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Technology Stocks : Applied Materials No-Politics Thread (AMAT)
AMAT 226.05+1.3%Nov 14 3:59 PM EST
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To: Cary Salsberg who wrote (10317)6/10/2004 11:09:49 AM
From: Sampat Saraf  Read Replies (2) of 25522
 
I have been lurking and reading this engaging discussion about gloabalization, outsourcing and economic benefits. I thought I should add my 2 cents.

IMHO, the premise that migration of white collar jobs overseas has caused severe strain to US workers is flawed. It is not supported by the current unemployment rate of less than 6%. At the height of 1982 recession this rate went to double digits. Also, the number of two-earner families have also gone up during this 20-22 year period indicating that the US economy has created jobs at a healthy pace despite all the hoopla about job transfer overseas. If outsourcing results in exceptionally increased unemployment rate, the political will towards protectionism would increase automatically.

We are just witnessing commoditization of software. As a product matures, the related jobs move from high wage countries to low-wage countries. This happened with Semiconductor manufacturing and is now taking place in software and other white-collor fields.

To maintain its high wage status, US needs to continue to focus on products and industries which have not reached the maturity level of commoditization.

Secondly, as long as US is the major consumer of the products/services produced by these outsourced jobs, any substantial decline in US economy would be harmful to the economies of the countries who depend on the outsourced jobs and these countries will keep on deploying their capital back in US to ensure viability of their major customer.
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