March 28, 2004

Note: Jared Bernstein on "Outsourcing"

Jared Bernstein has a good and thought-provoking piece on "Outsourcing," from The American Prospect:

... The topic was the role of education in a "knowledge economy." Greenspan's testimony offered eloquent, if conventional, wisdom leading to this punch line: "As history clearly shows, our economy is best served by full and vigorous engagement in the global economy. Consequently, we need to increase our efforts to ensure that as many of our citizens as possible have the opportunity to capture the benefits that flow from that engagement… one critical element in creating that opportunity is the provision of rigorous education and ongoing training to all members of our society." True. Education is surely critical. It's just not the only policy solution to our short- and long-term challenges -- and sometimes not even a particularly useful one.

First, the collapse of job creation in this recovery cannot plausibly be blamed on the supposed educational or skills shortcomings of our workforce. The problem isn't the lack of skilled workers; it's the lack of jobs. Don't blame the supply side for the failure of the demand side. Our most highly educated workers are having a historically tough time in the current job market. In fact, the employment rate for college graduates hit its lowest level in 25 years at the end of 2003. This trend is even more pronounced for recent college grads, whose newly minted skill sets should be most in demand. Their real wages have fallen slightly as well, both in 2002 and 2003. That doesn't sound like evidence of a skills gap. Few will disagree with my contention that more education can't help us in the short run. But what about longer-term issues? For example, a more highly educated workforce has been offered as the solution to a new problem: the offshoring of white-collar jobs. (Trotting out this argument was a main reason for the hearing.)

When global competition was confined to manufacturing, our non-college-educated workers were placed in competition with less-skilled workers from countries with far lower wages and similar value-added. Our comparative advantage, it was argued, resided in our large relative stock of skilled workers and our greater ability to produce an increasing flow of such workers. However, some less-developed countries have been sharply increasing their own supply of skilled workers, giving offshoring trends the potential to erode our comparative advantage both in terms of stock and flow. India, for example, is adding about twice as many college graduates to its workforce per year as we are (2.5 million in India versus 1.2 million in the United States). Of these Indian graduates, over 250,000 were "engineering degree and diploma holders" in 2002, compared to 70,000 bachelor's degrees in engineering awarded here. What's more, the 2003 entering class for Indian engineers has reportedly jumped to 375,000, suggesting that the Indian population is responding to the signals of forthcoming global demand in this market. This supply shock threatens to significantly depress the earnings of skilled workers here, who enjoy a very substantial wage advantage over workers with similar skills in less-developed economies.

The education solution assumes that we can increase our skills even further, forever engaging in more highly value-added work. This, the solution implies, will rejustify existing wage differentials in a global labor market with far more skilled workers than were available to American firms just a few years ago. The plausibility of this endeavor depends on how high the bar is raised. If, as has been reported, our firms already outsource radiology, financial analysis, and programming jobs to low-wage counties, can we conclude that our displaced workers need better skill sets? The presumptive logic crumbles when we realize that such workers are already among the most highly educated in our country, if not the world. To accept the notion that they need to re-skill raises the bar for education requirements far beyond anything we've contemplated in this debate...

But--holding real GDP constant--a decline in the wages of high-skill workers is a rise in the wages of low-skill workers (and a rise in profits). Isn't there a chance that the yuppies facing competition from Bangalore will be a highly positive development, pushing U.S. wage levels together and raising the real wages of those at the bottom?

Jared is good, but I'm not sure these issues have been adequately thought through...

Posted by DeLong at March 28, 2004 02:27 AM | TrackBack | | Other weblogs commenting on this post
Comments

"But--holding real GDP constant--a decline in the wages of high-skill workers is a rise in the wages of low-skill workers (and a rise in profits)."

Huh? What about a huge rise in the incomes of those at the very top and a decrease in the wages of everyone else. Which happens to correlate with observations of reality.

Posted by: Dave Johnson on March 27, 2004 10:05 PM

____

As an executive recruiter and consultant in Human Resources, I have seen more highly qualified senior people ($120K+) chronically unemployed (12+ months) than at any time in the last twenty years. Many have left a field where they have over 20 years experience to sell real-estate or run a B-and-B. Some have taken jobs in retail just to make ends meet. Not a preferred choice, but a necessary one.

Offshoring is inevitable. Some have talked about innovation and our willingness to engage in creative destruction as America's great advantages, but I'm not so sure. I'm really curious what things Brad and other economists think might help the US maintain a competitive advantage over other countries.

Posted by: Ned Roberts on March 27, 2004 10:09 PM

____

suspect the concept of human capital has been oversold, especially by those who thought it would protect American wages from low-wage competition abroad. A college education in this country is often nothing more than a credential -- a handy proxy for desire and ambition which employers use to separate the wheat from the chaff.

The idea that falling wages for college graduates is going to boost the wages of highschool graduates and below is bizarre. It's not competition at home that is bothering us, but competition abraod.

Posted by: Luke Lea on March 27, 2004 10:22 PM

____

Agreeing with Dave Johnson, I'll predict that sooner or later we'll approach consensus that it's time to soak the rich and spend the money on building stuff.

I expect that that more people are going to opt to study, say, computer repair instead of computer programming, but, given what I know about economics (very slightly more than nada), I doubt that that will drive up wages for those jobs.

I've got a username, and it's really secret now!

Posted by: godoggo on March 27, 2004 10:41 PM

____

You know, in the end, we don't need to "maintain an advantage" over other countries. If everyone in the world had our amount of wealth, that would be great for everyone.

The problem with all these developing countries seems to be not that they're competing with us, but that they're just stealing our damn jobs instead of making their own. That is, that because they aren't actually consuming anything, they're just taking our jobs, producing the things we produced, except cheaper, taking our money when we buy those things from them, and just pocketing it.

Because they spend no money themselves they create no demand for jobs that didn't already exist.

Posted by: crayz on March 27, 2004 10:43 PM

____

Brad, what would you do if your job could be done just as well remotely by someone in the third world? I'm not being facetious, this is a serious question.

Do you think you'd be able to find another equivalent or better-paying job doing the same thing? Do you think that you'd be able to find an equivalent or better-paying job doing something different, and be happy, even if you don't enjoy the work? Would you happily work in poverty-level retail jobs the rest of your life knowing you're doing your part for global economic efficiency?

Economists need to pay more attention to the individual impact that economic trends have. It's well and good to say that overall the tide is rising. But while some boats are being lifted others are being swamped, and that's not a good thing. (Also, like editors and journalists, economists need to be aware that their profession is not at all immune from third-world outsourcing's impact.)

I know you read science fiction. Read Snow Crash for the atmosphere, the setting. That could be our world in a couple decades.

Posted by: Chris Hanson on March 27, 2004 10:46 PM

____

Brad,

Your own previous posts have discussed about how the lowest rung of workers have had gotten a kick in their teeth from this economic downturn. Now the upper rungs are being affected too. Yes, there may be a wage convergence - at the bottom.

Posted by: Oldman on March 27, 2004 10:48 PM

____

p.s. What's the chance that our guilded class will use its ever-increasing money to buy more, or more-expensive stuff from poor countries?

Posted by: godoggo on March 27, 2004 10:50 PM

____

Today is the first anniversary of my layoff from a highly skilled engineering job. The impact of this so called "creative destruction" is falling on older workers. I keep hearing that innovation is the way out of the job loss that is hitting American workers. Hey, I was one of the innovators and I'm unemployed. I will find some kind of solution, but I doubt that I will ever make again what I made in 2002.

I watch my stepson move from crap job to crap job and I have the feeling that there has been a shift in the system that current economic theory doesn't account for. In physics, scientists know that experimental data that can't be explained by current theory means that a new theory is due. I think we have hit that point economically. I don't care what the economists say, we have moved into new territory.

Google Robert Cringley and see what he has to say about outsourcing. I think he is much closer to the truth than any economist.

Ned,

Offshoring is not inevitable, it is a choice. If there were a truly free labor market I could move to one of the countries that the jobs are going to and compete for a job in an environment where my living cost is the same as my competition. The countries that are receiving the jobs won't let me in.

Posted by: Stuart on March 27, 2004 10:53 PM

____

Good post Dave. My thoughts exactly. The money is not going to low paid workers, it is going to investors and CEOs. We are seeing lots of contract renegotiations of hourly wages moving down instead of up. Cutting wages back to $10 / h is only $20K per year.

Would that Brad were correct about the productivity difference "trickling down". Why do you think John Kerry is in MI talking up job creation policies? 7% unemployment and wage deflation have anything to do with it?

Posted by: bakho on March 27, 2004 10:56 PM

____

"Jared is good, but I'm not sure these issues have been adequately thought through..."

Mr. DeLong I think the person who hasn't thought through these issues is you. Jared Bernstein doesn't say anything which hasn't been stated and re-stated here and elsewhere in blogville for some months. He is facing our conumdrum, not denying it, and I for one am relieved that you are willing to listen. Without people like you addressing economic reality there is less chance any policies will be crafted that will help.

Posted by: camille roy on March 27, 2004 11:13 PM

____

"The problem with all these developing countries seems to be not that they're competing with us, but that they're just stealing our damn jobs instead of making their own. That is, that because they aren't actually consuming anything, they're just taking our jobs, producing the things we produced, except cheaper, taking our money when we buy those things from them, and just pocketing it. "

So what you are saying is they give us cool stuff, we give them electronic numbers. This is a bad thing why?

P.S. anyone want to send me cool stuff for electronic numbers that they just pocket and never try and redeem with me?


Posted by: Rob Sperry on March 27, 2004 11:34 PM

____

One last ignorant comment (intended to continue the motif begun by smarter people of starting with the empirical evidence ): I dunno if BD blogged on it, but I thought that junior Galbraith's recent Salon article on globalism (increasing inequality within all? poor countries, soaring poverty in the free-market ex-Soviet block, overall progress limited to the "reformed socialist" economies of China and India) was real good and maybe relevant.

Posted by: godoggo on March 28, 2004 01:08 AM

____

"If there were a truly free labor market I could move to one of the countries that the jobs are going to and compete for a job in an environment where my living cost is the same as my competition."

Actually, I'm working on doing just that. When I told my Indian tobacconist he laughed and said "So you are outsourcing yourself!"

But it's not a happy long term solution, unless I can convince my father, brothers, sisters, nieces, nephews, sons, and friends to join me. People will never be as mobile as money.

Posted by: Doctor G on March 28, 2004 01:11 AM

____

Sorry, don't know what became of the link: http://www.salon.com/opinion/feature/2004/03/22/economist/index.html

Posted by: godoggo on March 28, 2004 01:12 AM

____

Brad writes: But--holding real GDP constant--a decline in the wages of high-skill workers is a rise in the wages of low-skill workers (and a rise in profits).

Uh, too much Merlo at dinner?

Posted by: bubba on March 28, 2004 01:26 AM

____

This is a somewhat strange position for someone who is in the business of producing knowledge workers. If US companies can outsource the work of economists to foreign countries then why do we need departments of economics in the UC system? Why do California taxpayers have to support the production of knowledge workers that won’t be employed? Brad seems to be taking a position that is detrimental to his own interests as well as his students. I don’t see why outsourcing would be limited to the work products of chemists, physicists, engineers, mathematicians and computer scientists. It should include economists, radiologists, pathologists, biologists and so on. In short, it includes most of the output of our public university system.

Posted by: A. Zarkov on March 28, 2004 01:55 AM

____

Perhaps we should have a moratorium on posts at this site reminding us of the truism that, if all the gods of Olympus were outsourced to Bollywood and made to wear funny costumes, Prof. DeLong would be bereft of his blog. (I'm sure he keeps his lares and penates well-fed with sacrifices.)

Posted by: john c. halasz on March 28, 2004 02:18 AM

____

"Isn't there a chance that the yuppies facing competition from Bangalore will be a highly positive development, pushing U.S. wage levels together and raising the real wages of those at the bottom?"

As someone commented earlier, you must have been drunk when you wrote that.

Friends don't let friends post drunk.

Posted by: former IT worker on March 28, 2004 04:32 AM

____

I think too many people are thinking about this as an elementary trade problem in which we've moved from "no trade" to "free trade" and people are arguing that "free trade" is better.

We haven't changed our trade regime - what has changed is the terms of trade. And, changes in the terms of trade can leave us unambiguously worse off from where we were before. That doesn't mean the answer is "no trade," but people should stop thinking "everything is always good as long as we have free trade."

A worldwide increase in the number of skilled wokers is going to lower the skilled worker wage. It also may have little effect on the welfare of unskilled workers, particularly if unskilled workers consume few of the goods produced by skilled workers.

Posted by: Atrios on March 28, 2004 04:57 AM

____

"As history clearly shows, our economy is best served by full and vigorous engagement in the global economy. "

That is a curious statement, in my view history shows a continuing slide in every measure of the American prosperity. The standard of living is going down, the health and education systems are crumbling as well as the roads, there is no public transport of any note. In the face of all this the senile Greenspan Ayn Rand mouth piece sees that we are best served by our present course.
Absurd, bizarre, no attention to social matters at all

Posted by: slothrop on March 28, 2004 05:31 AM

____

I think we already know what happens when income falls for skilled workers. It also falls for unskilled workers. Real income has declined for low skilled workers over the last 20 years and income for skilled workers has been relatively flat. Where has the money gone? It has gone to profits and to the top 1% (presumably for producing the profits). It would be hard to make the case that income growth among the top 1% is related to improved skills and/or increases in knowledge. Why should we expect that growth in skill and knowledge, forced by global competition, will benefit skilled/knowledge workers in the US? Brad certainly knows that globalization increases the supply of skilled labor available to US corporations and that increases in supply have a predicatable effect on wages. He certainly does not know that falling wages for skilled workers will be redistributed to unskilled workers.

Posted by: Duffold on March 28, 2004 05:32 AM

____

"As history clearly shows, our economy is best served by full and vigorous engagement in the global economy. "

That is a curious statement, in my view history shows a continuing slide in every measure of the American prosperity. The standard of living is going down, the health and education systems are crumbling as well as the roads, there is no public transport of any note. In the face of all this the senile Greenspan Ayn Rand mouth piece sees that we are best served by our present course.
Absurd, bizarre, no attention to social matters at all

Posted by: slothrop on March 28, 2004 05:33 AM

____

Do you think companies which outsource generally more or less competitive than similar companies which do not outsouce?

Assuming outsourcing is to be stopped, how exactly do you propose to stop it?

Posted by: richard on March 28, 2004 05:47 AM

____

Bernstein seems to be facing reality. I would think that re-education would be a solution only in the case where someone has created a completely new class of jobs where there is no existing low-wage competition. Betting on an American doing this seems to be a long-shot.

Posted by: Tim H. on March 28, 2004 06:06 AM

____

Brad:

"But--holding real GDP constant--a decline in the wages of high-skill workers is a rise in the wages of low-skill workers (and a rise in profits). Isn't there a chance that the yuppies facing competition from Bangalore will be a highly positive development, pushing U.S. wage levels together and raising the real wages of those at the bottom? "

Brad, I've got to agree with the others. Is there any reason in either theory or data to assume that low-skill workers would benefit?

And cheap DVD players are only a small-ticket item. Rent, transportation, medical and education costs are the big items in most peoples' lives.

And please note that the erosion of tenure in universities, with many classes now taught by low-paid temp workers, has *not* been accompanied by a decrease in price. Or prices holding steady, or even increasing slowly.

Posted by: Barry on March 28, 2004 06:07 AM

____

Compensation of employees, % of 2001 GDI: 58.2
Compensation of employees, % of 2003 GDI: 56.5

Corporate Profits, % of 2001 GDI: 7.5
Corporate Profits, % of 2003 GDI: 9.6

So, maybe no "lump of wages"?

Posted by: don freeman on March 28, 2004 06:17 AM

____

I'm not really needed here, but I'm unaware of any mechanism whereby a decrease in high-end salaries would cause an increase in low-end wages. It seems more likely to have an opposite effect as gardeners, etc., are laid off.

Posted by: Zizka on March 28, 2004 06:37 AM

____

P.S. I'm not completely oblivious to the argument that Americans and others in the developed world are overpaid. I've lived my life toward the bottom of the American ladder without grievous suffering. On the other hand, no one in the U.S. really has the option of living the way people do in India. My rent and utilities as a low-end American come to over $7,000 a year, which is a middle-class income in some countries.

Posted by: Zizka on March 28, 2004 06:41 AM

____

One point to consider in outsourcing. Many of the "hands on" mfg jobs that are done in the US for $8-15/h are being lost to automation, not to outsourcing. Automation has allowed many companies to consolidate production facilities, so instead of making one product, they make several. These same workers that do hands on work often do not have the computer skills or interpersonal skills to be successful in the type of work that is being outsourced to India and elsewhere. Education is an issue, because the education of the target wage scale workers does not match the needs of employers.

Posted by: bakho on March 28, 2004 07:08 AM

____

There are two issues here that must be distinguished for us to have an intelligent discussion on the topic. The first is the connecton between job loss and deficient aggregate demand. The second is whether any given structure of employment is and should be made permanent.

Take the first. Since 2001 the economy has suffered from a deficiency of investment demand, some of which was the inevitable product of overinvestment and an equity bubble of the late 90s, some of which is self-inflicted. I put the tax cuts at the heart of the second problem. Everyone knows that short of a prolonged recession that nobody wants, the long rates will rise well above current rates. In the late 90s the 10-year bond (I am going from memory here) was trading at 6 3/4 percent. Who apart from those who believe that mortgages will be guaranteed by the Federal Government, is going to make major long-term committments subject to that risk? We have an idiotic fiscal policy to thank for that. It's hard to see any relief anytime soon other than a further decline in the value of the dollar that our trading partners are unlikely to accept.

The second is the structure of the economy. In the best of all possible worlds we would be experiencing the outsourcing of tradables and a restructuring of our economy towards greater production of non-tradables. I'd be quite happy to see all our cars produced by robots (in Detroit or anywhere else) so that the people now producing them could be working in health care and other labour-intensive services that are important to us.

The two issues are linked. If our economy were performing at something like normal full capacity, the jobs would be there by definition. It is not at full employment, and those who lose jobs do not automatically find new ones at rates of pay that are personally and socially acceptable.

The European economy has been in this state for some time. High interest rates associated with the lead-up to the monetary union depressed demand, making the real structural problems there more difficult to resolve than they had to be (they are difficult on any reckoning).

It's the tax cut, stupid.


Posted by: knut wicksell on March 28, 2004 07:17 AM

____

It's personally gratifying to see a consensus evolve towards what I've been saying for several years :-).

Brad, your commentary on Jared's posting was weak -- and you know it!

Both of you can be right. Namely that education is NOT going to help solve this problem, AND that some wage narrowing may occur. However, an alternative to wage narrowing is that even while overall GDP increases, it will become more concentrated. So educated professional wages may fall even as executive, owners of capital, and elite management wages rise sharply. That's the neo-feudal outcome. It will be interesting to live in that neo-feudal society -- lots of interesting jobs as executive assistants, reading tutors, and landscape gardeners.

My recommendation is that we need to move towards a society that mixes full-employment with enjoyable, meaningful and nourishing periods of non-employment and under-employment.

We can start this way by creating 529/401K like mandatory contribution plans to fund periods of under-employment, educational grants, low cost retraining, severing benefits completey from employment, etc.

Politically, we need to learn from the Swedes, the Brits and the Germans, even as we find our own solutions.


Posted by: John Faughnan on March 28, 2004 07:18 AM

____

Plan to Battle AIDS Worldwide Is Falling Short
By DONALD G. McNEIL Jr.

Three years after the United Nations declared a worldwide offensive against AIDS and 14 months after President Bush promised $15 billion for AIDS treatment in poor countries, shortages of money and battles over patents have kept antiretroviral drugs from reaching more than 90 percent of the poor people who need them.

Progress in distributing the drugs, which have sharply cut the death rate in the United States and other Western countries, has been excruciatingly slow despite steep drops in their prices.

As a result, only about 300,000 people in the world's poorest nations are getting the drugs, of six million who need them, according to the World Health Organization.

Experts, advocacy groups and health officials agree that the delays, compounded by inadequate medical facilities and training in very poor countries, are likely to persist unless spending is stepped up sharply.

Early this month, Stephen Lewis, the special United Nations envoy for AIDS in Africa, conceded that the W.H.O.'s ambitious plan to have three million people in treatment by 2005 — announced on Dec. 1, World AIDS Day — was already collapsing from a lack of money. Donations to the Global Fund to Fight AIDS, Tuberculosis and Malaria are now about $1.6 billion a year, barely 20 percent of what Secretary General Kofi Annan said was needed when he created the fund in 2001.

Saying that global contributions come to a tiny fraction of what is being spent on military operations and building civilian institutions in Iraq and Afghanistan, Mr. Lewis added that if the W.H.O. program failed, "there are no excuses left, no rationalizations to hide behind, no murky slanders to justify indifference — there will only be the mass graves of the betrayed." ...

Posted by: anne on March 28, 2004 07:42 AM

____

http://www.nytimes.com/2004/03/28/international/28AIDS.html?hp

http://www.nytimes.com/2004/03/28/international/africa/28KENY.html

For Africa's Deaf and Blind, AIDS Is an Unknown Language
By MARC LACEY

BURU BURU, Kenya — To say AIDS in Kenyan Sign Language requires placing the index finger and thumb of both hands close to the face, which is supposed to be a re-creation of the skeletal appearance of a victim on the verge of death.

In other parts of Africa, other signs are used for the disease. AIDS can be conveyed by pretending to pluck clumps of hair out of one's head. Or by forming the letter A with both hands. Or by running one's fingers down the center of one's torso to indicate extreme slenderness.

Certainly most deaf people across Africa know there is an awful disease out there. But their knowledge is very limited. When it comes to education campaigns and prevention efforts, deaf Africans and other disabled people across the continent have been largely forgotten.

"AIDS is talked about so much in your world," Dominic O. Majiwa, a regional director for Africa at the World Federation for the Deaf, said using a sign-language interpreter. "Hearing people know all about it. But we deaf people often don't get the information."

The problem extends beyond Africa, but it is particularly acute here, where the disease is at its worst and where disabled people are still often shunned, hidden away and considered a curse. .

"These are the most marginalized of all people," said Nora E. Groce, a public health professor at Yale who is studying the problem of disabled people being ignored when it comes to AIDS. "The stereotype that many people have of disabled people is that they aren't sexually active. It just hasn't occurred to many people that they get AIDS, too."

The discrimination against disabled people manifests itself in numerous ways. AIDS education seminars are often held in buildings that are not wheelchair accessible. Deaf people, many of whom are literate in neither English nor Swahili, are turned away from AIDS testing centers because nobody knows how to communicate with them. Education campaigns, often on radio or television, do nothing to reach those who cannot see or hear the message.

"Deaf children grow up with the feeling that they're supposed to be quiet and be hidden away," said Julie Guberman, a deaf Peace Corps volunteer from Chicago who works at the Kibarani School for the Deaf. "They see people's mouths moving. But they feel they're not special enough to be involved in that." ...

Posted by: anne on March 28, 2004 07:45 AM

____

I think that our solution will be protectionism. Employment and opportunity in America will reach critical mass and the voters will demand it.
If I remember my history correctly,
Protectionism may have failed somewhat during the depression, but it helped considerably in the 19th century when the Europeans flooded the U.S. with cheap goods to put us out of business. This situation seems to me to be what is happening now.
The only difference, and it is a HUGE one, is that our leaders (Hamiliton, etc.) knew what was happening and took steps to correct it. Our leaders now (Clinton and Bush) were and are clueless.
I might add, in my opinion, that any attempt to set up a giant world trading zone where living standards apply to all is doomed to fail. Someone will go off of the plan in a big way and the world will suffer for it terribly.
Benign neglect seems to be the best policy here. THe U.S., Britian, Japan, etc. industrialized on their own when they were ready and conditions were there for it to happen. Attempting to create "colonies" of workers in third world countries in an attempt to dominate them is bad policy. What happens when so called American countries take jobs from India and send them to China or South Africa? Blank hits the fan in a big way. Just watch.

Posted by: Hi on March 28, 2004 07:54 AM

____

"In physics, scientists know that experimental data that can't be explained by current theory means that a new theory is due. I think we have hit that point economically. I don't care what the economists say, we have moved into new territory." --Stuart--


Has there been any analysis on the effect of what's been going on in the executive suite? --- Big increases in compensation that are not tied to performance, malfeasance, short term self serving money grabs at the expense of long term corporate viability (a corruption of basic sound business decision making that I assume economists take for granted), egregious golden parachutes, money taken from employee wages that shows up in executive bonuses, the resultant concentration and redistribution of wealth at the top with little return to society.

Posted by: Dubblblind on March 28, 2004 08:04 AM

____

Could be wrong, but Brad seems to be making the bizarre argument that since GDP holds steady, a decrease in one area must mean an increase in all other areas. It would be nice if Brad gave some sort of update or explanation. Empirical evidence would be especially helpful.

Posted by: theCoach on March 28, 2004 08:05 AM

____

A data point from the bottom: My autistic son, who is in his fourties, works as a handiman gofer at a pet hospital in Los Gatos. His work hours have been cut in half and he has lost all his benefits. This is a place where he has worked for his entire working life. It was run by a very humaine vet who had a string of hostpitals in Northern California. I don't have knowlege of this but I assumne the string of hospitals has been sold to a "Vets R Us" corporation and a MBA money squizer has been placed in charge. I also assume that the chain of hospitals will be shortly staffed by people for whom English is a second language and whose residency in the USA is somewhat irregular.
In California I think the bottom is faced with this kind of job oursourcing.
The future holds the opportunity of starting at the bottom and staying there for people much more capable than my son.

Posted by: dilbert dogbert on March 28, 2004 08:06 AM

____

Brad --

If you look at the sidebar over at Electrolite, you'll find an reference to a Wall Street Journal article, which talks quite openly about how investors feel that Costco's pay and benefits for employees are too high.

Since Costco's pay and benefits work out more or less to 'living wage', I think that's at least a strong hint that one of the objectives of the investor class, the folks who can be meaningfully described as 'capitalists', involves reducing everyone else's wages as low as they can possibly go.

The core problem is the expectation of maximum profit, rather than reliable profit; that's the switch that happened around 1970, and that's where things started going to hell. So long as maximal profits are persued, we're going to go right on seeing the general collapse of access to economic choice, wealth concentration, and the dissolution of demand.

It's also pretty strong evidence that wages are not set primarily by economic means. (It'd be damn hard to justify most managerial wages if they were so set.) What we're seeing is a social agreement inside the US that certain people who already have the preponderance of money ought to have all the money.

If outsourcing were doing what it should be doing -- expanding the amount of economic choice available -- it would be one thing; it is certainly doing a lot of that inside India and China, but on a net, global scale, it is not. Outsourcing is being seen as a way to do a fixed amount of work for less money, rather than as a way to power actual economic expansion, increase of choice, and so on. This is yet more evidence that what's really making the decisions is a self-conscious aristocracy, which will -- from history -- always prefer to maintain the same relative share of a shrinking pie to having a relatively smaller share of a larger pie.

Their control isn't absolute, and the Indians and the Chinese people clearly have some strong opinions about what they want, in terms of access to economic choice, but the complete lack of any other rationale, any other argument from theory, for something that isn't profit maximization, is really disturbing.

Money isn't a useful measure of capability; if you look at the change in economic capability of 'most folks' in Anglo NorAm, it's headed downward. Nor are the people currently doing ok likely to keep doing ok, in most cases; what's being broken is the ability of the economy to function as a machine for generating economic choice, and when that goes, you get seventeenth and eighteenth century Spain -- wealth but no prosperity, no possibility of prosperity -- and you stay there.

So, yeah, you're right, if we're talking about an open market and free trade.

What we've got is profit maximization and forced market access, both often persued by extra-legal and extra-judicial means. It's not the same situation, and the appropriate responses aren't the same, either.

Posted by: Graydon on March 28, 2004 08:26 AM

____

"You'll find an reference to a Wall Street Journal article, which talks quite openly about how investors feel that Costco's pay and benefits for employees are too high.

Since Costco's pay and benefits work out more or less to 'living wage', I think that's at least a strong hint that one of the objectives of the investor class, the folks who can be meaningfully described as 'capitalists', involves reducing everyone else's wages as low as they can possibly go."

Important arguement.

Posted by: anne on March 28, 2004 08:36 AM

____

>The only difference, and it is a HUGE one,
>is that >our leaders (Hamiliton, etc.) knew
>what was happening and took steps to correct
> it. Our leaders >now (Clinton and Bush) were
> and are clueless.

I think the issue is more calculated. Our leaders
know what is happening and approve it. In the
past Hamilton etc were interested in the strength
of the nation. Now the elite are openly
creating a system where their strength is
paramount. The social contract is broken. There
is no need to keep things as they are.

Posted by: frozen hope on March 28, 2004 08:39 AM

____

Daniel Drezner writing in "Foreign Affairs" argues for trade and out-sourcing as though the only job-the only benefits that matter are his own.

Posted by: anne on March 28, 2004 08:40 AM

____

Oh, great. So declining real wages are suddenly a *good* thing.

I believe in free trade, but I think I speak for almost all of us when I say, "Fuck that."

At some point, I will cease to care that I can buy a television for super cheap. In fact, cheap televisions may be part of our problem as a society anyway, because it makes us stupid. Yeah, yeah, there's also computers and the internet...

Prof. DeLong, you've got some 'splainin' to do.

Posted by: praktike on March 28, 2004 08:46 AM

____

knut writes
"The European economy has been in this state for some time. High interest rates associated with the lead-up to the monetary union depressed demand, making the real structural problems there more difficult to resolve than they had to be (they are difficult on any reckoning)."

Thanks for drawing our attention to the European experience here. This ties in with the current Sado monetary thread a few pages away.

I agree that the higher interest rates there (and then) did nothing for demand, but (as Roach never tires of telling us) non-American demand is a rare animal.
Would lower interest rates have pulled them out of 'their structural problem'? There are some who argue that not only is their
currency in better shape but their structural problems are more manageable than ours. And you are right, the tax cuts only make the matters worse: more of our consumption feeding their production.
don freeman (and others) point out that the profits of corporations are the driving force behind this 'structural' problem. If Brad is suggesting that the compensation gradient between top and bottom is decreasing, he must be setting this elite ( but not ethically so) group aside.

Posted by: calmo on March 28, 2004 08:50 AM

____

"Brad seems to be making the bizarre argument that since GDP holds steady, a decrease in one area must mean an increase in all other areas. It would be nice if Brad gave some sort of update or explanation. Empirical evidence would be especially helpful."

Don Freeman posted some figures above, Coach. Brad's error seems to lie in equating income loss among "yuppies facing competition" with income loss by the upper rather than middle and lower-middle classes. His use of vague and slightly derogatory terminology ("yuppies") to describe those losing "competitive advantage" is both the problem and the giveaway -- it was never a term used to describe the rich so much as the nouveau riche.

All I'll add to that is that as far as I can tell it doesn't seem to be the young urban professionals who are being hit hardest by this trend. Holders of professional degrees in law, medicine and - to a much more limited extent - business exist in a world of institutionally created social monopolies.

Posted by: whittaker on March 28, 2004 08:53 AM

____

"Isn't there a chance that the yuppies facing competition from Bangalore will be a highly positive development, pushing U.S. wage levels together and raising the real wages of those at the bottom? "

I'm sorry but that's the kind of statement i usually expect to see presented here in quotes, and attributed to someone in the Bush Administration.

Let's see:

Question: So Scotty, don't you think this recent loss of jobs in the young and urban professional classes is problematic? What does the president say?

McClellan: Well the President's view is congruent with those of many top economists that when some employees lose high paying jobs the natural tendency is for the GDP to readjust, spreading its benefits across all levels which naturally leads in the end to better wages for everyone.

Question: So the bad news is good?

McClellan: That is our viewpoint, yes.

Posted by: bryan on March 28, 2004 09:03 AM

____

This outsourcing thread is so gloomy and post-modern, just thought I'd add a ray of sunshine.

Our boys finally did it!!!

After fully twenty years of playing pocket pool and blowing $15B out their tailpipe in Cray time and 3D renderings for DoD program applications, those hyperspace boys just successfully proved their scramjet technology in a live-fire test!

They've created an entirely new arms race of weapons that skip across the noctilucent layer of the upper atmosphere, undetected either by satellite or radar, moving at 5x the speed of sound on a half the fuel:LOX load of a rocket.

Not as fast as our fleet of hugely expensive ballistic missiles, but smaller, cheaper and undetectable until just before impact at two miles per second. Thor's Thunderbolt! No doubt the Osama solution is a hypersonic scramjet bunkerbuster called in by a circling Predator.

Given BushCo's Oceania -v- Eurasia Perpetual War mindset, we can expect a huge increase in jobs for US rocket scientists (but SSBI only please), with a corresponding race by the Russians and Chinese to arm North K's, Pakis & Indians first.

Yeah!!! American innovation works, once you get those lab rats off their fat asses.... Let's see, send the kid to Texas A&M, get him a degree in aeronautics, entry level job at Lockheed, an entire career arming the world with hypersonics.

Yahoo!!! Let the programmers move to Bangalore! Americans will always have rocket science jobs.
Moon-to-Mars!! Then Mars-to-Uranus!! Let the bridges of the world collapse, the sewers crack and spout their putrid essence, water supplies slime up with leached chemicals, the air choke with coal and oil. Our Yankee Peddler still has Sci-Fi and Weapons of Mass Destruction to sell!!!

Posted by: Harry Possue on March 28, 2004 09:35 AM

____

I want to second Graydon's point in a big way. "Reliable profit" vs "Maximal profit". There was a time in this country where the former was favored and the latter was not. Maybe the existence of a strong labor movement had something to do with that. Sure, Wall St. wanted profit, but it didn't necessarily demand the blood of any manager who didn't deliver the greatest possible profit.

Tell me again, why was that regime so bad?

Posted by: Steve Cohen on March 28, 2004 09:42 AM

____

"Could be wrong, but Brad seems to be making the bizarre argument that since GDP holds steady, a decrease in one area must mean an increase in all other areas."

Isn't this mathematically obvious, particularly when you excise the [all] in your statement? If a + b = Constant, a decrease in a *must* imply an increase in b.

On this issue, as usual when it comes to matters of trade, Brad is entirely in the right, and his critics on here are simply displaying their coupling of arrogance with ignorance. Those who argue that outsourcing heralds some sort of massive transfer of wealth to capital owners need to explain two things:

(1) Why the stock-markets show no evidence of factoring in any long-term rise in capital's share of the national income.
(2) Why the professional classes aren't free to invest in the stock-markets themselves (as, in fact, they already do.) If stocks are where it's going to be at, why aren't you all mortgaging your homes to buy shares in HP and Infosys, instead of whining on a blog?

A lot of people here seem to imagine that "Capital" is some mysterious substance only top-hatted fatcats are permitted to own by law. That's the only scenario under which all this doom and gloom makes any sense.

Posted by: Abiola Lapite on March 28, 2004 10:19 AM

____

"India, for example, is adding about twice as many college graduates to its workforce per year as we are (2.5 million in India versus 1.2 million in the United States)."

Well, then, about time for India to attend to the internal poverty problem. There is all sorts of essential work to be done through the world. The need is fiscal programs that foster employment in infra-structure from America to India:

http://www.nytimes.com/2004/03/25/international/asia/25INDI.html

India has a vast primary health care system to serve its billion people, with clinics for every 3,000 to 5,000. But the system is often just a skeleton. New studies have documented the startling, damaging dimensions of chronic absenteeism — and not just in India.

Researchers for the World Bank discovered through large national surveys that medical personnel were absent from their public posts 35 to 40 percent of the time in India, Bangladesh, Indonesia and Uganda, and about a quarter of the time in Peru.

Researchers from the Massachusetts Institute of Technology and Princeton, in a detailed survey of 100 villages here in Rajasthan, in north India, found a no-show rate of 44 percent. When combined with absences for meetings and other work-related reasons, these vital clinics were closed more than half the time.

As the United Nations leads a global effort to prevent millions of deaths from AIDS, tuberculosis, malaria and a range of childhood illnesses, the fissures in public health systems are emerging as a main obstacle....

Posted by: anne on March 28, 2004 10:25 AM

____

None of this reasoning is going to make any sense because it is all full of false categories, granfaloons (nouns without referents), and bogus causalities.

For starters, the notion of "information based economy" is all three. All economies are information based, and have been since the invention of division of labor -- roughly 600,000 years ago, if we accept that there was a flint-knapping pit of that era in Kenya.

That information intensiveness is something new is a pre-Jane Jacobs notion of how economies work, and is incorrect. Settlements exist exactly to process information; "I have fruit, Og has a dead antelope..." Information.

Later you store the odd animal on the hoof, refrigeration not being available. You slaughter the peskier ones first, and the docile ones sometimes give birth. You've invented domestic animals. Information processing.

The dopey goo-goo Information Is New And Modern view of things has all sorts of pernicious effects. One is that it lets people think that productivity increases are a function of white collar workers at work. On the ground you see productivity increases happening all over the place, generally through the increase of intellectual capital as people think up better nails and screws. A walk around any Home Depot or Home Hardware will show you dozens of hand tools -- wrenches and other fastening things, saws and other dividing things, because fastening and dividing are most of what tools do -- that didn't exist a generation ago.

Most of these are made in Korea or China, though some of them were invented in the advanced industrial world. Thus it is not an oddity that "outsourcing" is going on: these countries, like the Japan of fifty years ago, are driving change at the front margin of the planet's productivity increase.

One thing that helps them along, imho, is that they are not blinkered by Western-style techno-blindness. When an American replaces a card-file with a computer the result is often a waste of resources and a decrease in genuine productivity. When a Vietnamese construction worker gets a modern pry-bar, the result can be an instant doubling in that laborer's output.

The former Third World of course needs some computer power. To obtain this they send some of their citizens to the United States. Skill development is being outsourced by the Indian and Chinese economies.

Posted by: David Lloyd-Jones on March 28, 2004 10:38 AM

____

To Brad's original point:
"But--holding real GDP constant--a decline in the wages of high-skill workers is a rise in the wages of low-skill workers (and a rise in profits)."
and Abiola Lapite's algebraic follow up:
"Isn't this mathematically obvious, particularly when you excise the [all] in your statement? If a + b = Constant, a decrease in a *must* imply an increase in b."
The algebra and Brad's argument are sound, but lacking a crucial detail: on a per capita basis, it is not clear at all that the increase in the low end of GDP creates real wage growth. The population at the low end will grow in two ways, depressing any wage increase in the number of jobs in that area. 1) Natural population expansion and immigration will continue to supply plenty of low skilled workers. 2) As the high skilled workers lose jobs that aren't coming back, they may find themselves often taking lower skilled positions, boosting the supply of workers in that area again.

Abiola's point about capital is valid, however. The implication is that we should become owners of our companies to an ever increasing extent. Unfortunately, the companies currently in the market are likely fairly valued; to vastly increase stock ownership now would only push up the stock market to on overly high valuation. Hence the concern that a current few own the majority of the wealth - a state which is unlikely to change any time soon.

Finally, in the quoted article, Jared Bernstein's comments are spot on - I have a college education and an MBA; if I were to lose my job (again), it would be very difficult to find a new one. For what would I be retrained? Should I become a chemist? No - those services could be moved offshore. A doctor? Perhaps, but do I have the 7-10 year time required to do so? At what cost to my potential future earnings? It is my fear that wages and jobs for low and highly skilled works remain constant for the next half century until some greater parity exists b/w our standards/cost of living with those in India and China.

Posted by: Scott on March 28, 2004 10:54 AM

____

by Abiola Lapite: Isn't this mathematically obvious, particularly when you excise the [all] in your statement? If a + b = Constant, a decrease in a *must* imply an increase in b.

Glad you know your arithmetics. We did not miss it - it is wildly irrelevant. Communists in the past assumed a zero-sum game between the labor and the capital. To assume a zero-sum game between high-paid and low-paid workers - that is not even Communism, that's a concentration camp.

Posted by: beanbaby on March 28, 2004 10:55 AM

____

Outsourcing didn't cause the recession and ending (or curbing) outsourcing has nothing to do with curing it either.

Can people agree that the white collar recession is not going to be permanent and that not all the jobs are going to go to India?

India and China are going through a huge boom right now but they don't have infinite capacity. Even if they did, you can't work the same way eleven time zones away from your customer the way you would if you are in the same city. (In some cases, you can re-arrange things so that your customer doesn't mind.)

Why are wages so low in India and China? I mean, if everything is the same, they should be able to earn exactly as much as in the U.S., right? In fact, people in these countries work with a variety of handicaps. Poor infrastructure, lack of social safety nets, lack of accountability in government (yes, even less than in the U.S.) and so on. There are considerations other than how much you pay your workers. As the recession ends, those other considerations become more important. Quality and timeliness count, and there's more to those than the quality of your own employees.

Not everybody is prospering in the outsourcing countries. I mean there's political tensions in the U.S. over winners and losers over trade. That's in the country in the world with the oldest and arguably strongest tradition of modern political institutions. Consider any developing country and the risks of social and political tensions spilling over are that much higher. Nowhere is free of risks, but India and China face huge challenges. You've got to consider those before doing business there.

When Brad talks about a decline in the wages of high-skill workers I suspect he means a decline from the crazy money being paid to people during the bubble. I well remember getting an unsolicited offer to work as a software tester (a field in which I am not qualified) in Silicon Valley for over $100,000 a year. Just because that was what you needed to earn to be middle class there doesn't mean it makes any sense. An adjustment to something more sensible (like, let's say $50 - $60k) hardly represents a threat to the middle class in the U.S. as a whole. (Sucks for the individual who has to take a pay cut, but even in the U.S. it's not a bad salary.)

Back to the original point. If the jobs were there, you'd be talking retraining for a few people directly affected by outsourcing (in most cases, not in something radically different -- we don't all need to become nanotechnologists or geneticists) and salary adjustments for a number of others. All you need for the jobs to be created is enough demand. That will eventually happen by itself (that's the way the business cycle works) although it would be nice if the government could nudge it along more quickly.

Posted by: Christian Murphy on March 28, 2004 10:56 AM

____

"Isn't this mathematically obvious, particularly when you excise the [all] in your statement? If a + b = Constant, a decrease in a *must* imply an increase in b."

Abiola, most of the commenters have been pointing out that the actual empirical equation is more likely to be T = a + b + c. Clearly it is possible to decrease b and increase c without affecting a. You and Brad ignore the existence of c, while several commenters have provided data indicating c is increasing and non-negligible.

Posted by: Russell L. Carter on March 28, 2004 11:03 AM

____

What we need is the sort of job creating fiscal policy that began with Franklin Roosevelt. There is need for all sorts of infra-structure development, but we need an Administration that does not find fiscal policy only a matter of how much richer the rich can should be but a matter of building the American middle class. We had terrific fiscal policy in the 1990s, and sorely need the same now.

Posted by: anne on March 28, 2004 11:14 AM

____

"But--holding real GDP constant--a decline in the wages of high-skill workers is a rise in the wages of low-skill workers (and a rise in profits)."

So, we should all be pleased as punch that supermarket chains in California forced wage and benefits reductions on workers. The better to compete with Wal-Mart. Wal-Mart workers are going to be lots better off, for the losses of Safeway workers. Duh!

Posted by: anne on March 28, 2004 11:20 AM

____

by Christian Murphy: Can people agree that the white collar recession is not going to be permanent and that not all the jobs are going to go to India?

There is no such thing as white-collar recession. There is an outsourcing of US IT and call-center industries. It is not new - it happened before to consumer electronics and largerly to micro-electronics industries. Not all jobs are going to India - some are going to China, Brazil, Russia etc. It is simply cheaper to outsource to India than to Brazil or Russia. Some will stay - but the effect on wages of science and engineering professionals is already turning to be devastating. And since people respond to incentives, US is going to loose its technical expertise in IT area as surely as it has lost its ability to produce consumer electronics.

Posted by: bubba on March 28, 2004 11:22 AM

____

"But--holding real GDP constant--a decline in the wages of high-skill workers is a rise in the wages of low-skill workers (and a rise in profits)."

Good Grief!!!

Posted by: anne on March 28, 2004 11:23 AM

____

The best article on the long-term trends I've seen is Krugman's "White Collars Turn Blue" (http://mit.edu/krugman/www/BACKWRD2.html). He has the following to say:

- Soaring resource prices.

- The environment as property. (We are conditioned to beleive it is a good thing. It is not. The air you breathe, the water you drink, the very space you take on Earth is a property - and you will pay for it if you want to keep on using it.)

- The rebirth of the big city. (Again, you may think it is good. But look at what he writes: "For one thing, high gasoline prices and the cost of environmental permits made a one-person, one-car commuting pattern impractical." This is not a big city as a cultural center - we are back to slums and castles.)

- The devaluation of higher education.

- The celebrity economy. (Absolutely kills middle class. Best example we have is Hollywood - few stars on top and everybody else a waitress.)

This is not a very pretty future. And outsourcing is one of the trends moving us in that direction - as Chinese say we are living in interesting times.

Posted by: bubba on March 28, 2004 11:51 AM

____

Anne: it is perfectly obvious that the imagination of the California union leaders is pathetic. Their workers are losing millions. If the workers contributed that money one time to organizing the Wal-Mart store workers, if they went themselves and pointed out the benefits of membership which they used to have to the serfs at Wal-Mart, if they quit going to Wal-Mart and shopped with local merchants, or even at Target, in other words, if they recognized and acted on their economic interests, they might well have forced a much better outcome for everyone.

Posted by: masaccio on March 28, 2004 12:04 PM

____

It used to take a skilled programmer with HTML programming knowledge to make a web page. Now it is possible for grade school kids with no programming knowledge to make a web page. When the amount of training required to perform a skill declines, the value of that skill will decline. This is what we are seeing in the tech world.

MFG is a different story. Steel parts mfg were hurt by steel tariffs. Now steel prices are through the ceiling. Has anyone noticed?

It used to be only CA saddled with high energy prices. Now it is the whole country.

The lower value of the dollar makes finished US goods more competitive, but the raw materials and inputs are more expensive.

Posted by: bakho on March 28, 2004 12:15 PM

____

slothrop: "That is a curious statement, in my view history shows a continuing slide in every measure of the American prosperity. The standard of living is going down, the health and education systems are crumbling as well as the roads, there is no public transport of any note."

Not every measure. The problem with talking about "prosperity" and "standard of living" is that there is no rigid, one-size-fits-all definition, and everybody defines them to something different. For whichever definition, many components of it have improved (better quality for many products, better healthcare, less environmental pollution -- in the US, that is, pollution now takes place in the countries producing for the US). On the other hand, employment has become more demanding and invasive (effective increase of the length of the work week, more fulltime double-income households, longer commutes (?), more labor market volatility and unemployment risk, etc.). And the gap between people who can afford the improvements and who cannot has increased.

In the aggregate, I'd say the perceived total quality of life has indeed gone down, as the material improvement has come at a loss in peace of mind, and the spare time in which we are supposed to enjoy all of those things. But maybe people in the 20's said this about the 1900's, in the 60's about the 50's, etc. I'd still uphold the spare time thing, though.

What do you think?

Posted by: cm on March 28, 2004 12:35 PM

____

"But--holding real GDP constant--a decline in the wages of high-skill workers is a rise in the wages of low-skill workers.", Brad loves and understands Krugman's theories!
"(and a rise in profits)", sure, but only with a "common-man's-close" fiscal policy increasing the "global" demand-function.
What are the advantages of "outsourcing" as a function of the current interest-, and exchange-rate?
To Bakho:
"It used to take a skilled programmer with HTML programming knowledge to make a web page. Now it is possible for grade school kids with no programming knowledge to make a web page. When the amount of training required to perform a skill declines, the value of that skill will decline. This is what we are seeing in the tech world. "
Excellent!

Posted by: Groupie on March 28, 2004 12:47 PM

____

Zizka: "I'm not really needed here, but I'm unaware of any mechanism whereby a decrease in high-end salaries would cause an increase in low-end wages."

I believe the (flawed) thinking is that lower-income people have to pay for higher-income based products and services, and reducing higher incomes will reduce the prices of those products, increasing their real-term income. Sounds like a classical supply-side argument to me. Brad, please confirm or deny.

Posted by: cm on March 28, 2004 12:59 PM

____

It used to take a skilled programmer with HTML programming knowledge to make a web page. Now it is possible for grade school kids with no programming knowledge to make a web page. When the amount of training required to perform a skill declines, the value of that skill will decline. This is what we are seeing in the tech world.

Value is relative to supply and demand; value doesn't depend on how long it took you to learn a skill, it only depends on the ratio of practioners to available positions and the selling price for their output.

From a more technical perspective, the leading quote was obviously written by someone who doesn't know polymorphism from polyester; slapping html together is vastly different than building a distributed asynchronous processing system or hacking device drivers.

Posted by: djs on March 28, 2004 01:06 PM

____

Brad wrote: "But--holding real GDP constant--a decline in the wages of high-skill workers is a rise in the wages of low-skill workers (and a rise in profits)."

That profits caveat is kinda big. And are wages and profits the only components of GDP - is there something else that could pick up a share.

And how does borrowing figure into it?

Posted by: Ian Welsh on March 28, 2004 01:08 PM

____

Sorry; there should be quotes around the first graf of my previous post since it was quoted from bakho.

Posted by: djs on March 28, 2004 01:08 PM

____

Hopefully, it's not too late for a bonafide yuppie to post to this thread, but I thought I'd post from the perspective of one of those in question. Maybe a case study would better inform the discussion here, and give it a face.

I'm 21, and have been working steadily in my current higher-ed IT research job for three years now, so I've got some of the least exposure to outsourcing available in my profession. I'm not salaried, but hourly; while both my employer and I would like me to be salaried, the structural costs for them employing me (health insurance, etc.) are so prohibitive I would make far less (to the tune of 25-35%). As it stands, I think I land in the 80th percentile of incomes in America, or so.

I'm doing my best to accumulate enough savings to take place in the capital markets, but the amount I have in savings relative to my potential income stream is miniscule. Even looking for a condo I can afford in Toronto, where my fiancee is attending college -- despite being paid in American dollars -- has been demoralizing at best. In all likelihood, I'll end up paying rent and failing to build net worth due to the current housing market.

The uncertainty of the my environment weighs very heavily on my decision-making. I don't spend nearly as much as I could and save heavily because I don't have much faith in my job security. Despite all this, I'm much better off than my friends, many of whom failed to complete any college. Of the ones who did, it's taken on average over a year to find even a poor job.

I'm not sure how a situation like mine contributes to the general economic health. Maybe someone better-equipped could inform me.

Best regards, all.

Posted by: Nate Klingenstein on March 28, 2004 01:11 PM

____

"Glad you know your arithmetics. We did not miss it - it is wildly irrelevant."

Only if one is ignorant enough to imagine that America's GDP is actually shrinking, all evidence to the contrary notwithstanding. I'd stick to collecting beanie babies if I were you.

Posted by: Abiola Lapite on March 28, 2004 01:11 PM

____

"Abiola, most of the commenters have been pointing out that the actual empirical equation is more likely to be T = a + b + c. Clearly it is possible to decrease b and increase c without affecting a. You and Brad ignore the existence of c, while several commenters have provided data indicating c is increasing and non-negligible."

This is fine in principle, but I don't see where the evidence is that there's a factor C worth worrying about. If national income isn't going to wages or capital, where else could it possibly be going? Can you point out for me the commenters who've provided data as you indicated? I'm looking, and I still don't see them.

Posted by: Abiola Lapite on March 28, 2004 01:17 PM

____

Looks and smells like a recession to me. More specifically, it looks like the recession in the early 1990s with a longer hangover period. If outsourcing is to blame, employment in industries where outsourcing is not a factor should have held steady.

Kash over at the angry bear blog wrote on the subject in February
http://angrybear.blogspot.com/2004_02_15_angrybear_archive.html
(Outsourcing White Collar Jobs: How Big a Problem? - a little over halfway down the page)

Posted by: Christian Murphy on March 28, 2004 01:26 PM

____

Abiola Lapite sez: This is fine in principle, but I don't see where the evidence is that there's a factor C worth worrying about. If national income isn't going to wages or capital, where else could it possibly be going? Can you point out for me the commenters who've provided data as you indicated? I'm looking, and I still don't see them.

Get serious, Al. You're trying to portray A as wages and B as capital, when we both know that from the very start of this discussion, A is wages for high-end skilled workers and B is wages for low-end unskilled workers. C, sort of a "cosmological constant" tacked on to the equation to make it less glaringly dissonant with the economic reality one can't help but see in the local paper's classified ads "jobs" sections, is, of course, radically increased corporate profits and the swelling unearned skimmings of the investing class - quoting don freeman above:

Compensation of employees, % of 2001 GDI: 58.2

Compensation of employees, % of 2003 GDI: 56.5

Corporate Profits, % of 2001 GDI: 7.5

Corporate Profits, % of 2003 GDI: 9.6

Posted by: W, Kiernan on March 28, 2004 01:38 PM

____

bakho: web page design never required a skilled programmer. This is one of the myths that the field propagated, which hurt the high-skill programming positions' reputation.

Posted by: frowning clown on March 28, 2004 02:08 PM

____

Masaccio

Organizing Wal-Mart would be a wonderful union gain, but the company is more powerful than the supermarket chains and has been successful in resisting unionization in every venue. Remember, the workers were going to strike selectively, but the chains "organized" and locked out the workers who were not striking.

Posted by: anne on March 28, 2004 02:23 PM

____

bakho writes: "It used to take a skilled programmer with HTML programming knowledge to make a web page. Now it is possible for grade school kids with no programming knowledge to make a web page. When the amount of training required to perform a skill declines, the value of that skill will decline. This is what we are seeing in the tech world."

Uh, no. It never took much skill.

And HTML is not in any sense a form of programming.

Posted by: Jon H on March 28, 2004 02:28 PM

____

" Compensation of employees, % of 2001 GDI: 58.2"

2001 was a year of recession. Not to mention one where we suffered a devastating loss on 9-11.

Posted by: Patrick R. Sullivan on March 28, 2004 02:30 PM

____

When there are big moves in the labor markets there are big problems - just because labor markets are inherently friction-laden. People don't want to move (Europeans), people are forbidden to move (Mexicans to USA), labor can only be traded spot on short-term contracts (no slavery), nominal wage-changes face a de-facto non-negativity restriction, etc...

When we have payed the costs for moving the market over these frictions, we will hopefully all be better off. But no one should expect to keep her or his rank in the global income distribution. With less barriers to education, guess who will lose in rank...

Posted by: Mats on March 28, 2004 02:36 PM

____

by Abiola Lapite: Only if one is ignorant enough to imagine that America's GDP is actually shrinking, all evidence to the contrary notwithstanding. I'd stick to collecting beanie babies if I were you.

That's stupid and obnoxious. If I called you a nigger mofucka, you probably would not enjoy it, right?

Posted by: beanbaby on March 28, 2004 03:10 PM

____

"If I called you a nigger mofucka"

You already have, and you've shown just what sort of moronic bigot you really are at the same time. The Internet is just one big playground to idiotic, cowardly, little maggots like yourself.

Posted by: Abiola Lapite on March 28, 2004 03:18 PM

____

"Get serious, Al. You're trying to portray A as wages and B as capital, when we both know that from the very start of this discussion, A is wages for high-end skilled workers and B is wages for low-end unskilled workers. C, sort of a "cosmological constant" tacked on to the equation to make it less glaringly dissonant with the economic reality ..."

No, YOU get serious. I DON'T "both know" anything of the sort you describe in common with you. Tell me which textbook you got this fancy model of yours from, or, failing that, give me a rigorous run-down of how your little system works. That "cosmological constant" you're going on about smells a lot like a giant "fudge factor" to me ...

Posted by: Abiola Lapite on March 28, 2004 03:21 PM

____

frowning clown, Jon H: skills for web design

A little bit less arrogance, please. What you need to know to write HTML and perhaps Javascript code, or CGI scripts and database interfaces, and the understanding how HTTP and TCP/IP networks needed for that I would call a skill, albeit perhaps of a different kind and perhaps more easily obtainable than the theoretical background needed for hardcore software engineering.

That is, if we are not talking about the part where you click together the page content with Frontpage or such, although even that requires non-trivial skills to do it well.

And of course, in each skill set you have a gradation of lower to higher competence levels. What do you think how many lousy "high-skill" programmers are out there?

Posted by: cm on March 28, 2004 03:25 PM

____

"Corporate Profits, % of 2001 GDI: 7.5"

"Corporate Profits, % of 2003 GDI: 9.6"

Why aren't we seeing the S&P 500 rally of a lifetime then? Why aren't you borrowing everything you can and selling every item you own in order to invest in the stock market?

The revealed preference of most of those whining to play it safe investment-wise, even as they moan and groan about capital getting a bigger share of the cake, tells me that even they don't take the crap they're peddling seriously.

Posted by: Abiola Lapite on March 28, 2004 03:26 PM

____

"Isn't there a chance that the yuppies facing competition from Bangalore will be a highly positive development, pushing U.S. wage levels together and raising the real wages of those at the bottom?"

I know of no historical precedent supporting Mr. DeLong's panglossian expectation that the impoverishment of the middle class ("[a] highly positive development") will raise the wages of the poor. Common sense and experience lead one to expect quite the opposite.

I also find it astonishing that a free trade theologian like Mr DeLong could make this remark on the convergence of wages between the poor and the middle class in the US and at the same time deny one of the obvious consequences of globalization: the convergence of high US wages with the lower wages in most of the rest of the world - with at least some of the convergence arising from a decrease in US wages. A convergence that is only now starting to be felt, but will almost certainly increase over time.

Posted by: Jeffrey Miller on March 28, 2004 03:36 PM

____

Mats: I see rather more barriers to (higher) education, not fewer. Only so many educational resources (teachers, labs, libraries) are funded and the funding is even declining so that colleges have to raise tuition charges or sell out to corporate money, and prospective students who cannot get on a grant program have to work for a living and go to school on evenings, which is quite a barrier. A number of my coworkers tried to get a higher degree and couldn't go through with it (some were fortunate enough that during .com times the employer had to try harder to accomodate educational needs).

Posted by: cm on March 28, 2004 03:36 PM

____

I see Abiola's (and Brad's) point - falling high-skill wages IS a rise in low-skill wages, in a simple-enough framework with enough assumptions. The important part is the holding constant of real GDP. Low-skill workers purchase items produced by high-skill workers - declines in the pay of the high-skilled leads to lower prices for those goods, and higher REAL incomes for everyone else. The a+b=c also depends on the consumption bundles of the workers in question, but could work, in aggregate.

I think what some are speaking of is the returns to capital - that there isn't just low and high wage workers, but an owner/investor class that could reap the gains from high-skill wage reduction and outsourcing, precluding redistribution to other classes through lower prices.

This must be where economists apply the assumption of zero "economic profits" in the long run. Returns above the time value of money and risk premiums (rents) must be competed away over the long run. I wonder if the long run ever comes, though - in a sufficiently dynamic environment, could the churning of creation and destruction give rent-seeking infinite opportunity, if capital is mobile enough?

The stats quoted above, for instance, show increasing returns to capital, and (if deflation adjusted) lower standards of living for all workers. But, this is the short run - anyone know what longer time frames show, empirically? Don't fairly stable capital/labor distributions obtain over time?

I'm a leftie, but I don't understand the resonance of the outsourcing issue. Don't get me wrong, I see a long-term stagnation, as the structural adjustment takes place, and a lower place in the world economic system for the US. But I'm not convinced protectionist policies could avoid it.

Posted by: belaborer on March 28, 2004 03:57 PM

____

Abiola Lapite: "If I called you a nigger mofucka"
You already have, and you've shown just what sort of moronic bigot you really are at the same time. The Internet is just one big playground to idiotic, cowardly, little maggots like yourself.

Not yet, but I am happy to do so at this time. I am not going to use the word "nigger" though - you are just a mofucka, can of piss, nothing more.

Posted by: beanbaby on March 28, 2004 04:04 PM

____

"Not yet, but I am happy to do so at this time."

What if I hypothetically called you a filthy little rapist serial-killer? Just "hypothetically" of course, I haven't *actually* called you one yet ...

You're an idiotic little racist maggot, and no amount of weaseling will get you off the hook on that score.

You contemptible little cockroach - what are the odds you'd have the guts to mention the word "nigger" if you knew you were going to come face to face with me? I'd beat you to within an inch of your life if you did, you worthless little son of a bitch. Out yourself if you've got any balls and we'll settle this one-on-one at the earliest opportunity, disgusting little racist vermin that you are.

Posted by: Abiola Lapite on March 28, 2004 04:12 PM

____

After having seen beanbaby's "comments", I can suddenly understand some calls for censorship we had some time ago (not that I would support them though). How pathetic.

Posted by: cm on March 28, 2004 04:19 PM

____

Robbing Peter to pay Paul is never a good idea.

Posted by: Lynne on March 28, 2004 04:23 PM

____

Abiola: insults

Take it easy, man. In school those who would not allow others to challenge them into brawls used to use the phrase "only humans can insult me". You should not get suckered into such low arguments. Why don't you just ignore him and stick to the subject matter?

Posted by: cm on March 28, 2004 04:24 PM

____

Abiola Lapite: You contemptible little cockroach - what are the odds you'd have the guts to mention the word "nigger" if you knew you were going to come face to face with me? I'd beat you to within an inch of your life if you did, you worthless little son of a bitch. Out yourself if you've got any balls and we'll settle this one-on-one at the earliest opportunity, disgusting little racist vermin that you are.

No, I do not want to use the word "nigger" because you defile the race, you pervert. Meet me at the top of Empire State building tomorrow at 10am and be ready to take a flying leap, blowhard.

Posted by: beanbaby on March 28, 2004 04:25 PM

____

This is the point where I leave the party, cuz it's gotten all uncomfortable. But my civic duty compels me to comment - beanbaby: sure, Abiola suggested you stick to collecting beaniebabies, uncalled for I think, or maybe just his sense of humor. But you dropped the N-bomb. And you used it precisely because of the power the word has, it's not just another type of insult.

Seriously man, you suck.

If someone said something equally offensive to me, or someone I cared for, I'd have blown up like Abiola did, or want to. I'm getting pretty pissed off thinking about it, actually.

WTF.

Posted by: belaborer on March 28, 2004 04:48 PM

____

cm:
"
A little bit less arrogance, please. What you need to know to write HTML and perhaps Javascript code, or CGI scripts and database interfaces, and the understanding how HTTP and TCP/IP networks needed for that I would call a skill, albeit perhaps of a different kind and perhaps more easily obtainable than the theoretical background needed for hardcore software engineering."

All that was mentioned above was HTML, not the rest. HTML is simple. I never bothered to spend much time on it because it was clearly going to be done by tools eventually. Nobody learns RTF markup, they just let WordPad.exe do it. So why learn to do hand HTML coding?

People with the skillset you speak of are not the people Bakho was speaking of, which is what I responded to.

Posted by: Jon H on March 28, 2004 05:05 PM

____

Jon H: No offense intended, of course, and I don't know what profession you are in. Maybe my wording was a bit harsh, but I still stand to the meaning.

I was reading a bit between the lines; "web designer" is a fuzzy notion that probably has considerable overlap with "web developer" which I was really thinking about. I was never in that business, so I don't know where the separation was/is in practice.

For reference, here is what bakho originally said: "It used to take a skilled programmer with HTML programming knowledge to make a web page." Now that admits a range of interpretations, including yours and mine.

On a broader note, I think it is not at all helpful to think of certain occupations that don't require a college degree or even less as lowly and "every idiot can do that". During my college I used to work for a number of weeks in nursing taking care of people in a facility where handicapped or demented people where warehoused and many had to spend a considerable part of the rest of their life lying in a bed and performing all of their bodily functions there, if you get my drift, and a bunch of them died while I was there and we had to prepare them for the relatives. That's a hard and important job, and more of this will be required in the future in the developed countries and elsewhere. How people look at it will determine what people the field attracts, and how _they_ will look at their job. Similar for street and building cleaners, litter pickers, etc. that many people look down at, but without which we would suffocate in filth. I could go on, but let me just say I find it objectionable when people think that holding a position they obtained in good part by good fortune allows them to denigrate others that perform useful and productive jobs that require less training.

Posted by: cm on March 28, 2004 06:19 PM

____

beanbaby wrote: If I called you...

Maybe we can ask Brad to ban this guy. Whatever some people think about the others' positions, name-calling and physical threats stink.

Posted by: bubba on March 28, 2004 06:38 PM

____

Anyway...

I don't pretend to understand the ups and downs of the stock market, but I do understand that part of upward redistribution of wealth is the result of executives paying themselves increasingly enormous salaries (much of which they use to buy stocks) as the cut wages or lay of workers or outsource. No idea how this compares to profits from playing the market.


Posted by: godoggo on March 28, 2004 06:38 PM

____

Another vote to ban that troll known as beanbaby.

Posted by: camille roy on March 28, 2004 06:42 PM

____

I suspect that the lack of a crazed stock market rally (not that it's doing that bad) may have something to do with the big crash a few years ago. What little I know about playing the market is that it's largely about guessing what others are going to do.

Posted by: godoggo on March 28, 2004 06:43 PM

____

The unionizing issue requires more thought, but as long as beanbaby is here, the thread is too unpleasant.

Posted by: masaccio on March 28, 2004 06:53 PM

____

The phenomenon of outsourcing is not exactly new and I do think the sudden concern about it, as if the sky is falling in, which will only happen due to forces and sources of much larger magnitude, is a bit exagerated. Of course, some of us working stiffs, who've long dealt with the problem and know plenty of people, who've lost good union jobs and seen their living standard and retirement prospects permanently diminished, can not help but feel some satisfaction/schadenfreude at the moral outrage/whineyness on display when it affects some of the higher reaches of the ever-elastic "middle class", though that is precisely what gives the issue now political traction. And I, for one, don't see why a computer programmer with an M.S. should be entitled to a higher salary than a high school teacher with an M.S. or, for that matter, just to stick my chin out for rightwing "moralists", a social worker with a M.S.W. (I said no entitlement, not no reason, though certainly no moral reason.) But the outsourcing of IT and other professional or paraprofessional work seems to me only a symptom of broader questions about "free trade" and its meanings and implications.

I think I am not alone among non-economist, semi-literate posters at this site in attempting to puzzle out exactly what is the relation between international trade and international "labor arbitrage". Clearly the export of machinery and other capital goods from advanced nations to developing ones falls under the standard doctrine of comparative advantage. But one would expect that developing countries would use such capital imports to develop their internal, domestic markets and not just export to advanced, rich economies. Further, trade is supposed to balance out over the long-run, such that all countries can not follow strategies of export-led growth and, if there is an international regime of free trade, one would expect developing middle income countries to expand their trade with each other and not just export to the rich developed world, as the "terms of trade" would presumably be less steep. But "labor arbitrage" would not simply be a matter of the wage/productivity gaps between different national economies and their labor markets. It would also be a matter of the organizational capacities and strategic resources of the arbitrageurs, the multi-national corporations, which, having freed themselves from dependency on any given national economy, can play off various national labor markets against each other, while delivering their output to the sources of demand, all the while gaining leverage with respect to national tax obligations and regulations through controlling the flow and dispersal of their finances. The question then is whether the gains from comparative advantage are not being captured in some considerable measure by multi-nationals, rather than by respective national economies.

I don't think anyone in their right mind thinks that protectionism would work, that is, yield a net gain, or even that a protectionist scheme could be devised that is at once functional and equitable. What really affords "protection" is the network of positive externalities in an economy that generates and retains value. This is where the internet,- or more generally the synergy between IT and telecommunications-, comes in. Not only does this reduce the friction in the operation of markets and create new markets -(Ebay!)- that would not otherwise exist, but it creates new organizational resources for corporations and the potential to disperse or disaggregate value-networks, even as the wide diffusion of these technologies generate new gains in productive efficiency and thus deflationary pressures. Adding to the general tendency to international deflationary pressures are two opposite demographic trends: the aging demographics of the developed world,- (which has yet to hit the U.S.A. and Canada to the same degree as Europe and Japan, and probably will not have quite the same impact when it does because of greater openness to immigration)-, which lowers demand levels, not just because of the need to save for retirements, but also because of the lack of the demand-creating effects of lots of little critters to feed; and the bringing "online" of large surpluses of low-wage labor in the developing world. (Edward Hughes mentions at his site with respect to India and Turkey an apparent decline in the elasticity of unemployment to output, from roughly .5 to .2, so this is not just a problem of the developed world.) But, in this global environment of disinflationary, if not out right deflationary tendencies, corporate profit-maximizing strategies of cost-cutting/price-cutting come to the fore, which is to say strategies that increase oligopolistic tendencies.

So I'm wondering if there are not a whole lot of "dehors texte" phenomena going on that economists have not as yet officially cottoned on to.

Posted by: john c. halasz on March 28, 2004 07:36 PM

____

john c. halasz: "And I, for one, don't see why a computer programmer with an M.S. should be entitled to a higher salary than a high school teacher with an M.S. ..."

This has nothing to do with entitlement (although many market participants like to define entitlements for themselves), but solely with demand and supply, the fact or perception how much value any given individual or professional group brings to an organization, and how much in funds the organization has to pay for that value.

Experienced software engineers in successful companies who know what they contribute and who are in a position to let their employer know, make more than a high school teacher for the one and only reason that the employer has the funds to pay more (from its larger revenue) and rightly assumes that scrimping on X dollars will reduce the revenue by more than X when these guys are leaving, or take up a more relaxed attitude about their job.

Of course that does not necessarily hold in any individual case, but in the aggregate. It is further supported by the fact that in these days of information being quickly and widely available on the internet, interested individuals are usually quite well informed about prevailing wage levels and other relevant things. And SW development is not just about general competence, but familiarity with a specific industry or a specific product is a big plus, and makes things a bit "sticky". When one of your developers leaves and is replaced with an equally experienced and competent individual, it is still a loss, as the new person needs a ramp-up period. The higher salary then contains, if you will, a "familiarity premium".

On the other hand, people have to plan their life and financial commitments, and doing that requires assuming _some_ kind of stationarity. A financial "shock" (as they call it) changes the equation and puts some people in distress. Pointing out with 20-20 hindsight to previously princely paid engineers that nobody forced them to pay those ridiculous prices for their houses, or to hold on to this losing stock, and that they were fools to assume that the .com times would go on forever, does not help a bit.

And don't get me wrong; money is just one factor out of many, albeit a very important one (but often not the primary one). To stick with your example, teaching is not for everybody.

Posted by: cm on March 28, 2004 08:08 PM

____

john c. halasz: "And I, for one, don't see why a computer programmer with an M.S. should be entitled to a higher salary than a high school teacher with an M.S. ..."

A government-employed programmer probably doesn't have much, if any, salary advantage over that school teacher. Public employment tends to be less remunerative than the private sector, across the board.

Posted by: Jon H on March 28, 2004 08:22 PM

____

cm writes: "Jon H: No offense intended, of course, and I don't know what profession you are in. Maybe my wording was a bit harsh, but I still stand to the meaning."

My background is in software, though I'm not working. My last job was at a web-centric .com.

I have respect for good web design (and good web designers). Some of my best friends are designers. ;)

The crux of the issue isn't HTML, though, it's the aesthetics, which is the hard part.

Posted by: Jon H on March 28, 2004 08:33 PM

____

Thanks for the superfluous explanation, guys. But n.b.: "(I said no entitlement, not no reason, though certainly not a moral reason)." And as for "stationarity" and financial shock, now, that can effect just about anyone, which was sort of my point. And some people do not have as wide a discretion over exactly how they will earn their living or whether the way that they must do so particularly suits them than others. Though none of this was the main point of my post. It's odd that you should think so.

Posted by: john c. halasz on March 28, 2004 08:36 PM

____

CAN ONE PERSON POSTING HERE about the ills of outsourcing, please stand up if ANY of the following is true:

1) they have an AMERICAN manufactured intel chip that powers their pc's
2) they have an AMERICAN manufactured motherboard ?
3) they have an AMERICAN manufactured CD-ROM ?
4) they have an AMERICAN manufactured Floppy drive ?
5) they have an AMERICAN manufactured CRT monitor ?
6) they have an AMERICAN manufactured LCD panel ?
7) they have an AMERICAN manufactured mouse ?
8) they have an AMERICAN manufactured keyboard ?
9) they have an AMERICAN manufactured hard drive ?

The TRAITORS who outsourced manufacturing are now complaining about their scam programming jobs being outsourced. The same traitors who applauded the cheap prices of foreing goods (see 1-9 above) and actively supported outsourcing by purchasing computers.

Posted by: foo on March 28, 2004 09:05 PM

____

Foo, you clearly don't understand. Its the programmers whose jobs are SO absolutely critical that we must protect them at all costs. It is when their jobs go abroad that the giant slippery slope to penury and destitution truly begins. When someone with a $5000 computer education can no longer earn $80k per year, civilization ends. I hope you learn your lesson.

Posted by: strawman on March 28, 2004 09:17 PM

____

john c. halasz: I'm sometimes a bit trigger-happy when seeing certain key phrases. In the case of your comment it was the "entitlement" part; often times "rational expectations" (for lack of a better term) and negoatiations or trying to push the envelope on the part of employees or generally people asking for something that could be considered customary is confused with entitlement thinking -- although it's a thin line.

Otherwise, my responses to specific comments are public responses to public comments. I didn't mean to lecture you, nor others.

Posted by: cm on March 28, 2004 09:18 PM

____

foo: You are making judgements, and you are using totalitarian rhetoric ("traitors").

strawman: Your screen name is emblematic of your post. Protecting programmers' or other white-collar jobs is not the primary point here.

But in a way you two have a valid implied point: certain things tend to become an issue for people only when the shit hits close to home. But that doesn't make the ensuing concerns illegitimate. When somebody discovers under pressure that the fate that somebody else has suffered earlier is a threat to them, gloating is of no help to anybody. It's not like white-collar people have been gloating then, and now is the time for "payback". It's like when in school the bully kicked your butt, and then when they kick somebody else's, you gloat how now "they get it paid back to them". Paid back what?

And a further point is that when the shit hit other professions starting a few decades ago, many of the people affected now where at an age or in circumstances where they could not fully appreciate what was going on. The same is true for people in earlier generations as well.

Peace, guys.

Posted by: cm on March 28, 2004 09:33 PM

____

Foo, for crying out loud, pipe down!

I was outsourcing engineering back in 1995 to Argentina, and would have been retired by now if we'd solved bandwidth and language translation problems. I was outsourcing engineering in 1999 to India with greater success and high quality, except we could never synchronize my demand cycle with their staff supply availability cycle, or resolve certain client mandated security issues.
Outsourcing is a non-issue far as I'm concerned.

So here I am, still stuck in Amerika, paying a third of my income to social republicrats, and another third to the mortgage banks, agribiz and big oil, reading ad copy from http://www.ciee.org that 500,000,000 Chinese are studying English, and for only an $1800 program fee, you too can spend the summer teaching English in exciting places like Taipei or Senchen. Say waht??!!

Pay good money to teach Chinese English?! ; )

And what would 500,000,000 Chinese be learning to say in English? Maybe, "Where would you like to go today?" Except their schools can only afford Linux boxes, and the semantics of programming are entirely too cerebrile for anything other than subprogram-library stuffing MSFT bloat code.

Microsoft has been doing the Indian outsourcing thing for five years now, and almost exactly one-third of the last American programmers they still retain are "independent contractors", just like Wal-Mart's, where a lot of us programmers end up.
Microsoft is the solution in search of a problem.

Me, I'm not into linear post-industrial futurist thinking. I don't see any way in the wildest of scenarios 500,000,000 English-hacking Chinese are gonna engage anything more programmatic than,
"Would you like fries with that, sir?"

Still worried? Get an SSBI clearance, or learn a trade. The only thing outsourcing is going to do here in Amerika is put an iron lid on wage hikes,
and for more than half of us, that's nothing new.

Speaking of new, two weeks ago I broke down and updated my XP with the Hot Fix security patches from MicroSoft. 50MB or so of error correction and hole plugging, almost immediately my older software from the Win 98 days stopped working! Then this weekend, Windows Update informed me that I needed to Hot Fix ANOTHER 21MB of bloat code. By Saturday night, my computer was taking 15 minutes to boot up, and Word 97 had gone 404, windows would just freeze, then go transparent.

It really is true MicroSoft's upgrade path is to deny users access to their old software! Well, the loss of Word 97 was the last straw. Today I plugged in the reinstall disc, and watched it die time after time as I uninstalled all the Hot Fix patches, the ripoff Java extensions the Microsoft was supposed to have stopped reverse-engineering, the Explorer backdoor code so they can watch your machine for unauthorized copies of software, the code that disables Real Networks, still nothing, uninstall, uninstall, finally, pop, with six Hot Fixes left to go, I'd cleaned out the machine enough it finally let me reinstall Word 97.

The first thing I do Monday is buy an HP Linux box, and I don't get a rat's ass if the program was written in Cupertino or Jalalabad or Taipei.

Outsourcing isn't half the problem this blatant egregious corporate rip-off of Amerika has become.

Posted by: Wang Shoo on March 28, 2004 09:41 PM

____

This issue will be closer to being solved when programs helping "we the people" are no longer viewed as "cost centers."

Invest in science and technology research at colleges and universities. Ensure that a college education is affordable for everyone. Make low interest loans available to small businesses.

No use waiting in multinational corporations to create the jobs. Help empower American entrepreneurs. (Who are pretty much the opposite of big business, are they not?)

Posted by: John Lyon on March 28, 2004 09:58 PM

____

foo:

What strawman said. And besides, when exactly was the time when treachery was not an expected outcome, (at least, part of the mix)?

Posted by: john c. halasz on March 28, 2004 10:02 PM

____

"Help empower American entrepreneurs. (Who are pretty much the opposite of big business, are they not?)"

That's me dude! I'm doing my own d*mn company. My only partner is an IP law firm. This time I'm not signing away ANY intellectual property.

Posted by: camille roy on March 28, 2004 10:20 PM

____


About 100 posts ago crayz wrote:

"The problem with all these developing countries seems to be not that they're competing with us, but that they're just stealing our damn jobs instead of making their own. That is, that because they aren't actually consuming anything....they spend no money themselves they create no demand for jobs that didn't already exist."

The numbers just don't support this. Based on your reasoning, we should be blaming developed nations Germany and Japan for their large overall surpluses, rather than India or China with their small or nonexistent ones. Don't forget to blame Canada, Italy, Saudi Arabia, and Korea (not really developing anymore) too.

But the logic is flawed anyway; we should be thrilled to exchange our expensive paper for their cheap labor. On the other side of the business cycle nobody's going to be talking about this. Instead we will be lamenting how China's new consumerism is driving up our prices and interest rates.

Posted by: snsterling on March 28, 2004 10:57 PM

____

>foo: You are making judgements, and you are
>using totalitarian rhetoric ("traitors").

No. I do think US companies should hire US programmers all else being equal. But companies
(and their owners) can do whatever they want. If they want to hire a CEO for $5 million a day and hire programmers for $10/year, then fine !
ONLY the owner gets to decide what to do.

My post was designed to illustrate 2 points:

a) All else is not equal sometimes and if a offshore programmer costs 1/10 less, then even if they are 80% as good as US programmers, there is still an overwhelming advantage to hire them. Indeed that's a rational thing to do. (even if it was irrational, that's the owners right, but in this case, it's not even irrational). I am a firm believer in private property rights, companies are private property.

b) Programming is not a "high skill" job. It's a scam. When 9 year olds can be MCSE certified and history majors and non-college majors can be the best programmers in the world (google: jamie zawinski), then clearly programming does not require the kind of rigorous study that say a Ph.d in Organic Chemistry does. Pharmaceuticals would be waaay higher tech than any kind of programming -- and even that's going to get offshored at some point in the future since you cannot stop others from learning. Are you going to ban books that talk about programming or physics or whatever ?

I can speak authoratively about programming, I remember and used the web since the days of NCSA Mosaic and the internet way before then. If you can design a high end compiler or write some advanced game engine, then you can consider yourself to be a very non-typical programmer. Most
programming is grunt work and most programmers do not have the skills to write a game engine or advanced compiler. Outsourcing of those grunt jobs stops those "programmers" from scamming the system.

I have been programming in - for example - Java since 1994 and I still learn odd little things and quirks to this day. Even the inventors of the language got the memory model wrong, they are finally going to fix it in JDK 1.5 (after 9 years). Have you seen the resume's out there ?
Everyone claims to be an "expert" in all the usual buzzwords (laughably untrue), the HR folks couldn't find their own asses with both hands, a compass and a map and the managers themselves tend to have very little in the way of critical thinking ability. These systematic inefficiencies drown out the good amongst all the bad grunt "programmers" and make a bad situation worse.

And to me, (I work in an academic setting), the tough job market for advanced chemistry and biology Ph.D's is far far more worrisome and that needs to be fixed (maybe increase the NIH budget by 10 times) if we are to incentivize people from going into real technical fields of study.

If I was running things, that's exactly what I would do. If you look at what NIH and various science agencies get in funding, it's a tiny droplet compared to the waterfall of waste in the US budget.

Posted by: foo on March 29, 2004 12:02 AM

____

Abiola Lapite sez:

> No, YOU get serious.

I'm always serious. ;-)

> That "cosmological constant" you're going on
> about smells a lot like a giant "fudge factor"
> to me ...

Yup. I guess you don't know about the original "cosmological constant" in relativity theory, which was precisely a "fudge factor" crammed in to make equation match observation, that's why I used the term.

> Why aren't we seeing the S&P 500 rally of a
> lifetime then? Why aren't you borrowing
> everything you can and selling every item
> you own in order to invest in the stock
> market?

I presume by "you" you mean me, W. D. Kiernan. I'm a construction worker, whose paycheck just about barely covers my bills. (To be precise, my family's income places us between the 40th and 60th percentile.) What could possibly make you imagine that I or any other member of the working class has the excess capital, above my family's needs, to plunge heavily into stocks? And why would anyone with limited capital take so daring a chance as you suggest (double-mortgage the house and send the returns off to Wall Street, mm hmm, you betcha!) after seeing how badly worker/investors got soaked by the 401K, I mean 201K fiasco of 1999-2002? I believe it was Tchebyschev who worked out the exact degree to which gamblers with limited capital are at a statistical disadvantage compared with gamblers with huge capital, even if otherwise the betting is unbiased; go check him out.

Posted by: W. Kiernan on March 29, 2004 04:08 AM

____

'Nobody learns RTF markup, they just let WordPad.exe do it. So why learn to do hand HTML coding?'
I'm pretty sure someone must learn it. And i have a sneaking suspicion that learning it well would lead to few but excellent employment opportunities because who the hell knows RTF?

Posted by: bryan on March 29, 2004 05:01 AM

____

It seems to me that both Prof DeLong
and Mr. Lapite. are being a bit disingenuous
here. I don't think it's a stretch to
say the components of GDP consist of
more than just skilled and unskilled
income, and profit. How about this:

A+B+C+D+E+PROFIT = GDP.

Where A,B,C,D,E represent increasing
income quintiles. I think it is rather
obvious that any of these components
can go up or down while GDP remains
constant. It has been shown over the
last 25-30 years that most of the income
gains have been going to E, while the
income of the rest of us has remained
essentially stagnant. That's a fact.

Posted by: SteveC on March 29, 2004 05:18 AM

____

Great Stuff everyone, except the BeanBag, but Harry 'the Scramjet' and Wang Sho hit the absolute nail on the head. The only thing Amerika keeps in country is to make weapons of death. We need to slow that down and invest in a quality, low energy society, before it is too late and the only thing we can do is use the weapons we create to kill somebody.

Microbloat, classic. Thomas Penfield Jackson was an American hero and DOJ under Bush shot the whole thing down.

The problem with outsourcing is American IT got a bad name due to the internet boom. Hack programmers were getting paid serious dollars to build cruddy systems. Instead of using the IT bust to find the good developers, American Managers are repeating their mistakes by outsourcing development to the East. They overpaid American management are like lemmings because they can't tell snake oil from quality in software development.

I am convinced, we are getting absolutely what we deserve. We do not honor people with intelligence or patience anymore, take a look at our elected officials and how they are savaging a person of similar stature to Judge Jackson.

Posted by: Greg Hunter on March 29, 2004 06:52 AM

____

foo: "Everyone claims to be an "expert" in all the usual buzzwords (laughably untrue), the HR folks couldn't find their own asses with both hands, a compass and a map and the managers themselves tend to have very little in the way of critical thinking ability. These systematic inefficiencies drown out the good amongst all the bad grunt "programmers" and make a bad situation worse."

I've written VxD code, worked on an IP protocol stack, released an arcade game, and architected asynchronous distributed systems, so I consider myself to be a "real" programmer.

Your point is spot on; when the HR department receives 300 resumes for a single position and they all contain identical TLA's, there's no way for the average HR person to separate the wheat from the chaff.

As far as the comments re chemists and biologists; I guess I could go back to school and get another degree, but I don't have much conviction that any of these alternative disciplines won't succumb to the same phenomenon.

That's what I consider to be the most dangerous aspect of the current environment; who wants to spend another 4+ years in school only to find that the ground has shifted again by the time you get your diploma. After all, 5 years ago software was considered a bullet-proof job.

From my perspective, it may be safer to abandon my career in tech altogether and pursue a path that's more insulated from foreign competition. And that's what's most troubling about the current environment; people can be incented to take on challenging fields of study if there's a reasonable chance of success in the field, but who wants to make the effort and take such risks in an environment such as the one we're confronting.

Anyone have any laundry that needs doing? ;-)

Posted by: djs on March 29, 2004 07:09 AM

____

Foo wrote,

"I am a firm believer in private property rights, companies are private property." ...

"And to me, (I work in an academic setting), the tough job market for advanced chemistry and biology Ph.D's is far far more worrisome and that needs to be fixed (maybe increase the NIH budget by 10 times) if we are to incentivize people from going into real technical fields of study."

A fierce believer in private property but also a believer in government-created demand. An unusual combo.

Posted by: Handy Fuse on March 29, 2004 07:32 AM

____

The reason outsourcing is such a big deal is that if you take It jobs out of the picture, real wages have been falling for some time. It isn't that IT wages weren't destined to fall, it is that now the road is closed.

Posted by: Stirling Newberry on March 29, 2004 08:06 AM

____

djs
You mean you can't sell real estate? How about litigation? Real estate might not have the long range appeal, and 4 years might be too long a stretch for that lucrative career in the legal profession. Still, you do have obvious communication skills and shouldn't stoop to taking in laundry just yet.
Or should you? Should any of us? Personally, I like the thought that Mr. Grasso should do my laundry. Look who I am passing over for this delightful opportunity --most of the CEOs of the S&P 500!

The Berstein article argues persuasively that 'more education' is not going to solve the unemployment problem. (The recent graduates are having more trouble than the less educated in finding employment). Brad thinks this analysis is 'good' but "not sure these issues have been adequately thought through..." That and the suggestion that yuppies should ponder their relative ( and perhaps sinking) current compensation levels.

More than 120 posts later, only a few posts mention executive compensation. Current pay among this gang is up over an order of magnitude from a decade ago. It used to be thought that 50 times your average employee was an acceptable CEO compensation package. This figure is over 500 now.
(Undisputably, there is an outrageous distribution of personal income).
So there is always that venue for those of us that are looking for that special laundry job.
For the rest of us, ( I want to include everybody here) there may be more to life than an early retirement in the Caymen Is.

Posted by: calmo on March 29, 2004 08:33 AM

____

bryan writes, re:RTF

"I'm pretty sure someone must learn it. And i have a sneaking suspicion that learning it well would lead to few but excellent employment opportunities because who the hell knows RTF"

I'm sure programmers working on applications that generate RTF streams learn it, but they probably keep a reference around, rather than memorizing it. Apple and Microsoft most likely have some RTF experts on staff.

But I'm sure nobody tries to be a hardcore RTF hack by writing RTF files by hand in an ASCII editor.

Posted by: Jon H on March 29, 2004 10:08 AM

____

calmo;

I propose a modification to the CEO/employee compensation ratio; we should calculate how much of the CEO package ends up as savings. Then calculate the number of employees required to accumulate the same amount of savings. Since the average citizen only saves about 2% of his income, I'll bet the ratio ends up being about 5,000/1 instead of 500/1.

I find it astounding the number of CEO's whose pay package is approximately equivalent to the profits generated by the entire organization, implying that one individual is wholly responsible for the output of the entire company.

Posted by: djs on March 29, 2004 10:26 AM

____

In the Kingdom of Gop, there was utopia - the wealthy made vast sums of money, and everyone else had raced to the bottom and made very little. They argued that this had to be the best of all possible worlds, since if a worker made even a tiny bit more, then everyone else would have to make that much less - since, after all, the cost would have to be passed on to everyone else.

"So why?" asked the liberals, who were sentenced to listen to Rush Limbaugh reruns until they were re-educated "Why, Oh, Why?", they asked "are the wealthy making more and more relative to everyone else? Why isn't their cost a burden."

"Oh no," answered the wise rulers of Gop, "then they wouldn't have the incentive to create wealth, and that is what makes all the jobs."

"So, why," asked the liberals "why, oh, why does anyone else have incentive to work harder?"

"Because we will take their house and everything they own. And then blacken their credit rating, so they can't get an apartment, a checking account or a job." Said the wise rulers of Gop. And of course the freeple all cheered in unison at this oracular wisdom "Fear will keep them in line."

"But why," asked the liberals "why, oh why - would the rich keep giving them jobs, if the rich already have all the money. Isn't the reason one gives someone a job, to make money?"

"Oh No," replied the wise rulers of Gop, "the rich give other people jobs out of the goodness of the hearts, out of pity for those of you who are poor, and would otherwise be without home and job."

"Oh," said the liberals, "that makes sense." And they proceded to go back to debating how many Treasury Secretaries could dance on the head of a pin.

Posted by: Stirling Newberry on March 29, 2004 11:23 AM

____

Moral of the story. The reason outsourcing is a big deal is because most wage catagories have been flat, and most of the good wage catagories have grown more slowly than inflation. The professional scale is the incentive to which people who are working class aspire to, or want their children to aspire to. Telling everyone that the professional class is going to be liquidated is tantamount to telling them that there is no way to get ahead, except hitting the lottery or starting a fast food franchise.

The argument that "lower wages is better" used to be called "the iron law of wages" and it was considered a problem. Because the worker got poorer and poorer, and eventually decided that waving red banners and killing rich people was a more economically productive use of his time than killing himself in a factory.

Decapitating the top of the consumer demand curve is bad, since these are the people who spend for early adoption - that is, the people who buy before there is economy of scale. No people with spare money, no new products that require expense.

Like say this internet thing we are using.

- - -

The offshoring argument is a death spiral. Offshoring without technological progress is not good - simply because there are way too many people to support at current levels of affluence. For those of us who remember late 19th century history, the first solution was called "imperialism" - where great powers killed people who lived in less organized polities, to control resources. When this was played out, the next solution was called "General European War". This didn't work out so well for about 200 million people killed, starved or otherwise liquidated or injured.

The solution was called - liberalism. Essentially regulate the increase in affluence until it matched the technological and economic improvments that would support that affluence at a sustained level. We decided the race to the bottom and tax cuts would make everyone millionaires instead. This worked for a while, as the technology paid for by liberalism continued to work its way through the system - but after a while of starving technology, there are neither enough technology workers, nor enough new products, to sustain demand.

What we've started on is a long deflationary cycle of wages and an inflationary cycle of commodities. These can last a generation, and by the end, the society has a large body of angry people ready to do things like set off bombs on wall street, massacre hapless monarchs and march off to war. We really, really, really, really don't want to go there.

The solution is to realize: first, we have to keep offshoring work. No choice about it, it is part of the necessity of continuing to grow the world economy, and bind other nations to it. Second, "make the poor pay" for offshoring - poor meaning the bottom 99% of the society that make their living on wages - is a losing strategy.

This should not be so hard to get. We want China and India and Pakistan to have big middle classes, with the desire for a settled consumer based life, with bourgeoise values and a lust for stable, open and democratic political systems. It beats the alternatives. Thus, we have to give them an incentive to join the global economy, and that means paying them enough to enjoy the fruits of it.

We also want to live well ourselves. That means finding what the bottlenecks are to increased global abundance, and removing them. There is no incentive for them to be removed by the market. They guy at the top is number one rich guy no matter how people under him live. He has as good a life style as he can buy - and he has enough money to get anything that human beings find worth procuring. It is everyone else that has the incentive to make sure that affluence spreads.

Which is why there is this thing called *progressive taxation* which says that the rich get to be rich - with big houses, and lear jets and the accoutrements of being able to excessively consume - but they don't to have enough money to buy the political system. Because, as Adam Smith pointed out, what they will do is find clear, or covert, ways of granting themselves monopolies, putting up barriers to competition and generally messing up the free market, which is a threat to their continued comfort.

Posted by: Stirling Newberry on March 29, 2004 11:38 AM

____

"Compensation of employees, % of 2001 GDI: 58.2
Compensation of employees, % of 2003 GDI: 56.5

Corporate Profits, % of 2001 GDI: 7.5
Corporate Profits, % of 2003 GDI: 9.6"
~~~~~~~~

Employee compensation/national income, 1997: 63.9%
Employee compensation/national income, 2003: 63.9%

Corporate profits/national income, 1997: 11.9%
Corporate profits/national income, 2003: 11.0%

http://www.bea.gov/bea/dn/home/gdp.htm

Gee, with all things falling apart as they are, things are almost as awful now as during the bad old Clinton days.

Posted by: Jim Glass on March 29, 2004 01:16 PM

____

Jim (and Patrick earlier) Thanks for reminding us that 2001 was perhaps not the best year on which to draw comparisons. Furthermore, it is not clear that Corporate profits include executive compensation or whether that is part of Employee compensation.( Bonuses paid contingent upon meeting profit targets etc).
Still, it does seem to me that the income distribution has not improved from 1997 ( or whatever year you are picking on with the BEA stats). Fewer people have more money, no?

Posted by: calmo on March 29, 2004 02:10 PM

____

> And to me, (I work in an academic setting),

Big surprise.

Posted by: amiable on March 29, 2004 04:28 PM

____

"Still, it does seem to me that the income distribution has not improved from 1997 ( or whatever year you are picking on with the BEA stats). Fewer people have more money, no?" --Calmo--

Calmo, your understatement leaves something to be said and Krugman does have something to say:

http://www.thenation.com/docprint.mhtml?i=20040105&s=krugman

"According to estimates by the economists Thomas Piketty and Emmanuel Saez--confirmed by data from the Congressional Budget Office--between 1973 and 2000 the average real income of the bottom 90 percent of American taxpayers actually fell by 7 percent. Meanwhile, the income of the top 1 percent rose by 148 percent, the income of the top 0.1 percent rose by 343 percent and the income of the top 0.01 percent rose 599 percent."

Posted by: Dubblblind on March 29, 2004 04:42 PM

____

Rob Sperry wrote "So what you are saying is they give us cool stuff, we give them electronic numbers. This is a bad thing why?" (and snsterling wrote something similar).

For one thing, as other posts have noticed, there are several different groups involved. The "we" who are better off are not identical with the "we" who are marginalised. They only converge over time, and meanwhile there are losers - and, with continuing changes, convergence may be deferred indefinitely.

Over and above that, there are two scenarios for how this getting something for nothing can work in the long run. Either the music will stop, leaving the debtor country with a problem, or there will be a need to stretch it out. But that means exploiting other countries or groups in other countries, even if it is hidden - it's the technique known as "peaceful penetration" to the colonialists of an earlier age. It's bad for the others, and it would still cost the USA everything it took to keep the lid screwed down.

Posted by: P.M.Lawrence on March 29, 2004 05:31 PM

____

Gosh, there's some really high-falutin stuff on here; I've got some economics background but not like some of these posters.

My sense upon reading Brad's post was that lower wages for upper-income earners would help lower-income workers because they (lower-income workers) would be competing for goods and services with people who suddenly had less. That is, demand would slacken, and prices would go down, which is a rise in the real wages of low income people. (But, if demand slackens, what happens to the assumption of a constant GDP?) Perhaps this effect is offset by the fact that owners of capital are suddenly better off because of higher profits. To the extent that those folks who just saw their income drop correlate with the folks that own capital, you've got offsetting events. However, I suspect the people we're talking about whose incomes are dropping can't make it up in dividends and rising stock prices because of wealth concentration (and because the stackmarket is, um, stagnant).

Posted by: JBoa on March 29, 2004 07:04 PM

____

Oh, and the fact, as has been mentioned that, goods and services provided by formerly high income earners cost less.

Posted by: JBoa on March 29, 2004 07:10 PM

____

>I've written VxD code, worked on an IP protocol
>stack, released an arcade game, and architected
>asynchronous distributed systems, so I consider
>myself to be a "real" programmer.

..and..

>Your point is spot on; when the HR department >receives 300 resumes for a single position and >they all contain identical TLA's, there's no way >for the average HR person to separate the wheat >from the chaff.

Well, that's the core problem. No way a non-programmer knows somone who is really excellent (like you appear to be) from some total moron with a polished resume and the usual torrent of buzzwords. Years ago, an HR person, who was once "interviewing" me on the phone, on being told about my experience with some java API's, asked me: "How many years of Java and how many years of API ?" (they thought API was another programming language).

I doubt this phenomenon is unique to computer programming. I mean how does a non-lawyer HR person know a good lawyer from a bad one, a non-lawyer HR person know a good doctor from a bad one, a good rocket scientist from a bad one, a good organic chemist from a bad one and so on ?

It's been said, "first kill all the laywers". That's wrong. I say "first kill all the HR's".
Putting people who are one step away (skill wise)from saying "would you like fries with that" in charge of complex hiring decisions, is a fucking travesty. Not that I am bitter or anything..

Anyone want to start a job board solely driven by evaluations of your peers and where all HR is banned ?

Posted by: foo on March 29, 2004 07:49 PM

____

>A fierce believer in private property but also a >believer in government-created demand. An >unusual combo.

Not at all. Many "fierce" believers as you put it will be the first to say how important government projects like the Interstate System and the Internet have been. The two are not mutually exclusive by any means; most rational people come to this conclusion in one nano-second of thought.

Only far left/right loonies are incapable of seeing the world in any shade other than black/white.

Posted by: foo on March 29, 2004 07:58 PM

____

foo: Programming is not a "high skill" job. It's a scam.

foo: Putting people who are one step away (skill wise)from saying "would you like fries with that" in charge of complex hiring decisions, is a fucking travesty. Not that I am bitter or anything..

Do you think working on your communication skills could be a good idea?

Posted by: bubba on March 29, 2004 08:51 PM

____

I will be sad, now that Brad has been discovered and these threads are so damn interesting, when all the rest of the BeanBaby's and Media Trolls get on board, and the level of genius declines.

Like majik. Once you've been there, and felt it, you live your whole life just to find it again, even if just for a single moment before you die.

Oh, and Brad's line about declining high-tech raising all the little boats at constant GDP? He was probably drunk and speaking in CG tongues, reading parables from the book of JM Keynes.
That would be Old Testament, 2nd Millenium. ; )

Sign on an overcrowded bus on a rutted dirt road in a shantytown in South Africa: "All Is Well."
No worries, mate!

Posted by: Allis Well on March 29, 2004 09:08 PM

____

Allis Well writes: Like majik. Once you've been there, and felt it, you live your whole life just to find it again, even if just for a single moment before you die.

Very poetic. Actually, trolls are not inevitable. Set up logins that require real email addresses for posting (don't show them on the posts) and most just go look for easier targets.

Posted by: bubba on March 29, 2004 09:37 PM

____

http://zdnet.com.com/2100-1104_2-5180589.html

India reported gains of 12.8 percent and 13.7 percent last year for positions in categories labeled "IT solution provider" and "software development," according to an annual Asia-Pacific survey of more than 500 companies by Hewitt Associates, an international business consultancy. The numbers, which reverse a six-year decline in pay raises in India, are far more than any increases reported among other nations surveyed.
...
U.S. pay rose 3.3 percent to 3.5 percent, the lowest increases ever recorded for American technology positions in the annual survey.
...
Eastern Europe may also become more attractive as an offshoring center. Last September, a research report estimated that a recent graduate of a specialist university in Romania could be hired for $6,500 a year in software development.

Posted by: bubba on March 29, 2004 11:17 PM

____

Nice to see that Glassman picked 1997 for his comparison year. I believe that year had the lowest % of national income in workers compensation of any year from the 1970s through the 1990s (gotta check to make totally sure, but I'm pretty sure that's true). Just more unbiased statistical analysis from the man who brought you Dow 30000.

Posted by: MQ on March 31, 2004 09:08 AM

____

Right well JG comes through. c is dead. Maybe.

Posted by: Russell L. Carter on March 31, 2004 09:57 PM

____

'Love -- a grave mental disease.' Plato

Posted by: Meschel Judy on May 3, 2004 11:43 AM

____

i am a good student

Posted by: Saira on May 8, 2004 07:07 AM

____

The biggest bonuses and payouts you could find for online gambling are here

Posted by: online casino helper website for online casinos on May 30, 2004 09:29 AM

____

Government is too big and too important to be left to the politicians.

Posted by: Hale Scott on June 30, 2004 12:00 PM

____

Post a comment
















__