Outsourcing. Why did it happen?

Question

Instead of complaining about it, let's discuss why it happened and what we can do about it, if anything. I really began noticing it when Chrysler went under back in the 70's because of poor engineering, poor planning and of course unions that were breaking them. The K-Car came into being when our government helped them out financially. Remember that? Being a true American, I purchased one of those vehicles only to discover that my engine wasn't even made here in the U.S. Why is that? What are the opinions of others?

Okay, but outsourcing began long before Clinton's era. Why? And what can we do about it?

Answer 1

Outsourcing began for a few reasons. The most important one is it is cheaper to make it there and bring it here.

The question is why

1. The industries that rely on labor unions made promises that it could not keep in the long term. Pensions, health care, etc. They did it at the time because by the time they needed to cash it in, it would be decades.

2. During the past 50 years, the focus of laws have been to give workers more and more rights. By doing so, it made it more and more expensive to do business. You can either have protection of business rights or protection of worker rights. There have been too many entitlements.

3. The government taxed labor in ways that the actual person does not see it directly. Social security has a component that the employer pays on behalf of the worker. There are other taxes and compliance costs that the employer that the employee does not have to pay for.

4. Then add in things like OSHA regulations which are ridiculous. They harass and bother employers all the time.

5. The biggest hurdle to all of this is changing the laws so employees see how much it costs them to work where they do. We need to force employees to write the check for all the expenses relating to their employment. I say do it in October before elections. Have the employer pay them the funds and make the employee write checks for health care costs, health insurance, social security taxes, medicare, medicaid, etc.

The important thing to understand is when people have to pay things they treat it differently than if it is free. Note the free to them is actually passing the payment on to somewhere else. When you have $5 deductables for doctor visits, people will go more than if they they had $30 to pay.

People are so entitled to all they get that it is not likely we will change it.

EDIT: I really feel sorry for those who are blaming a conspiracy on this one. It is all about economics. It costs less in China because it costs so much here. That simple. People can really see the difference between conservatives and liberals/democrats on this one. Some democrats here sit around and blame everyone for their problems, instead of looking inward at what the party has done to force companies to leave.

For all those who say companies are greedy than you must be greedy for going to Wal Mart to buy something cheaper than another store. You want to criticize companies for greed to save money than you are just as guilty.

In a free market system like what we have, if you do not do it, someone else will. That is free enterprise.

Answer 2

Out sourceing -

If we are going back in time about the Unions it was once considered patriotic to buy from union shops in both America and Canada -

"Buy Canadian the job you save may be your own" was a bumper sticker given out by the Unions and an American equivilant for those to the south -


The Unions were fighting some pretty bad working conditions at one point and there existence was crucial

The corpaerations were cying poor as they do today


So - out sourceing - is it a mere act of treason and betrayel ? If so them it can be laid at the feet of the CEO's and other corperate leaders

The wages of the Unions went up and up and slowy the power that the Union had accumulated became corrupt - sound familiar - it should - Any group historically that got too much power abused it - This includes men , governments, unions, corperations , and any other group who's power became bloated with no oposition to enforce balance

So the corperate world went abroad to other markets where labour and resouce were cheap and scientists/engineer's were reasonable -

They sought nations and populations that haven't the moral standards of the Canadian and American markets because some didn't want to have the rule of law get in the way

As this is and was happening the Union not realizing that they needed to pull back went full steam ahead with labour demands that were becoming unreasonable -
They simply forgot that at first they wanted to get children out of the mines and get the worker a 44 hour work week instead of a 60 hr work week -

They now wanted much much more An unceasing list of demands came forward the employer felt a hostage to them

Both sides playing off the other - the corperation said we can't afford the union said exploitation -

The battle continued - the union lost -

In the end the worker lost becuase of the mismanagement of thier own leadership in the Unions

Immigration became the new problem . It was not longer enough for the corperate world to go to the third world they decided to bring the third world here .

Governments jumped on it to make up for short falls in the population demographic - The baby boomers the largest glut in history were not having children - The spread of age groups had to be made up somewhere

Immigrants have children - It appeared the answer

The corperate world used and uses them as a wedge to drive wages down and make the law of little to no effect

I as you grew up in a nation where you can call the government or the police and complain about unlawfull acts

Most of the immigrants we import could do that but they won't . In the nations of their origin the police come to beat you up and the government might take your house for complaining - They won't call - and as a result any ilegal activity goes along unchecked

Your law enforcement as well as ours has relied on the idea that you will call . They don't and can't watch everything - Our police forces need the participation of the public and if they don't get it their hand are more or less tied

The Outsourcing of work resource and so forth has been a strange confluence of idea's to solve pin pint problems

In order to solve this the government must make it hard for corperations to go outside the nation of origin to markets that do not share our standards and laws -

The immigrants must be slowed to a point where we can really have a hope of assimulating them into our society and give them a base understanding of norms culture history and so forth - Too many too fast is suicide

The Unions and workers must continue to stand up for themselves but they can not be allowed to get ridiculous -


There must be an understanding the worker needs the corperation and the corperation needs the worker

It is in the best interest of all to work together and not try to screw each other over a nickel for the sake of an ego trip

Answer 3

You are right, outsourcing was going to happen no matter who was in charge, and NAFTA has created as many jobs in America as it's lost.

The thing is, we live in a global market now, and labor goes to the low bid. Think of it this way: Would you like to pay 50-100% more for everything you buy, and make less at your job, just to make sure everything was made in America? Of course not.

Foreign made good are affordable because they are foreign made. If they were made in America, by you, you wouldn't be able to afford them. Either you'd have to work at or below minimum wage for the company to keep the price down, or it would be twice as expensive. It's a paradox, but that's how it works.

Consider a few things:

While outsourcing takes jobs out of the country, the revenue it produces is part of American economy.

The majority of outsourced jobs are jobs that Americans are unwilling to do.

There is a positive ripple effect in that when some goods are produced cheaply overseas, it creates secondary jobs here. You wouldn't send your Nissan to Osaka for a new muffler would you? That Nissan dealer's garage is staffed with American workers making an American wage.

I don't love outsourcing, but it is a reality. The most important outsourcing concern is one very few people really ever think about. The HIGH END jobs. We are losing more Doctors, Engineers, and Scientists to other countries than we should, and some day it's going to come back to haunt us.

It's not the Indian concierge making a quarter an hour that should concern us, it's the astrophysicist who is going to work for the Indian government, because the American government finds him irrelevant.

Answer 4

Chryslers are not luxury cars. Therefore, the company cannot afford to build their vehichle engines in the United States due to healthcare for their workers, etc... So, they look at China, Japan, etc... cheaper countries that will build the same engine for cheaper. My opinion is to basically think where can you get the most amount of money? If building your engine in China will get you the most money, then build it there. The business world isn't that easy. "Rich business man need to stop being so greedy" is not the way to go. When you found a company you need to start thinking of all different costs. Therefore, companies like Chrysler could not afford to build their engines in the U.S.


I think you made a poor choice of buying a Chrysler back in the 70s in order to help them out. You shouldn't have to feel bad for companies that make poor planning, etc... the goverment already helped them out because they took care of the economy since it was such a large company. You had to think that Chrysler probably employs over 60,000 workers that's why the goverment had to help them out.

Answer 5

Poor executive level management, poor quality control, poor planning and even poorer decisions about the products being produced, just like it still is today. GM putting out a full line of huge vehicles while gasoline is at an all time high, nice move GM. Blaming the unions is nothing more than slight of hand to put blame where it doesn't belong. How many union employees can one CEO pay for for a year with his salary alone? One person making hundreds of millions while the workers make thirty, forty thousand a year and it's the union workers fault? It is nothing more than greed at work. America used to be the manufacturing might of the world, now we are nothing but a third world power when it comes to manufacturing. Look around your own house, how much stuff that you own is made in China, or Vietnam, or Malaysia or some other country where they can pay slave wages? We are destroying ourselves from the inside by putting Americans out of work or making them compete with illegals or cheap overseas labor. One day in the not too distant future it will all catch up to us. We'll be fighting for jobs at McDonald's or Wal-Mart.

Answer 6

lets set the record straight the government only back the loans that chrysler need to become solvent again. if you recall chrysler stock feel to $4.00 a share but two years later it had recovered and was selling at $44.00 a share. yes the unions help create the problem but more than the unions the regulations that the government puts on big buisness is more to blame than the companies moving their buisness' off shore. for a car to be sold as being usa make 65% of the building of the product has to occur in the usa. i thought that for years companies just wanted the cheaper labor that could be had by moving outside of america i found out through books and periodicals that the biggest reason was the government regulating them. in the late seventies gm hired 23,000 workers just do do the paper work required by our government. that is 23,000 non productive workers that got salaries but did nothing to contribute to gm's success. we can't move our health care out of the country so prices for treatment and care keep going up. driven by two things federal regulations and unionized salaries. high cost of gasoline is partly due to the governments regulations and not being able to build new facilities our refineries can not keep up with the demand thus you have higher prices. the government could ease the prices of gas if they recinded most of the regs and allowed more expansion to cover the demand. same goes for the utility companies no new facilities and the existing ones are at peak capacity now but growth has not slowed down. big companies have a profit margin to meet to satisfy their stockholders and they meet them or go broke. you want to blame someone or something look to your government first before you cast stones at companies.

Answer 7

You don't know anything about Chrysler it looks like.
What happened at Chrysler was not the Unions fault , that is the same thing that is happening at alot of companies today. Corporate mismanagement and greed.Blaming the Unions just seems to be an easy scapegoat for white collar types.

Answer 8

as a substitute of being a protectionist and crying with regards to the subject do some thing! substitute and replace your skills and alter into aggressive in the industry. That’s how capitalism works. lots of individuals are making thousands and thousands to billions of greenbacks because of the fact they are as much as this component with the state-of-the artwork in technologies. I’m a working laptop or laptop programmer and have no subject looking jobs. in certainty my earnings has been going up approximately each 6 months. Why? because of the fact I make confident that i'm nicely worth 10 situations extra suitable than an outsourced Indian programmer.

Answer 9

True, outsourcing is not a new idea, but NAFTA is largely responsible for its spread. We cannot change this unless we figure out a way to decrease our costs of living. The only way I can see this happening is if we lower taxes dramatically, but that would require our government to become extremely more efficient in its spending. That's just not going to happen as long as we have our two-party system.

Answer 10

it happened because Americans want the best for cheap prices and in order for Americans companies to do that they have to outsource the manufacturing to other countries.Heres the deal ppl like me manafacturer cars and i get paid $15 dollars an hour while you can pay someone in another country $15 dollars an hour for 10 people that mean cars are cheaper for the consumers because the cost wasn't has high. and we share holders want a huge profit margin so outsourcing works out for almost all of us (except those that lose their jobs).