Is outsourcing good for the recipient countries?

[Nikia]

I have seen people argue that although it is bad for Americans that their jobs are outsourced that the people in place where the new plant is built benefit. I have heard that this isn't usually true and that most American companies pay their foreign workers at our below the average wage for the area. This doesn't sound too good.
This raises another question. The corporation is saving a lot of money by not having to pay wages that American demand. Why couldn't they pay their workers better than average? My dad works for a coporation with a plant paying poorly in Mexico where they have high turnover. Wouldn't American companies want to pay well (compared to the average wages) to attract and retain the best workers and help the employees afford to buy their products? They could also get locals and the world to like them by causing real economic development.

[Ravenseye]

1. Yes and No

I've had a number of ongoing conversations with outsourcers, and people involved directly in companies overseas, that I know. Sadly I know a number of them.

They consistently claim that it's good for america and the places with these factories, plants, etc. It raises their standard of living, pays them more, makes a stronger local econonmy, and in turn have more money in the long run to spend on american goods.

They gloss over however exact numbers, and I wonder exactly how much they pay in areas that there are lines of hundreds of people outside their factories every day to get a job (they speak of this as if it's a good thing) when I see it as a way for them to treat the laborers however they like. Need a bathroom break? you're fired send the next one in.

They don't care about turnover because for the most part they are low skill jobs, or jobs that are easily trained. In one instance one of them had a factory that actually had people working in the 'training' section for nothing, just to learn how to do it, and wait for a paying position. The products (clothes in this case) they made were for the most part boxed shipped and sold just like the paid workers.

Sometimes this does help, and in the long run I do believe that jobs like this will eventually grow to the point where they won't be able to get around these infractions.

Personally. I think that any goods shipped into America should have to meet the same labor restrictions that exist here. Pay should be scaled to the local economy, so they'll get paid 'less' but I'm more worried about the incipient use of slave labor, and essentially press gangs for our goods.

Buy American.

[Nordic]

2. all you have to do is drive through Juarez, or Nuevo Laredo

and see how those workers are living.

Open sewage in ditches, toxic waste, the workers living in cinderblock huts with no electricity or running water.

It's disgusting.

It's all about money and profits. Nothing more.

Remember, if the minimum wage had gone up the same rate as CEO pay in the last few years, the minimum wage would now be $52.00 an hour.

Kinda says it all.

[rogerashton]

3. The recipient countries do benefit -- for the most part.

1) It is very unlikely that they pay less than the "average wage in the area" in any meaningful sense. Why would skilled workers accept the jobs if they could do better otherwise? And it is hard for people here in the More Developed World to understand just how poor the opportunities for people in Less Developed Countries are. Outsourced jobs may be cheap from the hiring company perspective and still be much better than other opportunities from the point of view of those who are hired. Qualification: they would make more money still if they immigrated to North America and got similar jobs here. That puts upward pressure on the wages they are paid for the outsourced jobs, since immigration will be a relevant alternative for people with the skills outsourcers are looking for.

2) Unemployment rates are typically quite high in LDC's, and the outsourcing jobs probably reduce that unemployment somewhat, making a net contribution to the GDP of the country if they do. Qualification: the contribution to GDP would be much greater if the whole operation were moved to the lDC, rather than just selected outsourced jobs.

Two further thoughts. Goods imported from most LDC's are still subject to some tariffs. To the best of my knowledge there are no tariffs on imported labor. (I haven't checked, I should say -- I could be wrong. But if I am right ....) That would distort the market, making outsourcing look more "efficient" than it really is, because importing labor rather than products avoids the tariff -- a tax break. If so, that needs to be equalized. (As Kerry has been saying, no more tax breaks for companies that outsource jobs.)

Finally. In the long run (according to the free market theory) wages will rise so much in LDC's that they will no longer have the advantage of cheapness. In the research literature, that is called "equalizing up." But it could take a few generations, during which our children and their children will be poorer with each passing year, as, in fact, the working class in this country has been for a generation already.

But don't fret. It's "efficient," because "American" billionaires will be so much richer that it more than makes up the difference.

If you buy that, vote Republican. Better yet, get a brain.

[liberalhistorian]

4. The corporations don't give

a shit about the recipient countries. All they care about is getting away with paying them the lowest wage possible, with no benefits, and without having to deal with pesky unions or workers rights groups, or pesky regulations requiring them to actually treat their workers like human beings, or pesky environmental regulations, or pesky workplace safety regulations or requirements to actually make sure the workers don't get killed on the job and make it home safely, etc. THAT IS ALL THEY CARE ABOUT! They will screw over the workers and the environments of the countries they outsource to as surely as they do here in their own country. THEY DON'T CARE!

[Florida_Geek]

5. Who Fucking Cares

IT person out of work for three years before I got a contract... I could care less how Indian programmers are doing and what new cars they have.

:argh:

[21winner]

6. Who cares about them?

When they attack us with their nuclear bombs maybe us dummy's will understand when we die from the radiation.