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Zalatix

(8,994 posts)
27. So you're in favor of preserving the existing global barriers against American workers. Gotcha.
Wed Sep 12, 2012, 05:49 PM
Sep 2012

You want to know what offshoring has done to American jobs and wages? THIS.

http://businessfinancemag.com/article/economic-amp-business-focus-global-labor-arbitrage-resets-wages-0401

Offshoring will flatten wages in the United States and other advanced economies.
Global labor arbitrage -- the practice of constantly replacing expensive labor in one location with cheaper labor in another -- has been a cornerstone of corporate strategy for more than a century. This strategy matured over the past decade as technology and higher levels of development in the low-wage nations enabled their workers to take on service jobs and knowledge work; no longer is the practice limited to low-level production jobs. As developing countries provide an increasingly skilled workforce, developed nations' ability to differentiate themselves is dissolving, and the companies operating in those countries no longer need to pay their workers a premium. The most widespread and lasting impact of the maturation of global labor arbitrage is the decline in real wages in the developed nations. CFOs of U.S. companies can prepare now for a permanent resetting of wages for many workers in the upper salary ranges.

Increased global competition and low pricing power are driving the more aggressive forms of arbitrage: overseas sourcing, offshoring and foreign direct investment. In the IT industry, these practices are already moving into their second generation; Indian companies that took work from the United States and Europe are now offshoring less-skilled jobs to lower-cost locations such as China and Malaysia. IT wages in the United States dropped by an average of 3 percent in 2004.

Although corporations around the world increasingly practice labor arbitrage, most are still reluctant to call it what it is. TeleTech Holdings Inc. is one of few companies that use that term. The Englewood, Colo.-based company operates 66 customer management centers (CMCs) staffed with 33,000 employees spread over 16 countries, including 10,000 in the low-wage regions of Asia and Latin America. "TeleTech was one of the first customer management providers to successfully implement a labor arbitrage strategy more than 7 years ago," says Dennis Lacey, executive vice president and CFO. "Since then, we have expanded our labor arbitrage strategy globally, providing our clients high-quality, lower-cost customer management solutions in various languages and from many countries, including India, Argentina, Canada, Mexico and the Philippines."

Call-center workers in low-wage regions make 10 percent to 12 percent of what U.S. call-center workers earn, according to Datamonitor. That firm predicts wage inflation in the offshore markets and wage deflation in the United States as more call-center jobs move abroad. "Labor-arbitrage customer management centers have a lower cost profile than comparable CMCs in the United States, which lowers the overall cost to serve," Lacey says. Although wages in the United States have flattened, wages in India and the Philippines are rising rapidly. "Wage inflation is a natural component of a growing and evolving industry, particularly in developing countries," he notes.

Let me explain it to you simply:

Firing American workers and hiring cheap labor overseas is what fuels the income inequality problem.

Firing American workers and hiring cheap labor overseas is the primary weapons companies used to bust unions.

It's definitely about trade. As much as or moreso than automation. And it is why many people can't find a good paying job.

Recommendations

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sad that that's what's being talked about because of this ibegurpard Sep 2012 #1
They cant tama Sep 2012 #6
Our son is starting his second year of teaching 3rd grade and after 6 years of school and..... yourout Sep 2012 #2
I thought all teachers in a given state, teaching a similar grade, got paid the same. Honeycombe8 Sep 2012 #3
What state? caraher Sep 2012 #5
Louisiana. But I just checked,and the districts do pay differently. Honeycombe8 Sep 2012 #8
That should be a starting salary............. mrmpa Sep 2012 #28
The master's is only about $1-$2k more. Sad, huh? My sis has a Master's. nt Honeycombe8 Sep 2012 #30
West Virginia is a state........... mrmpa Sep 2012 #32
Not in PA Freddie Sep 2012 #16
Public ed is the last hope for equity and fairness in our country. Reader Rabbit Sep 2012 #4
beautifully said, this should be an OP DonRedwood Sep 2012 #11
What, didn't you know? They make $90,000 per year! backscatter712 Sep 2012 #7
I make 42K --my 8th year teaching with a masters degree DonRedwood Sep 2012 #9
My daughter is a teacher in a charter school in South Florida, RebelOne Sep 2012 #31
I have to admit, I'd love to make what they make bhikkhu Sep 2012 #10
As long as American corporations keep sending jobs overseas, you unlikely to make that much money. Zalatix Sep 2012 #13
There's a lot of blame to go around bhikkhu Sep 2012 #15
Why not? The world has built big wall to keep American workers out. Zalatix Sep 2012 #17
Automation is by far the biggest factor in manufacturing job losses bhikkhu Sep 2012 #20
The trade deficit is adding directly to our national debt. It translates to MILLIONS of jobs lost. Zalatix Sep 2012 #22
Only if you believe the national debt is costing us millions of jobs bhikkhu Sep 2012 #24
So you're in favor of preserving the existing global barriers against American workers. Gotcha. Zalatix Sep 2012 #27
That is a key. Automation has caused a decline in manufacturing jobs in China, too. pampango Sep 2012 #26
"... its not their fault that I don't make more money. ... the problem isn't that they are paid too pampango Sep 2012 #18
I want to thank you for asking exactly the right question.... phantom power Sep 2012 #21
My wife recently retired after 31 years teaching and no, they absolutely do not get paid too much rl6214 Sep 2012 #12
I think we need plcdude Sep 2012 #23
+1 Such basic distinctions -- mean vs median, teachers vs administrators ... eppur_se_muova Sep 2012 #25
Teachers get paid TOO DAMNED LITTLE for the shit they put up with. Zalatix Sep 2012 #14
When I volunteer in my daughter's class, I'm exhausted after a couple hours... phantom power Sep 2012 #19
It all comes back to the absurd way we fund education here. It was a bad idea in the 19th century, Egalitarian Thug Sep 2012 #29
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