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But it is not equivalent. Hiring local has many beneficial effects over outsourcing - increased labour demand increases wages, the local pool of talent and tech

But it is not equivalent. Hiring local has many beneficial effects over outsourcing - increased labour demand increases wages, the local pool of talent and technology is developed, and the money you spend will in turn mostly be spent in your own economy, growing it and paying taxes to your government. You could argue that these secondary effects do not outweigh the higher cost, and I'm sure sometimes that would be true, but this is a much weaker and less general argument.

yummyfajitas 10y ago
We are discussing hiring local workers, not outsourcing. The local workers just happen to be brown and born in a different place. The money will still be spent in your own economy. The choices are threefold: My preferred scheme (1): Low income taxpayers keep $30k and spend it themselves. Government pays for $70k from lowest bidding software engineer (possibly an Indian). Fergie's preferred scheme (2): Low income taxpayers don't get to spend $30k on themselves. Government pays $100k to a non-Indian software engineer. My alternate scheme (3): Low income taxpayers don't get to spend $30k on themselves. Government pays $70k to some Indian software engineer and then gives $30k to some random high income non-Indian person. Your argument does not distinguish between (2) and (3). In both cases, money is transferred from taxpayers to high income colocated workers who will presumably spend it in the economy.
- taneq 10y ago
  > We are discussing hiring local workers, not outsourcing. The local workers just happen to be brown and born in a different place. One distinction is that many immigrant workers will be sending money back to their family in their home country, resulting in a net drain on the economy in which they're working. I'm not saying this is a good reason to make life harder for them, but I do think it's a fair point.
  - vira 10y ago
    It's not that simple. An Indian expatriate's remittance may leave American shores, for example, but then re-enters when their family buys iPhones, Ford's and Hershey's.
    - akiselev 10y ago
      As someone who sends back thousands of dollars a year to family in Russia and Lithuania: they're sure as hell not spending it on American products. They spend it on food, medicine, housing, and education which are all sourced locally except for a tiny fraction of products that can't be (mostly IP restricted things like medicine, textbooks, movies). Once in a while they'll buy a computer manufactured in China from an ostensibly American company that rarely repatriates their profits. The problem is that most American exports are luxury goods (even in agriculture) and when you come from a poor country where a few hundred dollars makes a huge difference, those exports will account for a tiny amount of the capital sent there. There are many long tail benefits but I doubt they are quantifiable enough to say that the drain from remittances is anywhere near break even. Edited to add: my family doesn't even need the money, despite having health conditions that would economically cripple someone in the US without the best insurance. Salary + pensions + free education and healthcare are enough to survive so most of the money I send them are to give them breathing room and spending money. I think half of what I send them gets spent on spoiling the younger family members and the rest goes into a rainy day account. The only time they "spend" on American products is when one of us in the US buys them iPads/iPhones (on top of the remittance) as gifts on one of our visits and they buy a $5 game twice a year for the kids to play. That said, if Americans knew how much of the >$100 billion remittance market went to buying little kids books, candy bars, sports equipment, and board games, they'd think the money was worth all the happiness it brings.
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- DarkKomunalec 10y ago
  They still depress wages, and they will take most of their wages back with them, where their families are, and the cost of living is lower. There have also been many reports of americans training their replacements, at which point the distinction to outsourcing disappears. Finally, I take issue with your characterization of software engineers as 'high income' - as I understand it, compared to the cost of living, they don't make that much on average. But I would welcome statistics on this matter.
  - yummyfajitas 10y ago
    In that case, should we also avoid hiring American citizens who send money to family overseas? I agree that this reduces wages of high income workers. That's exactly why it reduces income inequality. There are essentially no statistics in the US which adjust income for cost of living. Do you criticize all income inequality arguments on this ground, or just this one?
    - crdoconnor 10y ago
      >I agree that this reduces wages of high income workers. That's exactly why it reduces income inequality. The majority of the money saved from those wages would be transferred to the managerial classes (execs, etc.) and shareholders, making income inequality worse: http://www.forbes.com/2004/08/31/cx_da_0831topnews.html http://www.forbes.com/2004/08/31/cx_da_0831topnews.html Income inequality isn't high because people who work for a living are earning too much.
- crdoconnor 10y ago
  >We are discussing hiring local workers, not outsourcing. The local workers just happen to be brown and born in a different place. > >The money will still be spent in your own economy. In other words you are valuing the $128 billion US remittance market at $0.
- jimmywanger 10y ago
  > In both cases, money is transferred from taxpayers to high income colocated workers who will presumably spend it in the economy. Also, you're ignoring the national security implications of the thing. We cannot afford to be dependent on a foreign country for high tech skills. That's one reason why protectionism makes sense. As a country, we're willing to pay extra for certain basic manufacturing/services to stay in the county, such as aerospace repair and steel manufacturing, in case we ever become hostile with some other country.
  - 794CD01 10y ago
    That's both literally and figuratively backwards. You're describing a scenario where the relationship between the countries becomes so hostile that we have to worry about what happens if one of us cuts off the flow of talent. But what we should really care about is making the flow of talent so voluminous and indispensable to both nations that relations cannot deteriorate to that point. That's real national security.
    - akiselev 10y ago
      Right, until that other country elects an orange demagogue that utilizes popular discontent to demonize you and cut off that flow of talent, regardless of the mutually assured harm. Societies are fickle, especially in times of war or increasing tensions. A well maintained local talent pool and industrial capacity subsidized against foreign economic forces are not. Relying on other nations is the exact opposite of national security and it's naive to think that they will be by our side when shit hits the fan. We've seen too much in the last hundred years to leave our most critical industries to chance.
      - 794CD01 10y ago
        The movement of labor and ideas also means that there is no shortage of educated people to speak out against said orange demagogue's terrible policies. And most peoples' postmortems of the election agree that the election was close enough that higher immigration (or even better distribution of existing immigrants) would likely have kept him out of office.
- infinite8s 10y ago
  In scheme 1, does the lowest bidding software engineer have the right to stay in the US if they don't have work? If not, maybe that's why they can be the lowest bidder. Any American born developer of minority descent isn't going to underbid to that level. So your preferred scheme allows the free flow of capital but not labor.

yummyfajitas 10y ago

We are discussing hiring local workers, not outsourcing. The local workers just happen to be brown and born in a different place. The money will still be spent in your own economy. The choices are threefold: My preferred scheme (1): Low income taxpayers keep $30k and spend it themselves. Government pays for $70k from lowest bidding software engineer (possibly an Indian). Fergie's preferred scheme (2): Low income taxpayers don't get to spend $30k on themselves. Government pays $100k to a non-Indian software engineer. My alternate scheme (3): Low income taxpayers don't get to spend $30k on themselves. Government pays $70k to some Indian software engineer and then gives $30k to some random high income non-Indian person. Your argument does not distinguish between (2) and (3). In both cases, money is transferred from taxpayers to high income colocated workers who will presumably spend it in the economy.

taneq 10y ago
> We are discussing hiring local workers, not outsourcing. The local workers just happen to be brown and born in a different place. One distinction is that many immigrant workers will be sending money back to their family in their home country, resulting in a net drain on the economy in which they're working. I'm not saying this is a good reason to make life harder for them, but I do think it's a fair point.
- vira 10y ago
  It's not that simple. An Indian expatriate's remittance may leave American shores, for example, but then re-enters when their family buys iPhones, Ford's and Hershey's.
  - akiselev 10y ago
    As someone who sends back thousands of dollars a year to family in Russia and Lithuania: they're sure as hell not spending it on American products. They spend it on food, medicine, housing, and education which are all sourced locally except for a tiny fraction of products that can't be (mostly IP restricted things like medicine, textbooks, movies). Once in a while they'll buy a computer manufactured in China from an ostensibly American company that rarely repatriates their profits. The problem is that most American exports are luxury goods (even in agriculture) and when you come from a poor country where a few hundred dollars makes a huge difference, those exports will account for a tiny amount of the capital sent there. There are many long tail benefits but I doubt they are quantifiable enough to say that the drain from remittances is anywhere near break even. Edited to add: my family doesn't even need the money, despite having health conditions that would economically cripple someone in the US without the best insurance. Salary + pensions + free education and healthcare are enough to survive so most of the money I send them are to give them breathing room and spending money. I think half of what I send them gets spent on spoiling the younger family members and the rest goes into a rainy day account. The only time they "spend" on American products is when one of us in the US buys them iPads/iPhones (on top of the remittance) as gifts on one of our visits and they buy a $5 game twice a year for the kids to play. That said, if Americans knew how much of the >$100 billion remittance market went to buying little kids books, candy bars, sports equipment, and board games, they'd think the money was worth all the happiness it brings.
- deleted 10y ago
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DarkKomunalec 10y ago
They still depress wages, and they will take most of their wages back with them, where their families are, and the cost of living is lower. There have also been many reports of americans training their replacements, at which point the distinction to outsourcing disappears. Finally, I take issue with your characterization of software engineers as 'high income' - as I understand it, compared to the cost of living, they don't make that much on average. But I would welcome statistics on this matter.
- yummyfajitas 10y ago
  In that case, should we also avoid hiring American citizens who send money to family overseas? I agree that this reduces wages of high income workers. That's exactly why it reduces income inequality. There are essentially no statistics in the US which adjust income for cost of living. Do you criticize all income inequality arguments on this ground, or just this one?
  - crdoconnor 10y ago
    >I agree that this reduces wages of high income workers. That's exactly why it reduces income inequality. The majority of the money saved from those wages would be transferred to the managerial classes (execs, etc.) and shareholders, making income inequality worse: http://www.forbes.com/2004/08/31/cx_da_0831topnews.html http://www.forbes.com/2004/08/31/cx_da_0831topnews.html Income inequality isn't high because people who work for a living are earning too much.
crdoconnor 10y ago
>We are discussing hiring local workers, not outsourcing. The local workers just happen to be brown and born in a different place. > >The money will still be spent in your own economy. In other words you are valuing the $128 billion US remittance market at $0.
jimmywanger 10y ago
> In both cases, money is transferred from taxpayers to high income colocated workers who will presumably spend it in the economy. Also, you're ignoring the national security implications of the thing. We cannot afford to be dependent on a foreign country for high tech skills. That's one reason why protectionism makes sense. As a country, we're willing to pay extra for certain basic manufacturing/services to stay in the county, such as aerospace repair and steel manufacturing, in case we ever become hostile with some other country.
- 794CD01 10y ago
  That's both literally and figuratively backwards. You're describing a scenario where the relationship between the countries becomes so hostile that we have to worry about what happens if one of us cuts off the flow of talent. But what we should really care about is making the flow of talent so voluminous and indispensable to both nations that relations cannot deteriorate to that point. That's real national security.
  - akiselev 10y ago
    Right, until that other country elects an orange demagogue that utilizes popular discontent to demonize you and cut off that flow of talent, regardless of the mutually assured harm. Societies are fickle, especially in times of war or increasing tensions. A well maintained local talent pool and industrial capacity subsidized against foreign economic forces are not. Relying on other nations is the exact opposite of national security and it's naive to think that they will be by our side when shit hits the fan. We've seen too much in the last hundred years to leave our most critical industries to chance.
    - 794CD01 10y ago
      The movement of labor and ideas also means that there is no shortage of educated people to speak out against said orange demagogue's terrible policies. And most peoples' postmortems of the election agree that the election was close enough that higher immigration (or even better distribution of existing immigrants) would likely have kept him out of office.
infinite8s 10y ago
In scheme 1, does the lowest bidding software engineer have the right to stay in the US if they don't have work? If not, maybe that's why they can be the lowest bidder. Any American born developer of minority descent isn't going to underbid to that level. So your preferred scheme allows the free flow of capital but not labor.