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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Raymond Duray who wrote (232844)	5/15/2005 8:55:50 AM
From: RetiredNow	Read Replies (1) \| Respond to of 1576163

Good article from a respected source. There is another perspective, though. Many economists believe that offshoring will increase profits for companies over the long term, just as FT says. However, many economists also believe that over the long term those profits are reinvested where the most profit can be made. This benefits the company to be sure, but it also results in more and more jobs both domestically and globally. It's a clasic case of investment move frictionlessly to where it is needed most. The alternative is protectionism, where the gov't mandates the hiring of domestic workers in lieu of cheaper offshore workers. What happens inevitably in cases like that is that those companies find themselves in a situation where they are paying higher wages to produce the same goods as their competitors produce offshore for lower wages. These companies then eventually cannot compete on price. The offshore companies then start to take market share which detrimentally impacts the onshore companies. The onshore companies have to downsize to stay profitable and domestic workers lose jobs. So there you have it. Protectionism leads without question to a weakening of our domestic companies' ability to compete which impacts domestic jobs. Offshoring allows our companies to compete globally and also upscales domestic workers jobs as many move into management positions. I've seen this happen in one of the companies I am servicing now. They have offshored most of their IT over the last several years. Many of the domestic H-1 Indians and Chinese went back to their homelands, but the domestic Americans have largely moved into tech lead and manager positions to manage the offshore workers. Those promotions came with pay increases and increased responsibility and prestige. Not a bad deal. So the choice is yours. Protectionism which will atrophy our competitive advantage or allow our companies to transform themselves for the hypercompetitive world we now live in.

To: Raymond Duray who wrote (232844)	5/16/2005 9:11:58 PM
From: TimF	Read Replies (1) \| Respond to of 1576163

who mistakenly view offshore outsourcing as just another manifestation of the beneficial workings of free trade and comparative advantage. In fact, offshore outsourcing is the flow of resources to absolute advantage. 1 - Neither China nor India have a large widespread absolute advantage over the US. 2 - Even when a country does have a widespread absolute advantage and another has a widespread absolute disadvantage, both can benefit by trade. Comparative advantage continues to work even when one side or the other has an absolute advantage. Tim