to one’s competitor. But there is a dark side of prosperity: Walmart is so insistent on perpetual cost decreases, companies may have record revenues and little to none or negative profits: what you make lose per unit you make up in volume. If you can’t meet the cost requirements of the Gorilla, they will take their business elsewhere. So you do what you must do: outsource to China to meet their cost requirements. If Walmart imported $B of goods, you can be certain its suppliers at least matched that number if not far exceeded it.
Which brings us to the question of the day: What good is Everyday Low prices if no one has any jobs to provide the income to pay for the cheap goods? Henry Ford’s breakthrough of paying his workers $5/day was a shrewd way of providing a ready market for his cars: now his workers could afford to buy one. Walmart seems to have taken the other tact: emphasize costs above all else and let the chips fall where they may!
For the past two years we’ve seen a jobless recovery with growth, record productivity, profits but no jobs. What is happening with Walmart, the Walmartization of America, is happening nationally. Record productivity is great for the economy and the company but not for those workers whose jobs have forever been lost. Outsourcing jobs to China and India saves money, creates profits, and executive bonuses but is little consolation for those workers who wave goodbye to their living. In the years to come I fully expect to see this phenomena to continue (the recent announcements from the Automotive world regarding severe cost cutting measures being imposed upon their suppliers only confirms the notion).
I do not envy today’s youth. “Go to College” we tell them. “You must have a college education to succeed.” So today’s youth graduate with five figure student loans and with few job prospects. Only a decade ago, IT (Information Technology) jobs were in such high demand, one could name his/her own price and markets were begging people to enter the field. Now those that followed their advice find job pickings thin (the irony of the situation is not lost upon the laid-off manufacturing worker who lost his job to Mexico who retrained himself as an IT person only to lose his job to outsourcing to India). Many of these IT jobs (as well as several millions of traditional white collar and professional careers such as support, accountants, engineers) have found their way to India and other “cheaper” countries. Global economists may praise this shift as raising the standard of living of those in developing countries and providing productivity increases, more profits, and less expensive goods for the American consumer. The American consumer, however, must have cash, usually obtained from a job, to purchase these cheaper goods. If their jobs have disappeared, where will they obtain the cash? To paraphrase the Wal-Mart example; what benefit are cheaper goods if there is no one to buy them? My gut belief is the 00 decade will be one where the standard of living actually decreases. As much as I wish it were not so, this generation of youth graduating from college will probably be the first generation to have a decrease in quality of life compared to their parents.
The United States as a result of this Walmartization of America, is rapidly moving towards the ‘hollow corporation’ where the manufacturing has been outsourced overseas (China), the white collar (IT, support, accounting, marketing, engineering) subcontracted abroad to the cheapest source (India), and what’s left is top management. This has the audiacious beginnings of the double hump income curve often seen in lesser development countries: a huge under class, a tiny upper class with most of the income, and a small middle class. America’s middle class has traditionally come from well paying manufacturing jobs (soon to be gone), the white collar (going quickly) or the professionals (your time will come). What will be left will be plenty of minimum wage retail, fast food, and other service positions but not sufficient to provide the same quality of life as we once had.
What jobs are likely to remain in the US? Those positions that require direct contact. Primary medical physicians (doctors, dentists, optometrists, etc.), surgeons, nurses (however, radiologists whose job are to read X-rays are already being outsourced to India so too will similar back-office positions). Judges and lawyers (although those in the law profession not required face to face could well find themselves outsourced as well!). Bankers and Brokers and financial advisers who have required face-time with their clients. And on the other extreme, plumbers, carpenters, painters, electricians, gardeners and other craftsman. Perhaps we should be telling our kids to go for broke (doctors) or not go to college at all and take up a craft.
What can companies do to avoid being caught in this Walmartization of America effect? One is not to place all your eggs in one basket: diversify customers. The temptation is to have a big Daddy client who is consistent and large. But Big daddy rarely remains benigh and will inevitably begin dictating terms and conditions to you, even the price you are allowed to charge. At that point you are no longer an independent company but merely a colony. Two: keep innovating and differentiating your products. If you are the only game in town, you and only you have that product, you have the power, not the retailers. If they want your product, you can maintain your independence, perhaps just a bit longer. Three: search out alternative markets. For example, on-line through the internet or direct marketing through network marketing. Once again, you hopefully will retain the power and not the Gorilla retailers.
Ten years from now, what remains of the middle class will look back at the nineties as the Good Ole Days. They will wonder what happened and how to recover from the storm that wrecked their lives. We are unlikely to see such prosperity again. Globalization has mixed blessings. I too would like to see a wealthier India and China but not at my expense.
Indian assault
Indian Assault
The story on India’s assault on U.S. services and the impact on U.S. companies has several major flaws. One: It believes ‘that harnessing Indian brainpower will greatly boost American tech and services leadership by filling a big projected shortfall in skilled labor as baby boomers retire.” If the boomers find their jobs transferred overseas and must rely on considerably lower-paying jobs (if they can find them at all), how will they be able to retire? I project many boomers will be working well into their seventies because they cannot afford to retire. Two: “Throughout U.S. History, workers have been pushed off farms, textile mills, steel plants . . . managed to move up to better-paying, higher-quality jobs.” Like what? Agriculture migrated to manufacturing which yielded to Services which now has passed the baton to Information Technology. Manufacturing jobs have vanished or will soon go to China. Services and IT jobs will go to India (“Kearney predicts 500,000 financial services jobs offshore by 2008”) With 234,000 IT professionals unemployed in the US, jobless rates more than doubling in three years, with India having a ‘$57Billion services export industry employing 4 million people by 2008’ it will only get worse. Where do you expect them to find work . . . at the local Wal-mart or fast-food chain at near minimum wage?
Three: Paying Indian workers 1/10 what an American costs will save corporations tons of money, increase their profits immensely and will lead directly to the hollow corporation, whose executive offices are located here but whose manufacturing and services/support outsourced off-shore. Unlike Ford whose $5/day pay was specifically created to allow his workers to afford the products they built, these companies do not understand if your customers have no job, you cannot buy the product, no matter how cheap it has been made.
In conclusion, This obsession with costs will only result with millions of formerly skilled workers contending with much lower-paying jobs, probably retail, if they can find work at all (the alternative is for the skilled workers to accept positions at comparable salary ranges to the Indians and Chinese—perhaps 15 to 20% of current levels—what everyone would consider poverty level wages). Even dual income families will be hard pressed to pay the increasingly higher insurance, health costs, taxes, tuition, and eek out a modest living. The route to the middle class has traditionally been higher paying manufacturing (soon to be in China) or services or professionals (as your article so well described it, flowing like a river to India). The end result, I fear, is the death of the middle class. Already, many formerly middle class families have been forced down the economic chain as a result of these outsourcing will little hope to regain their once vibrant lifestyles. The U.S., I fear, is rapidly moving into the standard third world economic double dip curve with a small immensely rich upper class having most of the income, a very large underclass and a small, meaningless middle class. Is this the future we want for our children and for us in our old age?
The decade of 00s will be long remembered as when the standard of living began falling for the average American. Today's youth and college graduates could well be the first generation NOT to economically exceed their parents. Perhaps “India will drive down costs in services” but that is small consolation for the laid-off manufacturing worker who retrained in IT only to see his second job go to India. Perhaps his third career should be in plumbing, painting, or gardening, those jobs should not be outsourced anytime soon (sic).
I am all for helping the Indians and Chinese improve their economies but not at my expense, my children’s future, and the creation of a wasteland that was once a thriving heartland.
The story on India’s assault on U.S. services and the impact on U.S. companies has several major flaws. One: It believes ‘that harnessing Indian brainpower will greatly boost American tech and services leadership by filling a big projected shortfall in skilled labor as baby boomers retire.” If the boomers find their jobs transferred overseas and must rely on considerably lower-paying jobs (if they can find them at all), how will they be able to retire? I project many boomers will be working well into their seventies because they cannot afford to retire. Two: “Throughout U.S. History, workers have been pushed off farms, textile mills, steel plants . . . managed to move up to better-paying, higher-quality jobs.” Like what? Agriculture migrated to manufacturing which yielded to Services which now has passed the baton to Information Technology. Manufacturing jobs have vanished or will soon go to China. Services and IT jobs will go to India (“Kearney predicts 500,000 financial services jobs offshore by 2008”) With 234,000 IT professionals unemployed in the US, jobless rates more than doubling in three years, with India having a ‘$57Billion services export industry employing 4 million people by 2008’ it will only get worse. Where do you expect them to find work . . . at the local Wal-mart or fast-food chain at near minimum wage?
Three: Paying Indian workers 1/10 what an American costs will save corporations tons of money, increase their profits immensely and will lead directly to the hollow corporation, whose executive offices are located here but whose manufacturing and services/support outsourced off-shore. Unlike Ford whose $5/day pay was specifically created to allow his workers to afford the products they built, these companies do not understand if your customers have no job, you cannot buy the product, no matter how cheap it has been made.
In conclusion, This obsession with costs will only result with millions of formerly skilled workers contending with much lower-paying jobs, probably retail, if they can find work at all (the alternative is for the skilled workers to accept positions at comparable salary ranges to the Indians and Chinese—perhaps 15 to 20% of current levels—what everyone would consider poverty level wages). Even dual income families will be hard pressed to pay the increasingly higher insurance, health costs, taxes, tuition, and eek out a modest living. The route to the middle class has traditionally been higher paying manufacturing (soon to be in China) or services or professionals (as your article so well described it, flowing like a river to India). The end result, I fear, is the death of the middle class. Already, many formerly middle class families have been forced down the economic chain as a result of these outsourcing will little hope to regain their once vibrant lifestyles. The U.S., I fear, is rapidly moving into the standard third world economic double dip curve with a small immensely rich upper class having most of the income, a very large underclass and a small, meaningless middle class. Is this the future we want for our children and for us in our old age?
The decade of 00s will be long remembered as when the standard of living began falling for the average American. Today's youth and college graduates could well be the first generation NOT to economically exceed their parents. Perhaps “India will drive down costs in services” but that is small consolation for the laid-off manufacturing worker who retrained in IT only to see his second job go to India. Perhaps his third career should be in plumbing, painting, or gardening, those jobs should not be outsourced anytime soon (sic).
I am all for helping the Indians and Chinese improve their economies but not at my expense, my children’s future, and the creation of a wasteland that was once a thriving heartland.
If things are so good why do we feel so bad?
re: If Things are so good why do we feel so bad.
The Walmartization of America is derived from an anorexic obsession with cutting costs, continuous productivity, moving production to China, and outsourcing white-collar and professional jobs to India. Unlike Ford whose $5/day pay was specifically created to allow his workers to afford the products they built, these companies do not understand if you have no job, you cannot buy the product, no matter how cheap it has been made. In the not-so-distant world of 'hollow corporations', the only jobs left here will be top management. Formerly skilled workers will have to contend with low-paying retail positions if they can find work at all. Even dual income families will be hard pressed to pay the increasingly higher insurance, health costs, taxes, tuition, and eek out a modest living. The end result, I fear, is the death of the middle class. The decade of 00s will be long remembered as when the standard of living fell for the average American. Today's youth and college graduates could well be the first generation NOT to economically exceed their parents. Why get a college degree in Computer Science, Engineering, Accounting, or management if your careerfield is being outsourced off-shore (Pity the two time loser: the plant worker whose plant moved aboard who went to the effort to learn the computer field only to see his new job gone likewise). My advice to my sons: Don't go to college. Learn a craft. At least plumbers, painters, and electricians will always be needed and probably never outsourced. No doubt we will look back at the 90s as the "Good Old Days."
The Walmartization of America is derived from an anorexic obsession with cutting costs, continuous productivity, moving production to China, and outsourcing white-collar and professional jobs to India. Unlike Ford whose $5/day pay was specifically created to allow his workers to afford the products they built, these companies do not understand if you have no job, you cannot buy the product, no matter how cheap it has been made. In the not-so-distant world of 'hollow corporations', the only jobs left here will be top management. Formerly skilled workers will have to contend with low-paying retail positions if they can find work at all. Even dual income families will be hard pressed to pay the increasingly higher insurance, health costs, taxes, tuition, and eek out a modest living. The end result, I fear, is the death of the middle class. The decade of 00s will be long remembered as when the standard of living fell for the average American. Today's youth and college graduates could well be the first generation NOT to economically exceed their parents. Why get a college degree in Computer Science, Engineering, Accounting, or management if your careerfield is being outsourced off-shore (Pity the two time loser: the plant worker whose plant moved aboard who went to the effort to learn the computer field only to see his new job gone likewise). My advice to my sons: Don't go to college. Learn a craft. At least plumbers, painters, and electricians will always be needed and probably never outsourced. No doubt we will look back at the 90s as the "Good Old Days."
Myths and truths of Off shoring
Myths of Off-sourcing
By Paul A. Herbig
Foreign Direct Investment is the expensing of funds towards building facilities or making investments in a country different from one’s own. American foreign investment consists of American firms making investments in another country. But not all investment is the same. If the investment is oriented towards establishing a foothold in a country, for purposes of creating goods or services to be marketed in that country, as has been the vast majority of investments overseas, then it is a vital part of globalization, of expanding markets, of creating foreign trade. However, if the investment is for the sheer purpose of avoiding higher priced labor in the homeland and all the goods or services are meant to be shipped right back to the homeland and no marketing building operations in the foreign country are expected, this I call offshoring. And it is this particular brand of foreign direct investment that has, and rightfully so, many concerned.
Offshoring is certainly not a new phenomenon. For decades, numerous manufacturing industries have been creating facilities in other countries for labor cutting reasons: mostly Mexico as a result of Maquiladoras and NAFTA treaties. Since most of the manufacturing was in basic industries and was of the labor intensive assembly type, little concern was given to the losses (which although in the tens of thousands were quickly absorbed by the booming US economy). But today we see in offshoring a far more frightful behavior. Not just labor intensive jobs but highly skilled manufacturing, service jobs, and highly educated information technology and professional jobs have been offshored and continue to be in increasingly immense numbers (hundreds of thousands if not millions).
Starting decades ago with low-skilled manufacturing jobs in basic industries, followed by textiles, cars, semiconductors, and now, services, the nimbleness of the world's economy has allowed us to reduce costs by moving production to wherever it's least expensive. The benefits to our economy--in increased productivity, lower prices, and greater demand for American products--are touted by corporate America as the only way to remain competitive. 40% of the Fortune 500 expected to have done so by the end of this year, according to the research firm Gartner Inc. The savings are dramatic: Companies can cut 20% to 70% of their labor costs by moving jobs to low-wage nations.
"It's happening much faster [than in manufacturing]," says Cynthia Kroll, senior regional economist at UC Berkeley's Haas School of Business. "There are fewer capital investments required in outsourcing a services job." Kroll cowrote a recent study that pegged the current number of jobs vulnerable in some way to offshoring at a stunning 14 million or 10% of the work force
In IT alone, Gartner estimates that another 500,000 positions in the U.S. may leave by the end of this year (2004); in one scenario, as many as 25% of all IT professional jobs could go overseas by 2008. If just 40% of those people never find another job in their field, that could be more than 1 million whose careers are altered forever..In essence, no job is safe nor permanent. If it can be routinized or computerized and does not require live person to person contact, it is vulnerable. The true numbers are not 10% but perhaps double or triple that.
Offshoring is not just an American phenomenon: Tata Consulting Services (TCS), Indian-based with an Edinburgh office, recently forecast 40% growth in offshoring jobs from Britain next year, with most of them going to India. About half of the jobs leaving Britain will be well above call centre level. And for all of Europe: 730,000 estimated number of financial services job that will migrate from Western Europe through 2008, and 100,000 telecom jobs as well. These jobs are going to principlly India but also eastern Europe and china. One estimate is that the volume of European deals could match that of America. These are not all basic labor jobs but also includes good jobs such as research, management.
Careerplanner.com. and others have come up with a list of jobs and their relative vulnerability.
Extreme Risk | Accountant | Industrial Engineer | Production Control Specialist | Quality Assurance Engineer | Call-Center Operator | Help-Desk Specialist | Telemarketer
High or Moderate Risk | Automotive Engineer | Computer Systems Analyst | Database Administrator | Software Developer | Customer-Service Representative | CAD Technician | Paralegal/Legal Assistant | Medical Transcriptionist | Copy Editor/Journalist | Film Editor | Insurance Agent | Lab Technician | Human Resources Specialist
Low Risk | Airplane Mechanic | Artist | Carpenter | Civil Engineer | Headhunter | Interior Designer.
Corporate executives are climbing on the offshoring bandwagon at an alarming rate, anxious to get at that cost savings and improve the bottom line without worrying about customers or marketing. Yet, offshoring must be entered into carefully but not all that is said is true. Quite a few of the reasons given are myths. In this chapter, we intend to explore those myths and provide the truths.
1. Indian (Chinese, fill-in-the-blank) workers are better educated, more productive, and provide better quality than American workers
Truth: the only advantage they have is that they are cheaper. Studies have indicated that they produce many times less quality but no overhead (especially pensions and health costs) (some estimates are Indian workers are 15% as productive as the average US worker). Given their wage rates of one-quarter to one-sixth that of an American worker and given that they do not burden their employers with silly frills like health care and pension costs, even at 15% they can provide a cost savings.
2. America will continue to “Move up the curve” . . . as it did from Agriculture to Manufacturing, from Manufacturing to Services, from Services to Information, from Information to (Next level?) . . . And we should forget about the lower levels that are being offshored and continue to seek higher valued jobs at the next level of the curve.
Truth:
To move from Agriculture to Manufacturing required no new skills (muscles and a strong back) and almost all could make the transition. To move to services required additional skills (basically people skills) but average intelligence could still do the job acceptably so most could easily make the transition. The third migration to information technology has been the hardest, requiring advanced math skills, good analytical skills, and advanced mental ability and that limited those who could make the transition thus leaving considerable workers behind (In an August 2003 report entitled "Offshoring: Is It a Win-Win Game?" McKinsey Global Institute concludes with great specificity that every dollar of offshoring results in 58 cents of savings to the American economy. But even that report acknowledges that 31% of workers who lost their jobs in earlier waves were never fully reemployed, with 80% taking pay cuts).
This next migration will be the hardest yet with superior mental and analytical skills required, thus severely limiting those who can make the cut. For the modern migrations, the higher the level, the more education and smarts required, and therefore the fewer the people that can move there. Which leaves us with the issue of human capital: What about the rest who cannot make the transition? Are they just throwaways, the victim of capitalism unbound, victims of creative destruction, to be left to survive as best they can? (As one victim said it best: "We've had throwaway clothes, throwaway cars, and now we have throwaway people.”) What are our obligations to them? Education and retraining? And if they are unable to do so then what? Should we have a permanent class of workers on the dole? What social ramifications exist if we were to totally ignore them? If their numbers grow too high could this lead to social unrest? Enough of these wannabes and will it disrupt the consumer spending needed to maintain our economy?
The second aspect of moving up the curve is the pyramid effect. Business Week in its March1 article on India and outsourcing information technology jobs to India provide the Software Pyramid. At the bottom and most susceptible to offshoring are basic programming positions, of which over a million exist in the U.S. The next levels up are business analysts and project manages, of which only 100,000 of each exist. These are regarded as relatively safe havens for programmers to migrate upwards. These positions require additional skills and training that many of the programmers may not have nor can acquire. What are those unable to make the cut suppose to do? Work at Wal-Mart? Become a nurse’s aide? Let us assume that half of these can make the cut to the two higher ranking job classes. (a liberal projection). However, how many do we need for each category? Certainly not 500,000. At most double those are needed. The inevitable effect of flooding those positions with new entrants is to drive down the salaries for all. It is, therefore, not realistic to move up the pyramid since not all can master the skills necessary, not sufficient positions exist, and by doing so one will be creating overcapacity which will just make life difficult for all concerned.
And finally, the official solution is to “move up the value chain”, training to do higher end functions while Indians do the grunt work. What few seem to have noticed is that Indians are already heading up the same chain. Why won’t they in the future be able to do the analysts and project managers work for much less? Why shouldn’t those categories go offshore as well? What functions are safe? What therefore, should workers retrain for that will be around long enough for them to recoup their investment in retraining? Part of the inertia seen now is the fear of the unknown, fear of investing in another occupation only to see it too go away. Can anyone really blame them?
Carly Fiorina, chief executive for Hewlett-Packard Co. Her famous quote: "There is no job that is America's God-given right any more. We have to compete for jobs." Has put her in the hall of shame. Having millions in salary, stock options, bonuses, golden parachutes, she does not have to worry about changing positions, unlike the millions of middle and lower class workers she appears to want to see out of work. I can only wonder what her attitude would be like if her board decided to replace her with an Indian CEO who would work for 1/10th as much, require her to train her replacement, and terminate her with little notice and few benefits.
3. Only “Low paying, low skill jobs” are being offshored . . .
Truth: IBM, radiologists, White-collar jobs, professionals, highly educated positions are increasingly being offshored A recent Wall Street Journal article describes the occupations that are currently being offshored: medical transcriptionists, architects and drafters, analysts—legal and investment research, accountants and tax professionals, technical writers, insurance claims processors, desktop publishing, animators, claims processing for insurance and medical industries, customer-service, telemarketing, ticketing and reservations. All these positions are relatively well-paying and contribute significantly to middle-class aspirations.
For doctors, they are well established in providing specialised secretarial services. They are looking to provide specialised accountancy and legal services, and not just for big multinationals but also for small partnerships who can use only a handful of niche offshore workers. One senior government figure was heard musing that Indians could soon be producing British newspapers.
India is now eyeing a massive sector of Western economies, which basically includes anyone who works on-screen. That starts with the back office, dealing with data entry, account reconciliation and transaction reporting. It is now continuing through travel and expenses departments, order processing and even human resources, then into professional services and some of the top-earning jobs. If a process is digitized or routinized, it can be done in India, and more cheaply. Pay rates can be one-tenth of those in the U.S. or Britain, and once other costs are factored in, overall savings tend to come out between 40-60%. For India, that next wave will be a much bigger bonanza than call centres. An American consultancy reckons that the value of offshored business processing will rise from last year’s $1.3 billion to $24bn in 2007, meaning growth at 79% per year.
Is it safe to assume that there is a skill level or point in the food chain at which jobs can no longer be outsourced? "No one's immune .” Intel Chief Executive Craig Barrett said the United States "now has to compete for every job going forward. That has not been on the table before. It had been assumed we had a lock on white-collar jobs and high-tech jobs. That is no longer the case."
Very few jobs are sancrosanct.
4. **Globalization is good for all countries “Rising Tide Raises all ships” Theory of economics . . .
Truth:
When the international barriers that separate the American economy from the third world`s economy disappear, the labor markets almost merge. An overwhelming amount of the demand for college-education-requiring high-value-added middle class labor originates in the United States. However, China and India have populations of about 2.3 billion relatively impoverished people combined, and millions of them have received college training, and hundreds of millions more could receive if it an economic driver made getting that education and training feasible. A merger of the two labor markets means that the demand for college-educated will remain almost the same, but the supply of college-educated and technologically-trained labor will increase dramatically. Basic economic principles tell us that when the supply increases relative to demand, the supply curve shifts out, lowering the price point where the supply of labor curve intersects with the demand of labor curve. In this case, because the increase in the supply of college-educated labor is so dramatic relative to the demand for college-educated labor, American wages must fall. This means that the American standard of living and quality of life will also decrease dramatically, averaging out with the poverty of the third world.
Downward mobility and bringing Americans down to their level. Yes we will keep jobs here if you will accept the pay of Indians (A January 2004 study by Foote Partners shows that IT compensation has fallen for four straight quarters in the areas most vulnerable to outsourcing, dropping an average of 7.6% in 2003 alone) What we are seeing is labor arbitrage with global wage rates being reduced to the lowest common denominator. This is true not just in blue-collar assembly work but in services and technology as well. If Americans must accept the pay of Indians or Chinese in order to secure jobs in America, at half to one-quarter or less of what they have been making, how can it be good for Americans to go from a middle class existence to one below the poverty line?
5. “Competition is forcing us to go off-shore” (They Made me do it school of thought) . . .
Truth: “Competition is forcing us to go off-shore” (What I call the ‘They Made me do it’ school of thought). That is since everybody else is going.offshore I have to too!
For American/Japanese/European based multinationals to make that statement reminds me of the “Keeping up with the Jones” brand of suburb building that we so often see in more exclusive neighborhoods (or for that matter anywhere, although the degree of expense might not be the same the rationale is). You find this phenomena where one neighbor builds a new swimming pool and all the others must do likewise ; to save face, to keep up with his neighbors, to be the same as all the other houses on the block. The rationale is the same for executive compensation: “I am only getting 3 million a year and my golfing buddy CEO of XYZ is getting 4 plus options. How can I hold my head up high, let alone play a decent game of golf being so underpaid. I know he is laughing at me. For my good morale and for the good of the company, I need to be paid the same as he. Our company is at least as good as his!!” (Don’t all you underpaid, underemployed, or unemployed workers out there feel sorry for the poor man. Anyone want to start a collection to help his self-esteem be regained?)
The problem with that line of thought is that it is pure bunk. No one has to do it and by saying everyone else is doing it, so must we, is giving away your own personal conduct of behavior in favor of the mob and following blindly the mob. What is curious is the lack of investigation on whether or not it is a good thing, what the future repercussions could be, or what it might cost you in the long run, just the reasoning if they are doing it, it must be good and so must I. (If it sounds like your young child trying to justify why he/she ought to go to a party, be with their friends, do wild stunts, or jump off a climb, it is because it is the same line of thinking with about the same amount of thought behind the lemming thinking.) The only good part about such justification is that it removes you from being held accountable and if no good comes from the decision, it is not your fault and can be blamed on the mob (likewise executive fads come and go).
So the question remains: is it really necessary in the first place? Who gains from offshoring? An examination of the facts indicate that prices are not fluctuating very much so where are the competitive effects if you are not being forced to meet another’s lower cost when all competitors are not lowering costs and in fact are actually raising them? If cost savings from lower labor costs are not being passed through to the employees, nor to lower cost of goods sold, then where are these cost savings going? It is obvious: to higher profits of the firms. These higher profits are being transferred to add to the wealth of the executives of the firm and to the investors in the form of higher stock prices. How can they justify competitive reasons for doing so when the only competitive aspect is to see whose stock is higher?
Remember, all is in the mind of the beholder. For an executive or a board to say we must follow the competition because they are making us do it can be interpreted: We don’t want them to make higher profits than we are so we must too offshore and cut our costs by laying off loyal employees. Never mind the effects on thousands of workers, on whole communities, on the American economy, just so long as my excessive executive compensation is paid, my overwhelming bonus is delivered, and my stock portfolio is padded, I am happy. If I am happy, so goes the CEO, so should be the world. (Of course if CEOs could also be offshored, perhaps he would not be so anxious to do so)
To all you CEO' thinking of engaging in offshore outsourcing just because your competitors are doing it consider this:In the spirit of true competitiveness here is a golden opportunity to kick the %#@&!! out of your competitors as follows:
1. Advertise the fact that they are displacing American workers and you are not.
2. Advertise the fact that they are exposing their customer's personal information overseas and you are not.
3. Advertise the fact that they are exposing their customers to the risk of international conflicts and you are not.
4. Advertise to recruit their ex-employees who were displaced by outsourcing. Just imagine all of the inside information and dirty laundry regarding your competitors' business practices that would fall right into your hands if you hire the right people!
6. Consumers only care about cost and could care less where it is produced
Corollary:. .Offshoring provides lower cost goods. .
Truth: "There is hardly anything in the world that some men cannot make a little worse and sell a little cheaper."
- John Ruskin
The last few years has seen an America obsessed with cost: ever driven to achieve lower and lower costs with nothing low enough. Walmart’s obsession with cost and being the lowest imaginable has caused not a few of their suppliers to go bankrupt: what they lost per unit they tried to make up in volume. It has forced most of its suppliers to locate overseas contributing to the offshoring debacle and the immense trade deficit. It is not the only corporation so inclined: The Automotive industry has challenged it suppliers to cut costs to meet Chinese levels or beware the consequences. Of course, America’s consumers are not short of blame: in their effort to find the cheapest items, to cut pennies off items, they have made Walmart the largest corporation in the world and in the process destroyed the business infrastructure of a thousand small towns. But what the heck, we saved a few pennies didn’t we?
Which makes me wonder (Yes I do question life and its perplexities a lot). Is there more to life than cost? Is life supposed to be all about finding the cheapest item always, no matter what the eventual cost? Let us presume it is. If true, we would all be driving Yugos, living in mobile homes, wearing hand-me-down clothes until they turned to rags, eating spam and mac ‘n cheese every day, using old crates for furniture, drinking boone’s farm, and rolling your own. Let’s take a roll call of readers: how many fall into this category? I’m still searching. Just what I suspected: none.
If there is more to life than the cost of an item then what are they? Why buy a Chevy, A Ford, a Chrysler rather than a Yugo? Perhaps it deals with reputation, quality, reliability, service, support (not to mention safety!). We are willing to pay additional for these items. Why then do we buy SUVs or MiniVans? Perhaps it is because we need to ferry more than 2 people at a time (in the case of some soccer moms or dads an entire team). Then it is worth paying more for to have the features and capabilities we seek. The boss is in the market for another vehicle and she will only consider minivans. Why? Because in one she sits up high and feels more in control than in a street hugging vehicle. Is she willing to pay more for that function: of course.
Let’s take the analogy one step further. Why would anyone want to purchase a BMW, Porsche, or Mercedes Benz when they can get the same transportation capabilities for a lot less? Because they want more, the prestige, the status, the eye-turning vehicle, than just a mere engine and four wheels. And then, if given the choice, would you buy from your reliable dealer Jim, a trusted family friend for over 20 years, with whom you have purchased three vehicles and have had them serviced without problems for that entire length of time, or from Friendly Al, the shady new dealer just down the street who offers you the same car for $100 less. I do not know about you but I would choose Jim every time. Why? There is a lot less risk with a known tried entity than with an unknown. Does that mean I am willing to pay more for dealing with Jim. Yes. I know he will be there tomorrow if I need him; I have no such confidence with Friendly Al.
Is there more to life than mere cost? Yes. Than why are we as consumers, as industrial customers, so penny-wise and pound foolish? Why stop doing business with an American firm whom you have dealt with for fifty flawless years to buy from a new Chinese firm just to save a few pennies? Is it worth ignoring Old Joe, the bicycle shop owner, whom you have purchased three bikes from and have had serviced and repaired without failure, just to save $5 or $10 at an unnamed big box Discount store and as a consequence see Old Joe go out of business? Who then will fix your bikes? Not the big box store for sure.
Isn’t it about time we view the future and examine the consequences before running to save a few pennies? There is a lot more than just cost in life and we ought to consider those factors before our next purchase.
7. Better Education, more skills are the answer for American Workers. . . ?
We are shooting ourselves in the foot. The Information Technology (IT) industry in the U.S. has begun an inevitable death spiral. Offshoring and high unemployment in the field has caused wages to drop dramatically. They will continue until an equilibrium with overseas counterparts has been reached (probably in low 40s). The best and brightest of our youth will see this tumble and correctly calculate the industry holds no future for them and they will go elsewhere (The number of Computer Science majors have fallen annually over the last 3 years and will continue to drop). One day the multinationals will look around and comment with delayed justification, “See. We can’t find enough good IT workers. Not enough American students are entering this field so we have no choice but to bring in foreign workers and offshore these jobs.”. And so the vicious circle has claimed yet another American industry.
"The problem is not a lack of highly educated workers," said Scott Kirwin, founder of the Information Technology Professionals Association of America."The problem is a lack of highly educated workers willing to work for the minimum wage or lower in the U.S. Costs are driving outsourcing, not the quality of American schools."
8. The looming American labor shortage (when baby boomers retire) is a cause of off-shoring and will mute its effect . . .
“There are three types of lies in this world: lies, damned lies, and statistics.” Mark Twain
Truth: No such imminent shortage exists
As a marketing instructor, I continually preach to my students one of the keys to success is to catch a trend early and ride its shirttails to riches. Some of the easiest trends to spot come from an analysis of demographics. It is easy to determine how many college students there will be 10 years from now, just count the 8-12 year olds and voila you have an excellent picture of what to expect. Along the same vein, though, demographics are statistics and, as Mark Twain so eloquently phrased it, sometimes you can twist the facts to read what you want them to. Beware!
My sermon this week is on the myth of the upcoming labor shortage Recently, the U.S. Bureau of Labor Statistics estimates a shortfall of about 10 million workers within the next seven years. “Between 2000 and 2010, the number of Americans between the ages of 55 and 64 will jump 47.2 percent, while those aged 25 to 34 will increase only 2.8 percent. The number of workers aged 35 to 45 will actually drop 13.7 percent.”
The study suggests employers may well face difficult challenges in recruiting and hiring people in the future..
The demographic that is causing this panic is the retirement of the baby boomers. The Baby Boomers, those born between 1946 and 1960 have been known as the pig in the python for their tidal wave effect on the social fabric of this nation ever since their births. The Baby Bust, Generation X as sometimes referred to, were born from 1963 to 1977 and consist of only 60% of the numbers the Boomers had. By 2010, it is estimated there will be 74 Million boomers compared to only 47 Million Busters. Herein lies the worry, those first boomers will reach retirement age in 2011 with the rest to follow for the next two decades. With such huge numbers of boomers retiring and considerably fewer busters, to many Chicken Littles, it is a crisis in the making.
Fallacies with this argument are many. 1) this assumption is predicated on the unrealistic expectation that the boomers will quit work at age 65. Unlike their parents and grandparents, many boomers will continue to work past 65, even though they may change the kind of work they do. The Retirement Confidence Survey released by the Employee Benefit Research Institute in April found workers expect to stay on the job longer to make up for any savings shortfall with 54% expecting to wait until at least age 65 to retire and 68% expecting to work for pay in some capacity after they retire. As the age to receive full retirement benefits edges upwards towards 70, many boomers will continue to work even after 65. With offshoring downsizing and downward mobility hitting particularly hard the professional class, many boomers will have minimal retirement savings and must continue to work just to survive. Retire at 65. I wish.
2) Not only will the general population continue to grow, so will the labor force The Bureau of Labor Statistics estimates that the labor force will rise from 153 million in 2000 to 159 million in 2010. The assertion that the labor force will be smaller in the years ahead is wrong since the baby-bust cohort will be followed by an even larger generation, the Baby Boomlet, Generation Y, the children of the Boomers, who are now in their teens and 20s.
3) The U.S. economy today is eight times bigger than it was at the end of World War II, but the workforce is only twice as big. Put another way, employees are roughly four times as productive today as they were in the late 1940s. If there had been no improvement in productivity, the economy would need four times as many workers as it now has in order to sustain the current level of gross domestic product. Continued productivity will limit the need for new workers (current productivity numbers of 3-4 percent mean a doubling every 20-25 years: that is, by 2030 it is likely we could have an economy twice as large as today manned by the same number of workers!).
4) Immigration, foreign workers in the U.S., and offshoring of U.S. jobs to other countries will impact both the work force and the number of jobs available.
The moral of the story is not to believe everything you hear or see unless you have had the chance to check the sources. Sometimes numbers do lie. Get in early on trends just make certain they are true trends!
9. Americans make too much (are overpaid).and we should learn to live with much less. .
i.e.,computer programming is generally calculated to cost $80 per hour. In India, that figure drops to $22 per hour, and in China it falls to $15 an hour.
Truth:
If you count health care benefits and pensions. If you include tougher labor laws, environmental standards, which workers in other countries do not have, perhaps not overpaid after all Would you want to sacrifice all those gains we have made in those fields so you can go back to paying workers below minimum just to compete with foreign workers? I think not.
10. Indians and Chinese need the jobs.
Truth: Approximately 150 million jobs exist in US. There are 2.5 Billion East Asians, mostly Indians and Chinese. Therefore, the number of jobs required for East Asians are upwards of 1.5 Billion. You could transfer all the American jobs to East Asia and still provide only 10% of needed jobs. I am all in favor of being charitable towards the poor Indians and Chinese but not at the price of sacrificing my own welfare or the future of my children.
11. India and China are where it is going to be at for the 21st century.
Truth: Only as long as cheap labor is available. As wage levels increase in those countries, multinationals will be looking at the next cheaper area. Already, jobs that just five years ago went to Ireland are now done in India; as wages rise there, new, cheaper sources of well-trained workers are springing up in such places as the Philippines and, of course, China
12. Foreign Direct Investment in the US is immense and any reaction to offshoring would hinder investments here let alone additional investment.
Truth: I have been writing often about the offshoring of US jobs to lower wage countries (right now that is India or China but come next year it may be an even lower wage country—sort of like the country of the month club—sic!!). I have received many notes from those who want to point out the immense number of “insourced” jobs that exist—that is, those companies which are foreign owned who have placed plants or facilities in the United States and hired American citizens as workers They point to these insourced companies and indicate that is exactly what American companies are doing when they offsource and that we can’t forget all the insourced companies.
I am very cognizant of foreign direct investment in the United States. (on the order of hundreds of billions of dollars) I am thankful of it and appreciative of the work it provides to American workers. But comparing the performance of these companies to US companies offshoring is not the same: it is an apples to oranges comparison.
Foreign companies when they come to the US (for example Toyota, Honda or Nissan to name just a few highly visible companies), set up shop here with the main objective of serving the U.S. marketplace, of providing goods to US consumers, or providing products to companies located in the United States which then produce goods for the American consumer. This is a very basic principle of trade: moving to where your markets are. It has been the predominant aspect of Foreign Direct Investment forever. U.S. Manufacturers build plants in Europe to serve the European Marketplace. Right now there are considerable foreign investment being pursued in China with the main objective being providing goods for the red hot Chinese marketplace. I have no problems with this nor should anyone else.
Where then is my gripe? When American firms move facilities to other countries for the expressed purpose of utilizing the lower wages in that country but whose final intent or destination for those goods are the good old U.S.A. This is offshoring. Call centers are an excellent example. Their major purpose is to service the American marketplace. When they are moved, lock, stock, and barrel, to India, they are oriented not to serve the Indian marketplace but to continue to serve the American market. The same goes for Information Technology jobs, other manufacturing and service jobs which are primarily uprooted from the US and moved to another country for the sole purpose of taking advantage of lower wages and not to serve the local market. This offshoring is merely a sham on American workers.
Which brings to mind another interesting thought. The U.S. has a $500 billion trade deficit, increasing yearly. During the late 70s, we were losing auto industry share to Japanese companies. What we did then was to twist their arms and indicate forcefully that if they wanted to sell automobiles here, they need to build them here. And it worked. Today millions of cars per year are built in the U.S. by foreign auto manufacturers.
Why can’t we take a similar tact for other goods? If they want to sell it here, they must make it here? We did it before and it worked to save an entire industry. As a country with the highest standard of living in the world and the most lucrative consumer market that exists, why shouldn’t the government twist arms with other counties over other industries to build product here. If they want to sell it in the US they must produce so much of the product (or so much a percentage of the good must be American content) or else?
We are losing entire industries in a space of a few years. We must act and act now to reverse the flow. Sell it here. Build it here. That’s my motto..
13. American firms have only best American interests at hear.
Truth: Right. And you believe in Santa Claus and the Tooth Fairy too!
Newsnote: In March 2004, German Chancellor Gerhard Schroder called multinationals that transfer jobs to lower cost countries “unpatriotic.”
The Fortune 1000 and their service counterparts (Banks, Brokerages, insurance, Transportation) can no longer be considered American companies but, instead, multinational entities. This is not mere synaptics. American companies have loyalty and commitment to the United States and the communities they reside in. Not so for multinational concerns, which most all the larger corporations have become. Their entire mission is to be globally competitive (in itself not an altogether evil concept but as taken to the extreme as it has been, it has considerable negative consequences to the local communities and nation as a whole). Multinational corporations, in general, could care less where a product is manufactured nor where it is developed as long as it is available on a global basis for a competitive price. Any cost savings do not necessarily go into lower product costs nor higher innovation nor additional research and development as economists would have you believe but rather into higher profits which translates into higher bonuses and salaries for the executives and higher stock prices for the privileged few owners of the stocks. The German Chancellor is right but patriotism for most multinationals serves no purpose at a stockholder’s meeting, during a board meeting, or to the marketplace.
Just examine our own local communities. What entities belong to the Chamber of Commerce? Which ones regularly donate goods for charities or raffles or school functions? Local small businesses. The larger chains, the big boxes, the corporate owned fast food franchises, have no stakes in the community save to pluck as much cash out as possible to ship it to their headquarters, wherever that may be. What commitment do these firms (mostly divisions or branches of the Fortune 1000) have to our communities? None. And that is the way they want it to be.
A Paradox analogous to the tragedy of the commons is inevitable here. The multinationals covet the American marketplace, the hundreds of millions of (right now) well-off consumers. Yet they wish to eventually serve that market from afar with minimum or no high-priced American labor. They are counting on all the other companies to stay in America providing high wage jobs to provide income to spend on their own goods made overseas and services provided offshore. What is going to happen when most if not all companies decide to exploit labor arbitrage and seek the lowest possible costs. What companies will be left producing in the US to provide those high paying jobs to allow the other companies to continue to supply their foreign made goods to the American consumer? (the answer: as few as possible unless we the people do something and fast). What will happen when a critical mass of companies have gone overseas is analogical a volcanic crater when all the lava has been expelled: a catastrophic collapse of the economy, the currency, the social climate. A rapid descent into a second or even third world economy could well result.
And what of the major multinational corporations? With the North American market gone, very little reason exists for any headquarter or development function to remain here. It would probably be better served in a country that is ascending, not one that has descended to the depths. Multinationals are only interested in marketing to affluent markets but producing products at the lowest possible prices. What causes affluence? The availability (or inevitable lack) of high paying jobs which, by definition, the multinationals will seek to move elsewhere to the lowest possible cost source, and in so doing will destroy the very affluence they feed off. Unlike a parasite, though, once their host has been consumed, they will not necessarily die with it but move on to the next market, the next lowest cost producing country, ever seeking that absolute bottom: where workers will pay them for the privilege of working for the corporation.
Corporate Loyalty. Dream on. That concept died years ago
What are the Unabated Consequences: of offshoring that are not being told?
*
1. The eventual rise of a*Two class system: the haves and the have nots and the loss of the middle class
America’ Middle Class has traditionally been composed of higher paying manufacturing (blue Collar) workers, white collar (service) workers, and professionals. Manufacturing is rapidly exiting the Country and as the article so explicitly describes, so are service jobs and eventually many professional jobs as well. Those who have lost their jobs are finding their future downwardly mobile as they find positions paying half or less their previous employment; record bankruptcies and foreclosures tell their story of survival on a day-to-day basis. Those who still have their jobs find unrelenting downward pressures on both wages and benefits. The net result in the not-so-distant future is the disappearance of the American Middle Class. The extinction of this class that has been the glue of the American social fabric for over two centuries does not bode well for this country. The effect of globalization and multinationals with no country loyalty (IBM can no longer be considered an American firm but a global one who seeks global advantages no matter what cost to any nation state) is the lowering of global wages to the least common denominator (As India will soon learn to its amazement when ‘higher-paying’ Indian jobs start moving to Filipinos and Indonesians who will work for half to third). As for globalization, beware of what you asked for, you just might get it, and we did!
2. National Security problems
We are also giving away our technology to other countries. As jobs are eliminated in the states, the people with those skills disappear and the information gets (partially) lost in the process. We are now so dependant on Asia that we would have a hard time if they cut all ties with the US.
the rapid escalation of outsourcing worries some economists and venture capitalists. Although startups rarely employ more than a few hundred people--often working for smaller salaries than big companies pay--they act as crucial incubators and entrepreneurial farm teams for established companies. Outsourcing startup work could have disastrous long-term consequences, critics say, depriving Americans of unique business experience and minimizing the likelihood that the next Hewlett-Packard will get its start in a Palo Alto garage.
"Silicon Valley isn't dead yet, but could outsourcing become a risk to the ecosystem?" asks Allen Morgan, managing director of Menlo Park-based venture firm Mayfield Fund. "Human beings aren't good at recognizing risks to the ecosystem when they're acting in their own self-interest--that's the case with the environment, and it might be the case now with Silicon Valley
Venture firms now sponsor how-to outsourcing clinics for companies in their portfolio, and more entrepreneurs are pitching business proposals that already include detailed offshore strategies. How "offshoreable" a project is can determine whether a venture firm will endorse a company with an initial funding round
3. Future uncertainties in education
Absurdly, Americans are being urged to "retrain" or acquire "additional skills" in the face of the trend to send jobs offshore — as if the vast majority of jobs they might retrain for couldn't just as easily be sent offshore, too, no matter what "additional skills" they might acquire. Too, the exporting of any job from any sector increases pressure on all the remaining sectors, because it increases the labor supply and drives down wages for everybody. Worst of all, the offshoring trend is accelerating, and is almost certain to accelerate even faster in the future; and if this occurs it will make for tremendous economic turbulence, which will make it difficult to even guess what to retrain for
4. Compression of wages everywhere in the economy:
Real Estate example—personal services flood
5. Loss of significant portion of tax base that will have to be made up by the rest of us (i.e. our own taxes rise greatly)
6.Privacy and security issues (of data)
Outsourcing jobs to offshore destinations can sharply increase data privacy risks and the complexity of managing that risk, several experts
at the Fourth Annual Privacy and Data Security Summit here warned this week. As a result, companies need to ensure that overseas vendors are contractually tied to specific conditions regarding how data is transmitted, accessed, used,stored and shared, they said. Those challenges include regulatory compliance, data protection and access issues, as well as monitoring and auditing issues.
Security breaches at offshore locations can be harder to
detect -- and deal with -- from a regulatory compliance standpoint. Under
California law, for example, companies are required to notify customers of
any database breach that may have compromised the customers'personal data as soon as the breach is discovered. With overseas vendors, it becomes a lotharder to know whether, and exactly when, a material breach may have occurred,
Also, when data is sent overseas for processing, companies often make little attempt at categorizing it. Personal data covered by privacy laws might be combined in one database with data protected under HIPAA rules or other laws. That makes it much harder to provide adequate levels of protection for different classes of data. Several companies that ship work overseas also handle data on European Union citizens and must abide by the more stringent requirements of EU privacy laws. In such cases, companies need to understand their own legal obligations.
Ensuring adequate physical protection of data at a foreign site is more difficult than doing so at a local site. Also, it's harder to find out if
data is being improperly accessed or misused. Sometimes overseas vendors mightsubcontract work out to smaller vendors within their own countries or tothose in other countries, adding yet another layer of risk.
A country's data privacy laws and its legal system also make a difference. India, which is the biggest outsourcing destination for many companies, has no formal data privacy law. Offshore vendors aren't obligated to comply with thesame privacy regulations their customers must meet as owners of the data.
7. Downward mobility, moving down economic scale to their level
8. Who will be able to afford all those cheap goods.
9. Crime, workplace violence increases
10. Potential civil war: haves vs have nots
In the SHORT-INTERMEDIATE term (10-20 years) offshoring could trigger an economic and political crisis in this country.
As we dilute our current "wealth" with 3rd world economics (masses living in poverty) by exporting all the wealth overseas, and importing disease, unemployment and hopelessness.
There will be a massive deflationary spiral triggered initially by the collapsing labor-cost "bubble" - one that has been growing and inflating for many many decades. And then add to that volatile cauldron, the $6 trillion government debt and the many
trillions of record consumer and mortgage debt that have been building up over the decades.With no jobs no-one will be servicing their massive debt loads anymore.Banks will begin to collapse.The economy will implode with a big BANG. Only the privileged few (in this country) will be able to afford the high priced products being sold by the companies that did all the offshoring. No-one will be able to pay for the overpriced housing, overpriced medical care, high taxes, any and all good and services sold in this country that on average are way higher than the rest of the civilized world.They will have to slash prices as demand goes to zero. And finally, it will be have versus have-not battle with the wealthy in their protected, gated communities guarded by their own security force attempting to protect themselves against the unemployed mobs in a scene reminiscent of the storming of Bastille.
By Paul A. Herbig
Foreign Direct Investment is the expensing of funds towards building facilities or making investments in a country different from one’s own. American foreign investment consists of American firms making investments in another country. But not all investment is the same. If the investment is oriented towards establishing a foothold in a country, for purposes of creating goods or services to be marketed in that country, as has been the vast majority of investments overseas, then it is a vital part of globalization, of expanding markets, of creating foreign trade. However, if the investment is for the sheer purpose of avoiding higher priced labor in the homeland and all the goods or services are meant to be shipped right back to the homeland and no marketing building operations in the foreign country are expected, this I call offshoring. And it is this particular brand of foreign direct investment that has, and rightfully so, many concerned.
Offshoring is certainly not a new phenomenon. For decades, numerous manufacturing industries have been creating facilities in other countries for labor cutting reasons: mostly Mexico as a result of Maquiladoras and NAFTA treaties. Since most of the manufacturing was in basic industries and was of the labor intensive assembly type, little concern was given to the losses (which although in the tens of thousands were quickly absorbed by the booming US economy). But today we see in offshoring a far more frightful behavior. Not just labor intensive jobs but highly skilled manufacturing, service jobs, and highly educated information technology and professional jobs have been offshored and continue to be in increasingly immense numbers (hundreds of thousands if not millions).
Starting decades ago with low-skilled manufacturing jobs in basic industries, followed by textiles, cars, semiconductors, and now, services, the nimbleness of the world's economy has allowed us to reduce costs by moving production to wherever it's least expensive. The benefits to our economy--in increased productivity, lower prices, and greater demand for American products--are touted by corporate America as the only way to remain competitive. 40% of the Fortune 500 expected to have done so by the end of this year, according to the research firm Gartner Inc. The savings are dramatic: Companies can cut 20% to 70% of their labor costs by moving jobs to low-wage nations.
"It's happening much faster [than in manufacturing]," says Cynthia Kroll, senior regional economist at UC Berkeley's Haas School of Business. "There are fewer capital investments required in outsourcing a services job." Kroll cowrote a recent study that pegged the current number of jobs vulnerable in some way to offshoring at a stunning 14 million or 10% of the work force
In IT alone, Gartner estimates that another 500,000 positions in the U.S. may leave by the end of this year (2004); in one scenario, as many as 25% of all IT professional jobs could go overseas by 2008. If just 40% of those people never find another job in their field, that could be more than 1 million whose careers are altered forever..In essence, no job is safe nor permanent. If it can be routinized or computerized and does not require live person to person contact, it is vulnerable. The true numbers are not 10% but perhaps double or triple that.
Offshoring is not just an American phenomenon: Tata Consulting Services (TCS), Indian-based with an Edinburgh office, recently forecast 40% growth in offshoring jobs from Britain next year, with most of them going to India. About half of the jobs leaving Britain will be well above call centre level. And for all of Europe: 730,000 estimated number of financial services job that will migrate from Western Europe through 2008, and 100,000 telecom jobs as well. These jobs are going to principlly India but also eastern Europe and china. One estimate is that the volume of European deals could match that of America. These are not all basic labor jobs but also includes good jobs such as research, management.
Careerplanner.com. and others have come up with a list of jobs and their relative vulnerability.
Extreme Risk | Accountant | Industrial Engineer | Production Control Specialist | Quality Assurance Engineer | Call-Center Operator | Help-Desk Specialist | Telemarketer
High or Moderate Risk | Automotive Engineer | Computer Systems Analyst | Database Administrator | Software Developer | Customer-Service Representative | CAD Technician | Paralegal/Legal Assistant | Medical Transcriptionist | Copy Editor/Journalist | Film Editor | Insurance Agent | Lab Technician | Human Resources Specialist
Low Risk | Airplane Mechanic | Artist | Carpenter | Civil Engineer | Headhunter | Interior Designer.
Corporate executives are climbing on the offshoring bandwagon at an alarming rate, anxious to get at that cost savings and improve the bottom line without worrying about customers or marketing. Yet, offshoring must be entered into carefully but not all that is said is true. Quite a few of the reasons given are myths. In this chapter, we intend to explore those myths and provide the truths.
1. Indian (Chinese, fill-in-the-blank) workers are better educated, more productive, and provide better quality than American workers
Truth: the only advantage they have is that they are cheaper. Studies have indicated that they produce many times less quality but no overhead (especially pensions and health costs) (some estimates are Indian workers are 15% as productive as the average US worker). Given their wage rates of one-quarter to one-sixth that of an American worker and given that they do not burden their employers with silly frills like health care and pension costs, even at 15% they can provide a cost savings.
2. America will continue to “Move up the curve” . . . as it did from Agriculture to Manufacturing, from Manufacturing to Services, from Services to Information, from Information to (Next level?) . . . And we should forget about the lower levels that are being offshored and continue to seek higher valued jobs at the next level of the curve.
Truth:
To move from Agriculture to Manufacturing required no new skills (muscles and a strong back) and almost all could make the transition. To move to services required additional skills (basically people skills) but average intelligence could still do the job acceptably so most could easily make the transition. The third migration to information technology has been the hardest, requiring advanced math skills, good analytical skills, and advanced mental ability and that limited those who could make the transition thus leaving considerable workers behind (In an August 2003 report entitled "Offshoring: Is It a Win-Win Game?" McKinsey Global Institute concludes with great specificity that every dollar of offshoring results in 58 cents of savings to the American economy. But even that report acknowledges that 31% of workers who lost their jobs in earlier waves were never fully reemployed, with 80% taking pay cuts).
This next migration will be the hardest yet with superior mental and analytical skills required, thus severely limiting those who can make the cut. For the modern migrations, the higher the level, the more education and smarts required, and therefore the fewer the people that can move there. Which leaves us with the issue of human capital: What about the rest who cannot make the transition? Are they just throwaways, the victim of capitalism unbound, victims of creative destruction, to be left to survive as best they can? (As one victim said it best: "We've had throwaway clothes, throwaway cars, and now we have throwaway people.”) What are our obligations to them? Education and retraining? And if they are unable to do so then what? Should we have a permanent class of workers on the dole? What social ramifications exist if we were to totally ignore them? If their numbers grow too high could this lead to social unrest? Enough of these wannabes and will it disrupt the consumer spending needed to maintain our economy?
The second aspect of moving up the curve is the pyramid effect. Business Week in its March1 article on India and outsourcing information technology jobs to India provide the Software Pyramid. At the bottom and most susceptible to offshoring are basic programming positions, of which over a million exist in the U.S. The next levels up are business analysts and project manages, of which only 100,000 of each exist. These are regarded as relatively safe havens for programmers to migrate upwards. These positions require additional skills and training that many of the programmers may not have nor can acquire. What are those unable to make the cut suppose to do? Work at Wal-Mart? Become a nurse’s aide? Let us assume that half of these can make the cut to the two higher ranking job classes. (a liberal projection). However, how many do we need for each category? Certainly not 500,000. At most double those are needed. The inevitable effect of flooding those positions with new entrants is to drive down the salaries for all. It is, therefore, not realistic to move up the pyramid since not all can master the skills necessary, not sufficient positions exist, and by doing so one will be creating overcapacity which will just make life difficult for all concerned.
And finally, the official solution is to “move up the value chain”, training to do higher end functions while Indians do the grunt work. What few seem to have noticed is that Indians are already heading up the same chain. Why won’t they in the future be able to do the analysts and project managers work for much less? Why shouldn’t those categories go offshore as well? What functions are safe? What therefore, should workers retrain for that will be around long enough for them to recoup their investment in retraining? Part of the inertia seen now is the fear of the unknown, fear of investing in another occupation only to see it too go away. Can anyone really blame them?
Carly Fiorina, chief executive for Hewlett-Packard Co. Her famous quote: "There is no job that is America's God-given right any more. We have to compete for jobs." Has put her in the hall of shame. Having millions in salary, stock options, bonuses, golden parachutes, she does not have to worry about changing positions, unlike the millions of middle and lower class workers she appears to want to see out of work. I can only wonder what her attitude would be like if her board decided to replace her with an Indian CEO who would work for 1/10th as much, require her to train her replacement, and terminate her with little notice and few benefits.
3. Only “Low paying, low skill jobs” are being offshored . . .
Truth: IBM, radiologists, White-collar jobs, professionals, highly educated positions are increasingly being offshored A recent Wall Street Journal article describes the occupations that are currently being offshored: medical transcriptionists, architects and drafters, analysts—legal and investment research, accountants and tax professionals, technical writers, insurance claims processors, desktop publishing, animators, claims processing for insurance and medical industries, customer-service, telemarketing, ticketing and reservations. All these positions are relatively well-paying and contribute significantly to middle-class aspirations.
For doctors, they are well established in providing specialised secretarial services. They are looking to provide specialised accountancy and legal services, and not just for big multinationals but also for small partnerships who can use only a handful of niche offshore workers. One senior government figure was heard musing that Indians could soon be producing British newspapers.
India is now eyeing a massive sector of Western economies, which basically includes anyone who works on-screen. That starts with the back office, dealing with data entry, account reconciliation and transaction reporting. It is now continuing through travel and expenses departments, order processing and even human resources, then into professional services and some of the top-earning jobs. If a process is digitized or routinized, it can be done in India, and more cheaply. Pay rates can be one-tenth of those in the U.S. or Britain, and once other costs are factored in, overall savings tend to come out between 40-60%. For India, that next wave will be a much bigger bonanza than call centres. An American consultancy reckons that the value of offshored business processing will rise from last year’s $1.3 billion to $24bn in 2007, meaning growth at 79% per year.
Is it safe to assume that there is a skill level or point in the food chain at which jobs can no longer be outsourced? "No one's immune .” Intel Chief Executive Craig Barrett said the United States "now has to compete for every job going forward. That has not been on the table before. It had been assumed we had a lock on white-collar jobs and high-tech jobs. That is no longer the case."
Very few jobs are sancrosanct.
4. **Globalization is good for all countries “Rising Tide Raises all ships” Theory of economics . . .
Truth:
When the international barriers that separate the American economy from the third world`s economy disappear, the labor markets almost merge. An overwhelming amount of the demand for college-education-requiring high-value-added middle class labor originates in the United States. However, China and India have populations of about 2.3 billion relatively impoverished people combined, and millions of them have received college training, and hundreds of millions more could receive if it an economic driver made getting that education and training feasible. A merger of the two labor markets means that the demand for college-educated will remain almost the same, but the supply of college-educated and technologically-trained labor will increase dramatically. Basic economic principles tell us that when the supply increases relative to demand, the supply curve shifts out, lowering the price point where the supply of labor curve intersects with the demand of labor curve. In this case, because the increase in the supply of college-educated labor is so dramatic relative to the demand for college-educated labor, American wages must fall. This means that the American standard of living and quality of life will also decrease dramatically, averaging out with the poverty of the third world.
Downward mobility and bringing Americans down to their level. Yes we will keep jobs here if you will accept the pay of Indians (A January 2004 study by Foote Partners shows that IT compensation has fallen for four straight quarters in the areas most vulnerable to outsourcing, dropping an average of 7.6% in 2003 alone) What we are seeing is labor arbitrage with global wage rates being reduced to the lowest common denominator. This is true not just in blue-collar assembly work but in services and technology as well. If Americans must accept the pay of Indians or Chinese in order to secure jobs in America, at half to one-quarter or less of what they have been making, how can it be good for Americans to go from a middle class existence to one below the poverty line?
5. “Competition is forcing us to go off-shore” (They Made me do it school of thought) . . .
Truth: “Competition is forcing us to go off-shore” (What I call the ‘They Made me do it’ school of thought). That is since everybody else is going.offshore I have to too!
For American/Japanese/European based multinationals to make that statement reminds me of the “Keeping up with the Jones” brand of suburb building that we so often see in more exclusive neighborhoods (or for that matter anywhere, although the degree of expense might not be the same the rationale is). You find this phenomena where one neighbor builds a new swimming pool and all the others must do likewise ; to save face, to keep up with his neighbors, to be the same as all the other houses on the block. The rationale is the same for executive compensation: “I am only getting 3 million a year and my golfing buddy CEO of XYZ is getting 4 plus options. How can I hold my head up high, let alone play a decent game of golf being so underpaid. I know he is laughing at me. For my good morale and for the good of the company, I need to be paid the same as he. Our company is at least as good as his!!” (Don’t all you underpaid, underemployed, or unemployed workers out there feel sorry for the poor man. Anyone want to start a collection to help his self-esteem be regained?)
The problem with that line of thought is that it is pure bunk. No one has to do it and by saying everyone else is doing it, so must we, is giving away your own personal conduct of behavior in favor of the mob and following blindly the mob. What is curious is the lack of investigation on whether or not it is a good thing, what the future repercussions could be, or what it might cost you in the long run, just the reasoning if they are doing it, it must be good and so must I. (If it sounds like your young child trying to justify why he/she ought to go to a party, be with their friends, do wild stunts, or jump off a climb, it is because it is the same line of thinking with about the same amount of thought behind the lemming thinking.) The only good part about such justification is that it removes you from being held accountable and if no good comes from the decision, it is not your fault and can be blamed on the mob (likewise executive fads come and go).
So the question remains: is it really necessary in the first place? Who gains from offshoring? An examination of the facts indicate that prices are not fluctuating very much so where are the competitive effects if you are not being forced to meet another’s lower cost when all competitors are not lowering costs and in fact are actually raising them? If cost savings from lower labor costs are not being passed through to the employees, nor to lower cost of goods sold, then where are these cost savings going? It is obvious: to higher profits of the firms. These higher profits are being transferred to add to the wealth of the executives of the firm and to the investors in the form of higher stock prices. How can they justify competitive reasons for doing so when the only competitive aspect is to see whose stock is higher?
Remember, all is in the mind of the beholder. For an executive or a board to say we must follow the competition because they are making us do it can be interpreted: We don’t want them to make higher profits than we are so we must too offshore and cut our costs by laying off loyal employees. Never mind the effects on thousands of workers, on whole communities, on the American economy, just so long as my excessive executive compensation is paid, my overwhelming bonus is delivered, and my stock portfolio is padded, I am happy. If I am happy, so goes the CEO, so should be the world. (Of course if CEOs could also be offshored, perhaps he would not be so anxious to do so)
To all you CEO' thinking of engaging in offshore outsourcing just because your competitors are doing it consider this:In the spirit of true competitiveness here is a golden opportunity to kick the %#@&!! out of your competitors as follows:
1. Advertise the fact that they are displacing American workers and you are not.
2. Advertise the fact that they are exposing their customer's personal information overseas and you are not.
3. Advertise the fact that they are exposing their customers to the risk of international conflicts and you are not.
4. Advertise to recruit their ex-employees who were displaced by outsourcing. Just imagine all of the inside information and dirty laundry regarding your competitors' business practices that would fall right into your hands if you hire the right people!
6. Consumers only care about cost and could care less where it is produced
Corollary:. .Offshoring provides lower cost goods. .
Truth: "There is hardly anything in the world that some men cannot make a little worse and sell a little cheaper."
- John Ruskin
The last few years has seen an America obsessed with cost: ever driven to achieve lower and lower costs with nothing low enough. Walmart’s obsession with cost and being the lowest imaginable has caused not a few of their suppliers to go bankrupt: what they lost per unit they tried to make up in volume. It has forced most of its suppliers to locate overseas contributing to the offshoring debacle and the immense trade deficit. It is not the only corporation so inclined: The Automotive industry has challenged it suppliers to cut costs to meet Chinese levels or beware the consequences. Of course, America’s consumers are not short of blame: in their effort to find the cheapest items, to cut pennies off items, they have made Walmart the largest corporation in the world and in the process destroyed the business infrastructure of a thousand small towns. But what the heck, we saved a few pennies didn’t we?
Which makes me wonder (Yes I do question life and its perplexities a lot). Is there more to life than cost? Is life supposed to be all about finding the cheapest item always, no matter what the eventual cost? Let us presume it is. If true, we would all be driving Yugos, living in mobile homes, wearing hand-me-down clothes until they turned to rags, eating spam and mac ‘n cheese every day, using old crates for furniture, drinking boone’s farm, and rolling your own. Let’s take a roll call of readers: how many fall into this category? I’m still searching. Just what I suspected: none.
If there is more to life than the cost of an item then what are they? Why buy a Chevy, A Ford, a Chrysler rather than a Yugo? Perhaps it deals with reputation, quality, reliability, service, support (not to mention safety!). We are willing to pay additional for these items. Why then do we buy SUVs or MiniVans? Perhaps it is because we need to ferry more than 2 people at a time (in the case of some soccer moms or dads an entire team). Then it is worth paying more for to have the features and capabilities we seek. The boss is in the market for another vehicle and she will only consider minivans. Why? Because in one she sits up high and feels more in control than in a street hugging vehicle. Is she willing to pay more for that function: of course.
Let’s take the analogy one step further. Why would anyone want to purchase a BMW, Porsche, or Mercedes Benz when they can get the same transportation capabilities for a lot less? Because they want more, the prestige, the status, the eye-turning vehicle, than just a mere engine and four wheels. And then, if given the choice, would you buy from your reliable dealer Jim, a trusted family friend for over 20 years, with whom you have purchased three vehicles and have had them serviced without problems for that entire length of time, or from Friendly Al, the shady new dealer just down the street who offers you the same car for $100 less. I do not know about you but I would choose Jim every time. Why? There is a lot less risk with a known tried entity than with an unknown. Does that mean I am willing to pay more for dealing with Jim. Yes. I know he will be there tomorrow if I need him; I have no such confidence with Friendly Al.
Is there more to life than mere cost? Yes. Than why are we as consumers, as industrial customers, so penny-wise and pound foolish? Why stop doing business with an American firm whom you have dealt with for fifty flawless years to buy from a new Chinese firm just to save a few pennies? Is it worth ignoring Old Joe, the bicycle shop owner, whom you have purchased three bikes from and have had serviced and repaired without failure, just to save $5 or $10 at an unnamed big box Discount store and as a consequence see Old Joe go out of business? Who then will fix your bikes? Not the big box store for sure.
Isn’t it about time we view the future and examine the consequences before running to save a few pennies? There is a lot more than just cost in life and we ought to consider those factors before our next purchase.
7. Better Education, more skills are the answer for American Workers. . . ?
We are shooting ourselves in the foot. The Information Technology (IT) industry in the U.S. has begun an inevitable death spiral. Offshoring and high unemployment in the field has caused wages to drop dramatically. They will continue until an equilibrium with overseas counterparts has been reached (probably in low 40s). The best and brightest of our youth will see this tumble and correctly calculate the industry holds no future for them and they will go elsewhere (The number of Computer Science majors have fallen annually over the last 3 years and will continue to drop). One day the multinationals will look around and comment with delayed justification, “See. We can’t find enough good IT workers. Not enough American students are entering this field so we have no choice but to bring in foreign workers and offshore these jobs.”. And so the vicious circle has claimed yet another American industry.
"The problem is not a lack of highly educated workers," said Scott Kirwin, founder of the Information Technology Professionals Association of America."The problem is a lack of highly educated workers willing to work for the minimum wage or lower in the U.S. Costs are driving outsourcing, not the quality of American schools."
8. The looming American labor shortage (when baby boomers retire) is a cause of off-shoring and will mute its effect . . .
“There are three types of lies in this world: lies, damned lies, and statistics.” Mark Twain
Truth: No such imminent shortage exists
As a marketing instructor, I continually preach to my students one of the keys to success is to catch a trend early and ride its shirttails to riches. Some of the easiest trends to spot come from an analysis of demographics. It is easy to determine how many college students there will be 10 years from now, just count the 8-12 year olds and voila you have an excellent picture of what to expect. Along the same vein, though, demographics are statistics and, as Mark Twain so eloquently phrased it, sometimes you can twist the facts to read what you want them to. Beware!
My sermon this week is on the myth of the upcoming labor shortage Recently, the U.S. Bureau of Labor Statistics estimates a shortfall of about 10 million workers within the next seven years. “Between 2000 and 2010, the number of Americans between the ages of 55 and 64 will jump 47.2 percent, while those aged 25 to 34 will increase only 2.8 percent. The number of workers aged 35 to 45 will actually drop 13.7 percent.”
The study suggests employers may well face difficult challenges in recruiting and hiring people in the future..
The demographic that is causing this panic is the retirement of the baby boomers. The Baby Boomers, those born between 1946 and 1960 have been known as the pig in the python for their tidal wave effect on the social fabric of this nation ever since their births. The Baby Bust, Generation X as sometimes referred to, were born from 1963 to 1977 and consist of only 60% of the numbers the Boomers had. By 2010, it is estimated there will be 74 Million boomers compared to only 47 Million Busters. Herein lies the worry, those first boomers will reach retirement age in 2011 with the rest to follow for the next two decades. With such huge numbers of boomers retiring and considerably fewer busters, to many Chicken Littles, it is a crisis in the making.
Fallacies with this argument are many. 1) this assumption is predicated on the unrealistic expectation that the boomers will quit work at age 65. Unlike their parents and grandparents, many boomers will continue to work past 65, even though they may change the kind of work they do. The Retirement Confidence Survey released by the Employee Benefit Research Institute in April found workers expect to stay on the job longer to make up for any savings shortfall with 54% expecting to wait until at least age 65 to retire and 68% expecting to work for pay in some capacity after they retire. As the age to receive full retirement benefits edges upwards towards 70, many boomers will continue to work even after 65. With offshoring downsizing and downward mobility hitting particularly hard the professional class, many boomers will have minimal retirement savings and must continue to work just to survive. Retire at 65. I wish.
2) Not only will the general population continue to grow, so will the labor force The Bureau of Labor Statistics estimates that the labor force will rise from 153 million in 2000 to 159 million in 2010. The assertion that the labor force will be smaller in the years ahead is wrong since the baby-bust cohort will be followed by an even larger generation, the Baby Boomlet, Generation Y, the children of the Boomers, who are now in their teens and 20s.
3) The U.S. economy today is eight times bigger than it was at the end of World War II, but the workforce is only twice as big. Put another way, employees are roughly four times as productive today as they were in the late 1940s. If there had been no improvement in productivity, the economy would need four times as many workers as it now has in order to sustain the current level of gross domestic product. Continued productivity will limit the need for new workers (current productivity numbers of 3-4 percent mean a doubling every 20-25 years: that is, by 2030 it is likely we could have an economy twice as large as today manned by the same number of workers!).
4) Immigration, foreign workers in the U.S., and offshoring of U.S. jobs to other countries will impact both the work force and the number of jobs available.
The moral of the story is not to believe everything you hear or see unless you have had the chance to check the sources. Sometimes numbers do lie. Get in early on trends just make certain they are true trends!
9. Americans make too much (are overpaid).and we should learn to live with much less. .
i.e.,computer programming is generally calculated to cost $80 per hour. In India, that figure drops to $22 per hour, and in China it falls to $15 an hour.
Truth:
If you count health care benefits and pensions. If you include tougher labor laws, environmental standards, which workers in other countries do not have, perhaps not overpaid after all Would you want to sacrifice all those gains we have made in those fields so you can go back to paying workers below minimum just to compete with foreign workers? I think not.
10. Indians and Chinese need the jobs.
Truth: Approximately 150 million jobs exist in US. There are 2.5 Billion East Asians, mostly Indians and Chinese. Therefore, the number of jobs required for East Asians are upwards of 1.5 Billion. You could transfer all the American jobs to East Asia and still provide only 10% of needed jobs. I am all in favor of being charitable towards the poor Indians and Chinese but not at the price of sacrificing my own welfare or the future of my children.
11. India and China are where it is going to be at for the 21st century.
Truth: Only as long as cheap labor is available. As wage levels increase in those countries, multinationals will be looking at the next cheaper area. Already, jobs that just five years ago went to Ireland are now done in India; as wages rise there, new, cheaper sources of well-trained workers are springing up in such places as the Philippines and, of course, China
12. Foreign Direct Investment in the US is immense and any reaction to offshoring would hinder investments here let alone additional investment.
Truth: I have been writing often about the offshoring of US jobs to lower wage countries (right now that is India or China but come next year it may be an even lower wage country—sort of like the country of the month club—sic!!). I have received many notes from those who want to point out the immense number of “insourced” jobs that exist—that is, those companies which are foreign owned who have placed plants or facilities in the United States and hired American citizens as workers They point to these insourced companies and indicate that is exactly what American companies are doing when they offsource and that we can’t forget all the insourced companies.
I am very cognizant of foreign direct investment in the United States. (on the order of hundreds of billions of dollars) I am thankful of it and appreciative of the work it provides to American workers. But comparing the performance of these companies to US companies offshoring is not the same: it is an apples to oranges comparison.
Foreign companies when they come to the US (for example Toyota, Honda or Nissan to name just a few highly visible companies), set up shop here with the main objective of serving the U.S. marketplace, of providing goods to US consumers, or providing products to companies located in the United States which then produce goods for the American consumer. This is a very basic principle of trade: moving to where your markets are. It has been the predominant aspect of Foreign Direct Investment forever. U.S. Manufacturers build plants in Europe to serve the European Marketplace. Right now there are considerable foreign investment being pursued in China with the main objective being providing goods for the red hot Chinese marketplace. I have no problems with this nor should anyone else.
Where then is my gripe? When American firms move facilities to other countries for the expressed purpose of utilizing the lower wages in that country but whose final intent or destination for those goods are the good old U.S.A. This is offshoring. Call centers are an excellent example. Their major purpose is to service the American marketplace. When they are moved, lock, stock, and barrel, to India, they are oriented not to serve the Indian marketplace but to continue to serve the American market. The same goes for Information Technology jobs, other manufacturing and service jobs which are primarily uprooted from the US and moved to another country for the sole purpose of taking advantage of lower wages and not to serve the local market. This offshoring is merely a sham on American workers.
Which brings to mind another interesting thought. The U.S. has a $500 billion trade deficit, increasing yearly. During the late 70s, we were losing auto industry share to Japanese companies. What we did then was to twist their arms and indicate forcefully that if they wanted to sell automobiles here, they need to build them here. And it worked. Today millions of cars per year are built in the U.S. by foreign auto manufacturers.
Why can’t we take a similar tact for other goods? If they want to sell it here, they must make it here? We did it before and it worked to save an entire industry. As a country with the highest standard of living in the world and the most lucrative consumer market that exists, why shouldn’t the government twist arms with other counties over other industries to build product here. If they want to sell it in the US they must produce so much of the product (or so much a percentage of the good must be American content) or else?
We are losing entire industries in a space of a few years. We must act and act now to reverse the flow. Sell it here. Build it here. That’s my motto..
13. American firms have only best American interests at hear.
Truth: Right. And you believe in Santa Claus and the Tooth Fairy too!
Newsnote: In March 2004, German Chancellor Gerhard Schroder called multinationals that transfer jobs to lower cost countries “unpatriotic.”
The Fortune 1000 and their service counterparts (Banks, Brokerages, insurance, Transportation) can no longer be considered American companies but, instead, multinational entities. This is not mere synaptics. American companies have loyalty and commitment to the United States and the communities they reside in. Not so for multinational concerns, which most all the larger corporations have become. Their entire mission is to be globally competitive (in itself not an altogether evil concept but as taken to the extreme as it has been, it has considerable negative consequences to the local communities and nation as a whole). Multinational corporations, in general, could care less where a product is manufactured nor where it is developed as long as it is available on a global basis for a competitive price. Any cost savings do not necessarily go into lower product costs nor higher innovation nor additional research and development as economists would have you believe but rather into higher profits which translates into higher bonuses and salaries for the executives and higher stock prices for the privileged few owners of the stocks. The German Chancellor is right but patriotism for most multinationals serves no purpose at a stockholder’s meeting, during a board meeting, or to the marketplace.
Just examine our own local communities. What entities belong to the Chamber of Commerce? Which ones regularly donate goods for charities or raffles or school functions? Local small businesses. The larger chains, the big boxes, the corporate owned fast food franchises, have no stakes in the community save to pluck as much cash out as possible to ship it to their headquarters, wherever that may be. What commitment do these firms (mostly divisions or branches of the Fortune 1000) have to our communities? None. And that is the way they want it to be.
A Paradox analogous to the tragedy of the commons is inevitable here. The multinationals covet the American marketplace, the hundreds of millions of (right now) well-off consumers. Yet they wish to eventually serve that market from afar with minimum or no high-priced American labor. They are counting on all the other companies to stay in America providing high wage jobs to provide income to spend on their own goods made overseas and services provided offshore. What is going to happen when most if not all companies decide to exploit labor arbitrage and seek the lowest possible costs. What companies will be left producing in the US to provide those high paying jobs to allow the other companies to continue to supply their foreign made goods to the American consumer? (the answer: as few as possible unless we the people do something and fast). What will happen when a critical mass of companies have gone overseas is analogical a volcanic crater when all the lava has been expelled: a catastrophic collapse of the economy, the currency, the social climate. A rapid descent into a second or even third world economy could well result.
And what of the major multinational corporations? With the North American market gone, very little reason exists for any headquarter or development function to remain here. It would probably be better served in a country that is ascending, not one that has descended to the depths. Multinationals are only interested in marketing to affluent markets but producing products at the lowest possible prices. What causes affluence? The availability (or inevitable lack) of high paying jobs which, by definition, the multinationals will seek to move elsewhere to the lowest possible cost source, and in so doing will destroy the very affluence they feed off. Unlike a parasite, though, once their host has been consumed, they will not necessarily die with it but move on to the next market, the next lowest cost producing country, ever seeking that absolute bottom: where workers will pay them for the privilege of working for the corporation.
Corporate Loyalty. Dream on. That concept died years ago
What are the Unabated Consequences: of offshoring that are not being told?
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1. The eventual rise of a*Two class system: the haves and the have nots and the loss of the middle class
America’ Middle Class has traditionally been composed of higher paying manufacturing (blue Collar) workers, white collar (service) workers, and professionals. Manufacturing is rapidly exiting the Country and as the article so explicitly describes, so are service jobs and eventually many professional jobs as well. Those who have lost their jobs are finding their future downwardly mobile as they find positions paying half or less their previous employment; record bankruptcies and foreclosures tell their story of survival on a day-to-day basis. Those who still have their jobs find unrelenting downward pressures on both wages and benefits. The net result in the not-so-distant future is the disappearance of the American Middle Class. The extinction of this class that has been the glue of the American social fabric for over two centuries does not bode well for this country. The effect of globalization and multinationals with no country loyalty (IBM can no longer be considered an American firm but a global one who seeks global advantages no matter what cost to any nation state) is the lowering of global wages to the least common denominator (As India will soon learn to its amazement when ‘higher-paying’ Indian jobs start moving to Filipinos and Indonesians who will work for half to third). As for globalization, beware of what you asked for, you just might get it, and we did!
2. National Security problems
We are also giving away our technology to other countries. As jobs are eliminated in the states, the people with those skills disappear and the information gets (partially) lost in the process. We are now so dependant on Asia that we would have a hard time if they cut all ties with the US.
the rapid escalation of outsourcing worries some economists and venture capitalists. Although startups rarely employ more than a few hundred people--often working for smaller salaries than big companies pay--they act as crucial incubators and entrepreneurial farm teams for established companies. Outsourcing startup work could have disastrous long-term consequences, critics say, depriving Americans of unique business experience and minimizing the likelihood that the next Hewlett-Packard will get its start in a Palo Alto garage.
"Silicon Valley isn't dead yet, but could outsourcing become a risk to the ecosystem?" asks Allen Morgan, managing director of Menlo Park-based venture firm Mayfield Fund. "Human beings aren't good at recognizing risks to the ecosystem when they're acting in their own self-interest--that's the case with the environment, and it might be the case now with Silicon Valley
Venture firms now sponsor how-to outsourcing clinics for companies in their portfolio, and more entrepreneurs are pitching business proposals that already include detailed offshore strategies. How "offshoreable" a project is can determine whether a venture firm will endorse a company with an initial funding round
3. Future uncertainties in education
Absurdly, Americans are being urged to "retrain" or acquire "additional skills" in the face of the trend to send jobs offshore — as if the vast majority of jobs they might retrain for couldn't just as easily be sent offshore, too, no matter what "additional skills" they might acquire. Too, the exporting of any job from any sector increases pressure on all the remaining sectors, because it increases the labor supply and drives down wages for everybody. Worst of all, the offshoring trend is accelerating, and is almost certain to accelerate even faster in the future; and if this occurs it will make for tremendous economic turbulence, which will make it difficult to even guess what to retrain for
4. Compression of wages everywhere in the economy:
Real Estate example—personal services flood
5. Loss of significant portion of tax base that will have to be made up by the rest of us (i.e. our own taxes rise greatly)
6.Privacy and security issues (of data)
Outsourcing jobs to offshore destinations can sharply increase data privacy risks and the complexity of managing that risk, several experts
at the Fourth Annual Privacy and Data Security Summit here warned this week. As a result, companies need to ensure that overseas vendors are contractually tied to specific conditions regarding how data is transmitted, accessed, used,stored and shared, they said. Those challenges include regulatory compliance, data protection and access issues, as well as monitoring and auditing issues.
Security breaches at offshore locations can be harder to
detect -- and deal with -- from a regulatory compliance standpoint. Under
California law, for example, companies are required to notify customers of
any database breach that may have compromised the customers'personal data as soon as the breach is discovered. With overseas vendors, it becomes a lotharder to know whether, and exactly when, a material breach may have occurred,
Also, when data is sent overseas for processing, companies often make little attempt at categorizing it. Personal data covered by privacy laws might be combined in one database with data protected under HIPAA rules or other laws. That makes it much harder to provide adequate levels of protection for different classes of data. Several companies that ship work overseas also handle data on European Union citizens and must abide by the more stringent requirements of EU privacy laws. In such cases, companies need to understand their own legal obligations.
Ensuring adequate physical protection of data at a foreign site is more difficult than doing so at a local site. Also, it's harder to find out if
data is being improperly accessed or misused. Sometimes overseas vendors mightsubcontract work out to smaller vendors within their own countries or tothose in other countries, adding yet another layer of risk.
A country's data privacy laws and its legal system also make a difference. India, which is the biggest outsourcing destination for many companies, has no formal data privacy law. Offshore vendors aren't obligated to comply with thesame privacy regulations their customers must meet as owners of the data.
7. Downward mobility, moving down economic scale to their level
8. Who will be able to afford all those cheap goods.
9. Crime, workplace violence increases
10. Potential civil war: haves vs have nots
In the SHORT-INTERMEDIATE term (10-20 years) offshoring could trigger an economic and political crisis in this country.
As we dilute our current "wealth" with 3rd world economics (masses living in poverty) by exporting all the wealth overseas, and importing disease, unemployment and hopelessness.
There will be a massive deflationary spiral triggered initially by the collapsing labor-cost "bubble" - one that has been growing and inflating for many many decades. And then add to that volatile cauldron, the $6 trillion government debt and the many
trillions of record consumer and mortgage debt that have been building up over the decades.With no jobs no-one will be servicing their massive debt loads anymore.Banks will begin to collapse.The economy will implode with a big BANG. Only the privileged few (in this country) will be able to afford the high priced products being sold by the companies that did all the offshoring. No-one will be able to pay for the overpriced housing, overpriced medical care, high taxes, any and all good and services sold in this country that on average are way higher than the rest of the civilized world.They will have to slash prices as demand goes to zero. And finally, it will be have versus have-not battle with the wealthy in their protected, gated communities guarded by their own security force attempting to protect themselves against the unemployed mobs in a scene reminiscent of the storming of Bastille.
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