2/14/2005

Start-up Companies Hire Overseas

"Nearly 40% of start-ups in a new USA TODAY study employ engineers, marketers, analysts and others in jobs created in India and other nations", according to the article To start up here, companies hire over there. Drawn overseas by cheap labor many U.S. companies bypass the U.S.A's labor market. Intel plans to increase international hiring. Technology facilitates international transactions. Tech jobs fell in the U.S. from 5% in 2001 to 4.4% last year.

Support for anit-offshoring legislation has increased amid weaker than expected job growth. Canadian labor is 30% below U.S. wage rates. Americans need to accept lower rates to be a global competitor. Globalization provides opportunities to increase market share and decrease costs thereby increasing revenue. Laws should not protect the American worker and discriminate against the Canadian worker as Steven Landsburg points out in his book Fair Play. International companies prosperity and competitiveness will in the long run benefit the U.S. by returning jobs here. Higher paying administrative positions are kept in the U.S. The U.S. is already benefiting from the wealth created by these CEO and senior software developer positions. Consumers benefit from lower prices. Foreign nations benefit from increased employment.

4 comments:

June said...

Outsourcing is not as bad as people say it is. It makes Americans focus on what they do better than answering calls or even engineering. Have you ever wondered why there is no outsourcing problems in middle and upper managment. Apparently Americans are good a running businesses. What they need are people to do the basic functions more cheaply.

I think it will be a long time before American Workers accept lower wages. Do you want to? I know I don't. Outsourcing forces American workers to work harder and be more creative in order to survive. This alone may increase, not decrease the competetive positioning of The United States.

kenny said...

I think that along with higher wages another thing that makes it hard for American employers is the amount of taxes, insurance and benefits it pays to for their employees. For example an employer has to match social security taxes, pay unemployment insurance, pay workmen’s comp insurance, conform to High OSHA standards, vacation pay, Holiday pay, sick pay, 401K contributions, profit sharing, Health care, life insurance and legal fees for when disgruntle workers want to sue there employer. Many Americans expect the world to be handed to them on a sliver platter by their employer for doing very little and taking no risk.

Dr. Tufte said...

-1 for spelling errors in Diane's post and June's comment.

Other than that, I thought the posts and comments were excellent.

C-Dizzle said...

This topic seems to be coming up over and over again. We are now seeing the results of man-made economic boarders put up by the U.S. The old way of thinking in the U.S. was to keep the business here and forget the rest of the world. Never mind the cheaper labor and better products from other countries. It’s plain arrogance that has brought us to the point that we’re at in the world economy. People have finally realized that other countries and their products aren’t as bad as we thought.

As boarders come down in the U.S., there will be an initial rush of employment outsourced to countries with cheaper labor. This cheaper labor will mean cheaper products for you and me.

My last point is that people seem to think that their labor is worth more than it really is here in the U.S. Eventually the U.S. citizens are going to have to lose some of the attitude to compete with the cheaper labor in other countries and accept cheaper pay or lose out completely.