Well, then, take a look at your own consumer habits!
I keep hearing people complain that so many companies in the tech industry are going overseas to find third party companies to help them with product development. In the circles I happen to travel in, this is particularly prevalent in the software development arena. However, it’s true for just about any industry. Corporations are looking overseas for solutions to their needs.
Why? Well, simply put, price!
Consumers want to buy things that are less expensive. Consumers are always looking for the best deal. Well, that’s fine. But don’t complain about it.
The same consumers who have voted for laws that make it more expensive to produce things in the U.S. in the way of stricter labor laws and environmental protection laws and regulations ironically do not support those same laws when they go look for cheap products made in any number of overseas countries who do not support such practices. If another country has less strict policies about how much their workers are paid and those same workers are just happy to have a job or live in a place where the same amount of money goes further so they can make less to survive, then it is fair to say it is just going to be cheaper to get labor there.
If we, as consumers, force companies to compete on price rather than value; and those companies are true to their board members and share holders and do what they are supposed to do as a company: stay in business and do so with a profit; then, they are going to do what is necessary to stay in business and lower prices to what we demand. And that means going overseas.
So, if you want jobs to stay here, then support the laws you voted for and save your money and pay a little more. Or, don’t and don’t complain.
Tags: consumers, globalization, jobs, labor, overseas, tech industry
April 19, 2008 at 1:26 am
Excellent points, David.
I remember the days when one of the first things people checked when buying a product was the “Made in…” label.
I don’t think anyone gets beyond the price tag anymore.
April 19, 2008 at 1:58 am
Bravo! Kudos!!
April 19, 2008 at 2:15 am
Devil’s Advocate time: Is it really so strict when we say that we shouldn’t allow children to make products when they should be in school? Or that we shouldn’t allow dumping of any kind of waste so that the air and water isn’t rendered unbreathable and undrinkable? We might save on the cost of a pair of shoes now but in the future we will all pay collectively and the society where cheaper labor is available will probably pay sooner and dearer….
April 19, 2008 at 2:39 am
MJK, I think you missed my point.
I am simply saying, if you are going to vote for those laws, then support them by buying things made here under those laws. Not by buying products made in countries where they do not support them. By doing that, consumers are encouraging the very thing they just voted against doing.
So, basically, it’s as if consumers are saying that it is okay for some other country to do it so we can have cheap products, but not our own.
April 19, 2008 at 4:22 am
I think that outsourcing is far more complex an issue than you have outlined above. I think there are so many issues that are being overlooked i.e. immigration.
Since 9-11, immigration controls in the United States have become so much more stricter and many potential candidates for these jobs simply can’t get work visas to work in the US. The result is that company XYZ is forced to outsource that job to a different country simply to hire that particular worker. The NY Times had an amazing article on this. Despite my best efforts to locate that article, I cannot.
I think it was in an issue last month.
But while I think your initial premise may be sound, it just sometimes is not about the bottom dollar.
There are many issues that have been overlooked. That is not to say that you are wrong. But it is to say that it is more complex than you make it to be
Iranian Ajax
April 19, 2008 at 4:50 am
Although I agree. I will often buy the best product (for the job), not the cheapest.
And unfortunately many of those are produced in foreign countries. Even if they are made by american companies. I can’t much help that. Should I buy a more expensive less quality Item?
April 19, 2008 at 5:00 am
I don’t disagree with you Iranian. I can see where there would be some good examples of this in the tech industry especially. Agreeably, there are always other issues.
However, I do know some independent programmers/developers and graphic designers I have spoken to recently that are having trouble charging what they need to in order to make a living because companies are going out of the country just because they need to hire less expensive labor to develop the product competitively. So, they are faced with taking work at a rate where they are having to work many more hours just to stay competitive. Which is another issue I didn’t even get into in my original post.
And that, simply is an interesting dilemma.
When people can’t find work to pay them what it costs to survive because a company must outsource overseas to stay competitive, there is a large responsibility on the mindset of the consumer. Even if that consumer is another business trying to watch its own bottom line. It starts to become a vicious circle. And, we are forcing our own people to take work at a lower rate, thus working twice as many hours (sometimes at a second job). Which, I would think would be against what we are trying to accomplish.
April 19, 2008 at 5:02 am
Hi Caleb.
That is an interesting point. What examples can you give me?
April 19, 2008 at 5:30 am
We are either free market capitalists or we are not. Economics does not stop at the border. As long as labor laws are respected it can only be a good thing.
Although in America, certain sectors who have a lot of pull are protected. Some people would rather inefficient industries get government welfare to keep going, so long as they vote for the right people.
April 19, 2008 at 5:44 am
Ah, Lyndon, good point.
Are we a free market really? If, on the one hand, we have laws that make it more expensive to be in business here, but then force companies to compete on price? It seems we try to have it both ways.
Can we still have a totally free market economy if we manipulate it? That may not be a bad thing, but we should at least address it. Can we have a true global economy if we play by different rules in one country versus another? Is it time for a global set of laws governing labor if we want to have a true global economy with a level playing field? Can we even have laws governing labor across the board when the cost and standard of living is completely different? I don’t know. I’m not an expert. But the questions are worth discussing.
Keep in mind, I’m not passing judgement on the laws we vote for. Just in the double standard we seem to set.
April 19, 2008 at 8:54 am
David,
Your article makes a valid point, perhaps the price of a product does influence whether a product is made in the US or not. I think that now we are ready to pay more for a product if it means keeping the production of that product in the US. With the internet people are becoming more aware of the human and environmental cost of that cheap product from walmart and is ready for the ‘green’, ‘made in the usa’ alternative. Attitudes are changing.
Let me just point out one industry that I have a bone to pick with and that’s the pharmaceutical industry. Working as a software integrator I’ve seen companies like Merc and Sandoz pass over my proposal in favor of an oversees consultants to save a buck or two per hour and then justify this by saying ‘Oh well thats what being global company is all about’ and yet when I want to visit Canada to buy medications at 1/3 the price, then the same pro global economy company complain “Oh well there are safety issues here” .. then proceed to press laws against this practice .. of course for ‘my safety’.. go figure ..
Yes price does come into play, but more often than not, its also about greed ..
its not just the consumer that sets a double standard, corporations sets it when it suites them just as well
JD
April 19, 2008 at 9:05 am
I agree Jon.
April 19, 2008 at 11:26 am
Well said. Here’s a brief passage from an email I received. I apologize if it’s too lengthy.
As you may have heard, the Bush Administration said each of us would get a rebate check to stimulate the economy.
If we spend that money at Wal-Mart, all the money will go to China.
If we spend it on gasoline, it will go to the Arabs.
If we purchase a computer, it will go to India.
If we purchase fruit and vegetables, it will go to Mexico, Honduras, and Guatemala.
If we purchase electronics, it will go to Japan.
If we purchase useless stuff, it will go to Taiwan.
None of it will help the American economy. We need to keep that money here in America.
The only way to keep that money here at home is to spend it at yard sales, since those are the only businesses still in the United States.
April 19, 2008 at 4:12 pm
It’s kind of a catch 22. I understand the cycle, but am not sure how to change it.
The same Americans who are loosing their jobs and who are working for much lower wages are the same consumers who have to shop at Walmart.
I believe that we could increase the number of jobs we lost if we just tarrif the crap out of all imports. Canada has done a pretty good job at keeping as many Canadian made items on the shelf front and center.
Also our global economy is one where it’s not as easy as it once was to find a car manufactured completely in the US, even from US Based Car Companies.
April 19, 2008 at 4:18 pm
Good work, my friend. You have a point of view on the subject that is not popular, yet very well communicated.
April 19, 2008 at 4:51 pm
David,
I completely agree with the points you make in your observation and I understand that you are not wanting to take sides in the argument. Personally, I have no problem taking sides. I think Lyndon’s observation is very important in this discussion – “We are either free market capitalists or we are not.”
Many people claim they want a “free market” but then support things like a minimum wage and the federal bailout of airline companies. They support these measures out the “greater good” philosopy that has no place in the marketplace. What these people fail to realize is that the more control and manipulation that the government imposes in the marketplace, the more it hurts our economy. All one needs to do is look to other countries where governments have heavily manipulated their markets (China, Russia, Mexico, Brazil) and you will find a clear correlation between government control and the health of that nation’s economy. China is a perfect example of this: The more restrictions that the Chinese government lifts from it’s market, the better the economy has become.
April 19, 2008 at 5:19 pm
It has definitely become a catch 22 Tom. I don’t like tarrifs either, it further manipulates the system.
I do feel that many consumers don’t “have to” purchase most of the things they do at the time they do it. (Lets not vilify Walmart. They simply carry what people want. I just use them as an example of where people shop). People could wait a while and buy better products by saving money. This instant-gratification thing we have going is part of the problem.
April 19, 2008 at 5:23 pm
Joel, you make some very valid arguments! Once you start to manipulate an economy, it is no longer a free market in my mind either. Maybe that is fine. Maybe it’s not. So far, it does seem to be making our economy weaker in my opinion as well.
April 19, 2008 at 8:58 pm
Is it really cheaper to outsource? Combine the increased communication and administrative overhead required to implement effectively (which is more suited to entire divisions or product lines), the difficulty in evaluating and retaining quality talent offshore, the declining dollar, and an increased standard of living in outsourcing cost centers, and perhaps professional outsourcing isn’t such a threat to our job market.
April 19, 2008 at 9:28 pm
Casey, you bring up some good points. It probably depends on the industry. It seems to me that when purchasing some products, people simply expect them to only last a short while, but, as they are less expensive, consumers are ok with that.
I’m not saying that outsourcing is necessarily a threat to us in the long run. I’m mostly addressing the fact that people complain about it and why they need to look at their own practices.
I think you are correct in the statement that eventually, once the global climate balances out and people in those countries do expect higher standards of living, the costs may, indeed balance out as well. But, that could take quite a long time.
May 19, 2008 at 4:44 am
We should go back to limiting the amount of what is imported. We allow other countries to send in as much as they want to us but we are limited to as much as they will allow us to send in to their country.