"Outsourcing seen boosting wages at home: study"

[GreenPartyVoter]

JACKSON HOLE, Wyoming (Reuters) - Take that, Lou Dobbs. Despite much handwringing and political posturing, the surge of job outsourcing, by increasing productivity, has actually helped raise real wages for low-skilled U.S. workers, according to two Princeton University economists.
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They countered critics of outsourcing, including high-profile CNN host Dobbs, who charge that transferring U.S. jobs abroad hurt American workers' well being.

Taking a swing at conventional wisdom, Princeton professors Gene Grossman and Esteban Rossi-Hansberg argued that wages for the least-skilled blue collar jobs had been rising since 1997 as outsourcing boosted productivity.

The professors presented their paper on Friday at the Kansas City
Federal Reserve conference in Jackson Hole, Wyoming. The meeting's theme, "The New Economic Geography," comes at a time when some fear that the United States is becoming trapped in a wages-prices spiral to the bottom by cheap labor in India and China.

http://news.yahoo.com/s/nm/20060825/us_nm/economy_productivity_dc

[marmar]

1. In other news, those same professors have started a fertilizer company...

with all the bullshit they're putting out.

[GOPBasher]

23. LMAO!!

That's a good one! :thumbsup:

[WCGreen]

2. Of course it would.....

Less people doing the same work is going to raise productivity....

[Lithos]

3. Hmmm

So, if the job doesn't exist anymore and they start with the least skilled and least paid ones to move overseas, doesn't that mean for the same industry that the average pay does get better ... for those who remain?

L-

[Grateful for Hope]

13. I don't know, Lithos

I have been experiencing having to work longer and longer hours with no compensatory raise and no overtime, as I am a salaried employee, - sure, my productivity is up. But, at the same time, my hourly average rate has dramatically declined over the last few years along with the quality and quantity of my home life.

In addition, my job has been sent overseas, and, I am merely being kept on to make sure that all my knowledge has been successfully transferred - so, I guess you can say that I am not a big fan of outsourcing/offshoring.

Just today, we lost four employees in my office, and approximately 30 more across the country to layoffs. And, many more got their "30 days" notice today. Meanwhile, offshoring is beefing up.

The sad part of this is that I know so many former IT employees (I am in IT) who are still jobless after running out of unemployment so they are not counted in the unemployment roles. They are losing their savings and their homes.

[Breeze54]

16. Ain't that the sad, fucked up, truth!

"The sad part of this is that I know so many former IT employees (I am in IT)
who are still jobless after running out of unemployment so they are not counted
in the unemployment roles. They are losing their savings and their homes."


That would be me.... :grr:

:hug: to you. It's frigging rough out here, I hope you can hang on.

[Grateful for Hope]

21. You too.

I am sorry to hear how hard you are having it. I hope things break for your soon.

:hug:

[barb162]

47. I know a lot of people in IT too and it's brutal. A lot looked

forever and some wound up with sales jobs or are trying to start their own businesses , just hanging on.

[Lithos]

22. I'm not a big fan of off-shoring

Usually it's a short term business model designed only to appease the shareholders and make the CEO's bonus numbers. What you save in immediate payroll costs are almost exactly the same costs you have to incur in additional overhead for Business Analysts, Project Managers, and additional project burdens from the additional effort it takes in communicating - especially over a 12 hour difference. Given that most companies have never understood the value of upfront analysis and program control and have relied on their IT staff to handle this under the table for years, they usually find that within a short time the quality of the product being returned is either pretty bad or has to be returned time and time again for fixes to missing or incorrect functionality. Given the quicker time schedueles being demanded in today's market, this can result in more projects failing and being cancelled and even longer delays before needed functionality is brought in.


First rule of business - never outsource/offshore anything affecting a core competency. However, IT is often a core competency in that IT is often integral to these core competencies.

L-

[Grateful for Hope]

29. Your observations are absolutely correct

this is exactly what my company has already been seeing. And, what amuses me is that there are at least two contractors overseas who are doing the work I did alone. And, they get help from a "team". So, when you consider that they are paying for at least two contractors to do the work of one employee, I fail to see how this saves them any money at all.

[redherring]

4. I was thinking that maybe low-paid workers lost their jobs

because of outsourcing, then again, that doesn't explain why the unemployment rate hovers around 4.8%, which isn't all that bad.

[Breeze54]

8. That's only the one's they're 'counting'.... n/t

[Lithos]

9. They've changed how they count the unemployed

If I remember right, used to be a real number of people working and not working. Now it's adjusted for those no longer actively "seeking" which usually is categorized as those on unemployment or in some sort of training effort. Otherwise, you are categorized as "discouraged" and not considered "unemployed". The real number has been hovering somewhere around 10% for sometime.

L-

[Breeze54]

10. If you aren't getting a check, you're not counted. n/t

[Lithos]

11. I thought it was for any benefit

Which also included re-training as well. But it is still a sub-set of the real number.

L-

[Breeze54]

15. I believe,

and I may be mistaken, that you have to have an 'active claim', in order to be counted.
I'd have to double check, or you can! ;)
I don't think they're bothering to count the inactive, as far as claims go.

[redherring]

18. Yeah, you have to be actively looking for a job in the last 4 weeks

I just looked it up.
Source:http://www.bls.gov/cps/cps_htgm.htm

Who is counted as unemployed?

Persons are classified as unemployed if they do not have a job, have actively looked for work in the prior 4 weeks, and are currently available for work. Actively looking for work may consist of any of the following activities:

Contacting:
An employer directly or having a job interview;
A public or private employment agency;
Friends or relatives;
A school or university employment center;

Sending out resumes or filling out applications;

Placing or answering advertisements;

Checking union or professional registers; or

Some other means of active job search

[Breeze54]

37. But... how the hell do they count the invisable?!

How the hell do they know if I'm passing in applications?
They don't! If you aren't registered with your local state Employment Office,
how in hell do they count you??? They don't! You have to have an active claim!

Thanks for looking it up. ;)

How the Government Measures Unemployment

http://www.bls.gov/cps/cps_htgm.htm

Where do the statistics come from?

Early each month, the Bureau of Labor Statistics (BLS) of the U.S. Department of Labor announces the total number of employed and unemployed persons in the United States for the previous month, along with many characteristics of such persons. These figures, particularly the unemployment rate--which tells you the percent of the labor force that is unemployed--receive wide coverage in the press, on radio, and on television.

Some people think that to get these figures on unemployment the Government uses the number of persons filing claims for unemployment insurance (UI) benefits under State or Federal Government programs. But some people are still jobless when their benefits run out, and many more are not eligible at all or delay or never apply for benefits. So, quite clearly, UI information cannot be used as a source for complete information on the number of unemployed.

Other people think that the Government counts every unemployed person each month. To do this, every home in the country would have to be contacted--just as in the population census every 10 years. This procedure would cost way too much and take far too long. Besides, people would soon grow tired of having a census taker come to their homes every month, year after year, to ask about job-related activities.

Because unemployment insurance records relate only to persons who have applied for such benefits, and since it is impractical to actually count every unemployed person each month, the Government conducts a monthly sample survey called the Current Population Survey (CPS) to measure the extent of unemployment in the country. The CPS has been conducted in the United States every month since 1940 when it began as a Work Projects Administration project. It has been expanded and modified several times since then. As explained later, the CPS estimates, beginning in 1994, reflect the results of a major redesign of the survey.

There are about 60,000 households in the sample for this survey. The sample is selected so as to be representative of the entire population of the United States. In order to select the sample, first, the 3,141 counties and county-equivalent cities in the country are grouped into 1,973 geographic areas. The Bureau of the Census then designs and selects a sample consisting of 754 of these geographic areas to represent each State and the District of Columbia. The sample is a State-based design and reflects urban and rural areas, different types of industrial and farming areas, and the major geographic divisions of each State.

Each of the 754 areas in the sample is subdivided into enumeration districts of about 300 households. The enumeration districts, in turn, are divided into smaller clusters of about four dwelling units each, through the use of address lists, detailed maps, and other sources. Then, the clusters to be surveyed are chosen statistically, and the households in these clusters are interviewed.

Every month, one-fourth of the households in the sample are changed, so that no household is interviewed more than 4 consecutive months. This practice avoids placing too heavy a burden on the households selected for the sample. After a household is interviewed for 4 consecutive months, it leaves the sample for 8 months and then is again interviewed for the same 4 calendar months a year later, before leaving the sample for good. This procedure results in approximately 75 percent of the sample remaining the same from month to month and 50 percent from year to year.

:crazy:

Each month, 1,500 highly trained and experienced Census Bureau employees interview persons in the 60,000 sample households for information on the labor force activities (jobholding and jobseeking) or non-labor force status of the members of these households during the week that includes the 12th of the month (the reference week). This information, relating to all household members 16 years of age and over, is entered by the interviewers into laptop computers; at the end of each day's interviewing, the data collected are transmitted to the Census Bureau's central computer in Washington, D.C. In addition, a portion of the sample is interviewed by phone through two central data collection facilities. (Prior to 1994, the interviews were conducted using a paper questionnaire which had to be mailed in by the interviewers each month.)

Each person is classified according to the activities he/she engaged in during the reference week. Then, the total numbers are "weighted," or adjusted to independent population estimates (based on updated decennial census results). The weighting takes into account the age, sex, race, Hispanic origin, and State of residence of the population, so that these characteristics are reflected in the proper proportions in the final estimates.

A sample is not a total count and the survey may not produce the same results that would be obtained from interviewing the entire population. But the chances are 90 out of 100 that the monthly estimate of unemployment from the sample is within about 230,000 of the figure obtainable from a total census. Since monthly unemployment totals have ranged between about 5 and 8 million in recent years, the possible error resulting from sampling is not large enough to distort the total unemployment picture.

Because these interviews are the basic source of data for total unemployment, information must be factual and correct. Respondents are never asked specifically if they are unemployed, nor are they given an opportunity to decide their own labor force status. Unless they already know how the Government defines unemployment, many of them may not be sure of their actual classification when the interview is completed.

Similarly, interviewers do not decide the respondents' labor force classification. They simply ask the questions in the prescribed way and record the answers. Individuals are then classified as employed or unemployed by the computer based on the information collected and the definitions programmed into the computer.

All interviews must follow the same procedures to obtain comparable results. Because of the crucial role interviewers have in the household survey, a great amount of time and effort is spent maintaining the quality of their work. Interviewers are given intensive training, including classroom lectures, discussion, practice, observation, home-study materials, and on-the-job training. At least once a year, they convene for day-long training and review sessions, and, also at least once a year, they are accompanied by a supervisor during a full day of interviewing to determine how well they carry out their assignments.

A selected number of households are reinterviewed each month to determine whether the information obtained in the first interview was correct. The information gained from these reinterviews is used to improve the entire training program.

Anybody ever call you and ask; "How ya doin'? Are you working?" :crazy:
And they count 16 year old kids working part-time?? :wtf:

Mutha focking assholes! I don't believe any of the crap they spew! :puke:

:grr:

[12string]

50. The Way They Count

  They revamped the unemployment rate the same way as
inflation.Take housing and energy out of the inflation
index,forget about anyone not actively collecting unemployment
and hey,look at the rosy economy.

[Nay]

52. Once you stop looking for a job, though, you are not counted as

unemployed. There are several other little accounting tricks brought into play in the last few years to keep the official unemployment # low.

[spindrifter]

5. So whose productivity is outsourcing boosting?

I agree with Marmar--they have found the raw material for a great fertilizer company--oops! There are no rubber boots available--they haven't arrived from their country of origin yet.

[CONN]

6. I wonder who funded this research project...

My guess: the Banglore chamber of commerce

[PsN2Wind]

7. So this is what has caused the tremendous growth

in the numbers of people in the middle-class. Yeah, Right!!

[MisterP]

12. Mexico's losing jobs to China, which in turn is now losing them to Vietnam

with mobile infrastructure and job offers, the corpos just have to let the countries bankrupt themselves to create both a desperate mass of labor and "ideal" working conditions

[Stargazer99]

14. Some times you wonder what the hell they use for brains

or is self-denial just fine as long as your getting paid a living wage plus.

[Breeze54]

41. It's a scam sham from the flim flam man!!!

Got it?? :rofl:

[neuvocat]

17. Take a look at what's missing:

there's no reason given for why that's supposedly true.

[barb162]

28. I wonder how many people they really studied.

I think not very many. I think "least skilled" workers as a whole are in way worse shape now than they were when they had decent jobs that are now shipped to Asia.

[moondust]

19. Cigarettes are good for you: study.

Published by the American Tobacco Institute.

[Breeze54]

40. He,he,he!!!

:rofl:

[proud patriot]

20. Meanwhile Manufacturing(flipping burgers) is up

:sarcasm:

[Breeze54]

35. Absolutely!! They LIE!!!!!

Right on proud patriot! :patriot:

Everybody ready to give W his pink slip on September 1st, "IMPEACH" Day??

I am!! ;)

[ninkasi]

24. From what I've read

CEO and the other big shots earn a whole hell of a lot more than CEOs in foreign countries. Let me propose that we outsource that position, and the company would save even MORE. If it's good for the ordinary employees, it should be ok for CEOs, right? Companies can either pay shareholders more, or reduce the price of whatever they have to offer, which has always been the reason big business has given for outsourcing, right? They say they can't stay competitive paying Americans a living wage. Funny, but I haven't noticed prices going down after the jobs are shipped overseas, has anybody else?

[barb162]

31. Prices may go down SLIGHTLY or stay flat

but that slight price decrease doesn't make up for people going bankrupt, losing their houses and medical insurance, for cities losing their tax base becaue of boarded up homes, etc.

[GOPBasher]

25. Another study: "Bullets are beneficial to victims of gunshots."

Right wingers conduct the darndest studies!

[Breeze54]

39. SLAROFLMFAO!!!!

:rofl: :rofl: :rofl: :rofl:

[bd0t]

26. I don't get this article.

Is it saying that by shipping jobs overseas means that the few people left behind working at the company make more money? Is it saying those that were let go to outsource the jobs are making more money? Is it saying the people who got the jobs that were outsourced are making more money?

I know when companies here outsource the jobs to contracting companies, the contractors make 40% less than the employees of the company. I have yet to see someone make money from outsourcing... other than the CEO's.

[barb162]

27. This is outrageous

The fact that they bring up a measly 2% increase in wages over a six year period like it's something positive.

This study has to be Republican -paid.

How can being unemployed and then finding employment (like working two or more crappy jobs with no benefits)be called "boosting wages? A quarter percent a year doen't even keep up with inflation.

I bet these creeps studied middle class jobs too and found horrible stats of professional people, especially engineers and software people, working in part-time retail jobs.

"Least-skilled blue collar jobs" as a category may be the only category where they were able to make some sort of "positive" statement and that consists of wages that don't even keep up with inflation. If they even could have made such a statement for "skilled" or "highly skilled" blue collar" jobs I am sure they would have.


Globalization is breaking the back of the middle class in this country and it has already broken the back of the people who once had high paid manufacturing jobs.

[Elwood P Dowd]

30. Rich Federal Reserve bankers request study to prove their plan is working

Princeton professors deliver. All is well in BushWorld. Fox, Limbaugh, Glassman, Dreier, and all the other outsourcing talking heads now have the proof that outsourcing and free trade have made the USA a paradise for workers.

[TreasonousBastard]

32. I would like to see the actual paper...

because it runs counter to other observations, not just "conventional wisdom."

I don't know much about the specifics of Grossman's work, but he has been working for at least 15 years or so with Krugman's theories on the "New Economic Geography" which now seems to be a buzzword in theoretical circles. Before the kneejerk calling of him an asshole, I'd like to know more.

From the article:

"Those wage gains are "far from exceptional" but not as bad as might be expected based on the improvement in U.S. terms of trade with non-industrialized countries, they said."

My questions--

There seems to an assumption in Grossman's paper that productivity gains automatically mean wage gains. This is a very attractive theory and may have been true at some times in the past, but is definitely not true now. Whether he is talking about aggregate wage gains, specific occupations or industries, organized workers... I don't know. Some may have gotten wage gains, few others have. Most importantly, have the gains exceeded inflation? It seems they have not only not kept up with productivity, but they haven't kept up with inflation, either.

How have they managed to relate any wage gains with offshoring? If you offshore 90% of a workforce, won't the remaining 10% eventually get a raise at some point anyway? How do you differentiate a "normal" raise from one due to increased productivity from offshoring?

And, where the hell did they get their raw data from? Economists are notorious for getting lousy data to work with.

[Jim Sagle]

33. Cheap labor conservative hogwash!

[area51]

34. "Outsourcing seen boosting wages at home: study"

In what alternate universe is this? Offshoring is bad for America; it causes poverty here due to lack of available jobs. Wages are dropping, not rising, and bennies offered are just about non-existent among current jobs.

[barb162]

36. That's right and EVERY study shows that except this one

I think it's bogus or the methodology is totally fucked up

[Breeze54]

42. methodology is totally fucked up? But they use "laptops"!!

ROTFFLMFAO!!! :rofl:

Read my post up thread! They're a bunch if con artists! ;)
As in 'CON-servatists'! But we already knew that!

[upi402]

38. LMAO

:rofl: :rofl: :rofl:
I know what I can do with that paper...
:evilgrin:

[TexasLawyer]

43. Fed Fantasy-fest

They hired a lot of entertainers to come in and entertain the Feds with good news and glad tidings. Here's another happy report from the same meeting:


Harvard's Feldstein Says U.S. Economy Likely to Dodge Recession

By Kathleen Hays and Simon Kennedy

Aug. 24 (Bloomberg) -- The U.S. economy should dodge recession, said Harvard Professor Martin Feldstein, who heads the panel of economists which dates U.S. business cycles. "If I had to make a likely guess, I would say slow growth, but not recession," Feldstein said in an interview in Jackson Hole, Wyoming, where he's attending the Federal Reserve's annual economic symposium.

A slump in housing, near-record oil prices and the highest Fed interest rates since 2001 have prompted some economists to speculate the world's largest economy may slip into recession next year as the economy slows after five years of expansion. David Rosenberg, chief North American economist at Merrill Lynch & Co., has said there is a 40 percent change of such a downturn.

Feldstein, who chairs the National Bureau of Economic Research, said a recession could occur if households made a ``decision to start saving again'' rather than keep spending as the housing market fades. New-home sales in the U.S. fell more than economists forecast in July and the number of unsold houses climbed to a record, the Commerce Department reported today.

"Household savings is now negative and that was driven by the fact that house wealth was up and that mortgage refinancing was very, very appealing," Feldstein said. ``People took that money and they went and spent a lot of it. So if that goes into reverse, that could tip the economy.''

Still, he noted a "lot of positives that could keep the economy moving along." Few imports should help gross domestic product, he added.

<snip>

http://www.bloomberg.com/apps/news?pid=20601087&sid=aQsXCvBzopNo&refer=home

[HughBeaumont]

45. "We're going to win this war yet!! JUST YOU WAIT, LIBS!"

It's hilarious . . . all of a sudden, sound financial advice (saving) equates to "bad for the consumer-driven economy".

What the hell world did I step into and how exactly does one go back to sanity?

[Breeze54]

46. "Run Forrest, run!!"

:rofl: Unbelievable! :crazy:
I might need new glasses after reading that!

• 12 Aspects of UpSideDown Economics •
UpSideDown Economics

http://www.matttaylor.com/public/UpSideDownEconomics.htm



:shrug:

[HughBeaumont]

44. Two PRINCETON Economists . . .

Well, one can CERTAINLY assume that two ECONOMISTS from one of the chief schools of the ruling classes run a balanced report on labor vs capital not FAVORING their own privileged plutocrats; surely, EVERYONE benefits from the benevolence of the philanthropic rich! :eyes:

The "productivity" and "re-training" arguments pro-offshorers love to use are nothing but theoretical straw-men and hyper-assumptive MYTH, respectively. Any monetary cost saved in wages and hours worked immediately gets eaten up in knowledge and data transfer, lost money due to project delays, debugging and communication breakdown (which companies experience frequently), not to mention destruction of the morale of existing workers, which leads to less real production and sometimes absenteeism due to stress.

We don't need to explain what a crock'o'alligator shit "retraining" is. "Retraining" only works if you have career paths on the horizon that AREN'T in danger of following their predecessors offshore. Such an argument is completely ignorant of the fact that no matter how many degrees you get, no matter how many skills you learn, your Chinese and Indian counterparts can get that SAME knowledge, those SAME degrees, and always ALWAYS remain cheaper than you can ever be. And for every one of us, there's nearly ten of them. What we're "competing" against kills us from the start. It's not a knowledge deficit, it's a COST or CURRENCY inequity.

[Raksha]

48. I know the next place I'm going to see this article.

And I know exactly which freeper is going to post it too! There's a guy on another forum who specializes in Bushit happy talk about the "roaring economy." This kind of misleading b.s. is right up his alley.

[Lorien]

49. Gee, my job and those of several hundred colleagues were outsourced

three weeks ago. Funny, I haven't seen a pay raise-or ANY wages-in that time. :eyes:

[WinkyDink]

51. Say what? Oh, they mean for the ones who STILL HAVE JOBS!

My newspaper today has the story that its customer Service Dept is being out-sourced to the Phillippines.
Buh-bye, 50 local jobs! But hey---your sacrifice has raised the wages for others!

[Generic Other]

53. Oh piffle. Princeton's beancounters teach bonehead economics

"wages for the least-skilled...had been rising since 1997..." Were the low-skilled workers they studied all CEOs? Because their wages are the only ones that rise as jobs are outsourced.

No count professors. Got to go to a community college to find econ profs who don't say 2 + 2 = 5.

[Vinca]

54. I must be really, really tired because this is making no sense at all.

If outsourcing boosts productivity, it's not boosting productivity in this country because the work is outsourced. Right? Why would wages for U.S. workers have increased when their jobs have gone to China? Maybe the Alzheimers has set in for good - I'm just not getting it.

[SeaBob]

55. OUTSOURCING

using that logic fucking must boost virginity