• Nov. 26, 2003 | 11:04 AM ET
THE ETHICS OF JOB EXPORTS
Monday’s post on outsourcing linked to an item quoting science fiction author Neal Stephenson on globalization. Stephenson writes about what will happen, “once the Invisible Hand has taken all the historical inequities and smeared them out into a broad global layer of what a Pakistani brickmaker would consider to be prosperity.” The short answer is: nothing especially good for American prosperity.
It’s easy to see why plenty of Americans are unhappy with that prospect, which is why I still think it’s likely to be an election issue.. But what’s funny is that many American liberals seem unhappy about jobs moving overseas.
Why is that funny? Well, liberals are supposed to support the idea of taking money from the rich, and giving it to the poor redistributing wealth to those most in need. And by the standards of most of the world, all Americans — even those who work in factories, or at Wal-Mart — are rich. (Which is why, of course, people from lots of other countries are so anxious to come here and work at Wal-Mart.) An American who loses a job, even if he or she stays unemployed and winds up on welfare, is still rich by global standards. So you might think that the proper liberal attitude toward job exports would be, “Bring ‘em on!” But it’s not.
Blogger Matt Bruce is wondering about that too, taking the side of the brickmakers: “It may not sound like much but at least that hypothetical brickmaker, and millions like him, now actually do get to experience what Americans used to take for granted but what the rest of the world could never taste.”
I’m not sure what I think about this issue. I don’t think that jobs and wealth are fixed — thanks to technology and the spread of democracy and lawful government, the world is a wealthier place overall. But that doesn’t mean that everyone will be better off, at least in a relative sense. And there’s no question that changes that make people feel economically insecure — even those that make society as a whole wealthier — can engender political problems.
I do encourage you to read the comments at the blog posts linked above, where you’ll see a good deal of interesting discussion. This is an issue that probably won’t go away any time soon.
FROM OUTSOURCING TO INSOURCING
Yesterday’s post on outsourcing noted that the trend toward sending work overseas might be a fad that would do little for some companies’ bottom lines. Apparently, Dell Computer agrees, as it’s moving from oursourcing to “insourcing:”
After an onslaught of complaints, direct sales computer king Dell Inc. has stopped routing corporate customers to a technical support call center in Bangalore, India.
Tech support for Optiplex desktop and Latitude notebook computers will be handled from call centers in Texas, Idaho and Tennessee, Dell spokesman Jon Weisblatt told The Associated Press Monday.
“Customers weren’t satisfied with the level of support they were receiving, so we’re moving some calls around to make sure they don’t feel that way anymore,” Weisblatt said.
Because of discounts offered through the University, a lot of my students use Dell laptops. When I mentioned the trend toward outsourcing in my Internet Law class, I got an earful of complaints from students about people with heavy accents, obviously working from scripts that they didn’t understand. Unfortunately, they won’t be any better off — the Dell move, so far, only applies to its corporate accounts, not to ordinary consumers. I wonder, though, if that won’t be next, because the article quotes a lot of customers with very similar complaints.
Over the long term, outsourcing remains an issue. But too many businesses put cost-cutting above everything. Last summer I was talking to a couple of engineers, who told me that their company’s supply chain was driven by cost and nothing else. As an example, they mentioned an oil valve in a jet engine, outsourced to a Chinese company that produced it for $35 instead of the $300 or so that the American supplier charged. The only problem was that the Chinese version failed a lot more often — and when it did, a million-dollar jet engine failed along with it. Though this is a striking example, it’s just that: an example. All over the place, companies seem to be substituting a cheaper, but inferior, product, and pocketing the savings while hoping customers won’t know the difference.
That’s not a good idea, because customers who get angry can go elsewhere, and will. They’ll also share their bad experiences with friends, relatives and — thanks to the Internet — strangers. Cost-cutting is nice, but if it costs you customers it’s a bad idea.
This seems obvious to me. Maybe it’ll be obvious to our captains of industry one day. Hey, Michael Dell is figuring it out. . . . • Nov. 24, 2003 | 8:58 AM ET
MORE ON OUTSOURCING AND EMPLOYMENT
I’ve written, both here and elsewhere, about the likelihood that the outsourcing of high-technology jobs — and other jobs — will be an issue in the next Presidential election. Sadly, the stuff that I’ve written here has scrolled off into the aether, as MSNBC doesn’t archive these pieces (I’m trying to change their minds about that), but you can read the other stuff here (on outsourcing) and here (on outsourcing and job loss from automation). And I’m not the only one interested in the topic. This article from a British publication says (echoing something I wrote here) that I.T. people should consider becoming plumbers. Meanwhile, this article from The Globe and Mail says that too many businesses are outsourcing more out of herd instinct than because it suits the needs of their business.
This post over at the Winds of Change blog ties together an awful lot of threads of this debate, and links a lot of stories on related issues. It’s worth reading, if you’re interested in this topic.
The job-loss issue is a real one. The solutions aren’t so obvious. Protectionism — of which we’ve seen too much from the Bush Administration already — isn’t likely to help. Typically, protectionism winds up saving a few jobs at the expense of others, and at the expense of gouging consumers. Investment in education seems like a better idea, but I’m not sure that American students, or American parents, are really willing to give education the priority it would have to receive to make a difference here.
I have a few other ideas, which I’ll save for a later post. But it seems pretty clear that this is an issue that we’ll be hearing more about, soon.
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