7 ms·

Neutron Bomb

49 points by johns 17y ago

tjic 17y ago
IBM is shipping jobs overseas because ... wait for it ... (1) the complete cost of employing an American, including taxes, regulations, compliance, etc., is much higher than employing an Indian national. That's it. That's the complete list. Question: when we raise taxes by 40% [ http://business.theatlantic.com/2009/08/ya_know_plus_or_minus_2_trillion.php http://business.theatlantic.com/2009/08/ya_know_plus_or_minu... ] to close the budget gap, and start taxing employers even more for universal health coverage, and do X and Y and Z over the next 10 years ... will this make American workers more or less affordable as compared with off-shore workers?
- dreish 17y ago
  This is either misleading or just confused. India funds roughly 25% of health care costs through the government, and has lower employment costs, yet you imply that if we were to incrementally approach their health-care system, the difference in employment costs would widen. Edit: incidentally I agree with your point that IBM's issue is as simple as lower employment costs, but I'd suggest it's lower because Indians have a lower overall cost of living and lower standard of living, and the best students generally want to move to a country where they aren't climbing over mountains of trash and starving people all the time. I think we ought to let more of them do so, but in the meantime, of course companies are going to move to where the cheaper resources are.
  - randallsquared 17y ago
    Surely you cannot fail to have noticed how much Americans currently spend on health care, and how moving from private industry to state industry consistently increases the amount spent (at least in the US!)? Now, a case could be made that health care is an exception, largely because it's so heavily regulated already as to be effectively a poorly-run state industry with private profits. However, taking any other country's efficient or well-run government program and trying to build one like it in the US is probably doomed to failure. The US government has very bad incentives for "efficient" and "well-run".
    - dreish 17y ago
      I don't think you get to just make assertions like that without any facts. Medicare, which is already a government-run health insurance plan, and one whose customers are so satisfied they are militantly protective of it, has lower administrative costs than private insurance companies: http://wallstreetpit.com/7500-does-medicare-actually-have-higher-administrative-costs-than-private-insurers http://wallstreetpit.com/7500-does-medicare-actually-have-hi...
      - randallsquared 17y ago
        I don't have specific data on Medicare, but you aren't exactly arguing against what I said, I notice. One would expect the beneficiaries of a government program to be militantly protective of it, and the less efficient, the more so -- no one hires lobbyists to reduce money or services they're getting.
        dreish 17y ago
        I am if you read the link, which is actually a good survey of what turns out to be a somewhat complicated question, due to the differing populations served. I don't think it's fully settled, but I think the assertion "Medicare has lower administrative costs that private insurance" has a much better shot at surviving than the negative of that assertion. The government is unbeatably efficient at writing checks. I don't know where you get this notion that somehow the government would be an inefficient purveyor of health insurance. It simply isn't true.
        randallsquared 17y ago
        The government is unbeatably efficient at writing checks. I think we have different ideas about what economic efficiency entails. I'm not sure that "efficiency" at wasting money is a good thing, nor is it usually what is meant in the context of providing services. (I have not yet had an opportunity to read your link, however, so perhaps this is answered in it).
        deleted 17y ago
  - electromagnetic 17y ago
    They do indeed have a lower cost of living, roughly 1/5 of an Americans, and almost 1/8th of a British person. When Indians all expect to have 13000BTU air conditioners in their houses, all expect to have luxury SUV's, high-speed broadband with $2,000 laptops and $4,000 desktops and maybe a few cheaper ones for the kids (if they don't play video games) and maybe a few games consoles (because all kids play some sort of video games), and don't forget the $600 cell phones with $3000 contracts . . . Of course their cost of living is cheaper, people there actually walk to their work. I've never seen a person in economic problems walk to their work in a western country, despite it saving them almost two hours wages a day.
tjic 17y ago
> Companies like IBM that take this position [i.e. buying the most affordable engineering talent they can, even if it's off shore ] are hurting America. B.S. If you can purchase one apple for $1 or an identical apple for $10, failing to buy the $10 apple is (a) smart; (b) maximizes societal utility. It's spending money uselessly that destroys valu.
- swombat 17y ago
  I think Cringely is talking about a kind of vicious cycle where since you buy your apples for 1/10th the price, you fire 90% of your workforce. If everyone does this, and if there aren't new jobs to take in that redundant workforce, you could end up in a death spiral where you find that even though your apples are dirt cheap, there's no one left to buy your expensive apple tarts. So you drive yourself out of business by reducing your costs. Obviously this can only happen if the assumption holds, that there are no new jobs to absorb the redundancies, and that this is happening across the economy. That said, a case could be made that these assumptions are correct - what's your argument against them?
  - andreyf 17y ago
    That said, a case could be made that these assumptions are correct - what's your argument against them? There are tons of new jobs, and a whole new middle class - in India and China. Corporations do not share your nationalistic interests - IBM doesn't owe America anything. If Germany were to have won WW2, IBM would now be a great German company. As America's broken system of government slowly bleeds this nation to death, IBM will have no remorse over becoming a company focused on India/China.
    - mds 17y ago
      That is certainly not an argument that IBM's actions are not "hurting America"
      - req2 17y ago
        But if IBM doesn't "hurt America", it will "hurt the world".
biohacker42 17y ago
This is a fascinating view into how Bob thinks. This article, right up until the conclusion is excellent. It lays out in great detail how the ever rising health care costs are hurting companies. It also in detail explains how the car companies were only focused on the short term and that ended up bankrupting them. But IBM takes the long view and that's why they are still in business. And Bob concludes that the problem is short tern thinking? That took me by surprise since it's almost the exact opposite of the case he just made. Bob thinks this is all because of focus on short term profits and we somehow need to stop that. But how? Isn't it obvious that instead we should make the US worker more competitive? For labor intensive industries that may only go so far when people in the developing world work for A LOT less. But not all industries are labor intensive. And the standard of living in China is rising fairly fast. A bit slower but still rising in India. Isn't reducing the costs of health care and pensions the most obvious answer to how to make US workers more competitive? Exactly how to do it for health care is a political topic, so lets not discuss that on HN. But even Bob mentioned severing the pension from the company.
- dkarl 17y ago
  He's saying that what's good for IBM -- a long-term plan to outsource work and replace Americans with foreign workers -- is bad for the US and bad for US workers. So the problem for companies is short-term thinking, and the problem for US workers is that intelligent long-term corporate planning leads to some combination of outsourcing and importing foreign workers.
  - biohacker42 17y ago
    OK that makes more sense then what I thought he meant. But it doesn't make that much sense when you consider that the ultimate end is economic collapse. If corporations just put up with what ever conditions we force on them, in the short therm great, but in the long term we're screwed.
    - rubinelli 17y ago
      The ultimate end is more likely a new equilibrium, in which the difference between the cost of living in the BRIC is closer to the industrialized Western world than it is now. Also, don't forget productivity gains are fueled by new technologies, and the US are still way ahead of the competition in research.
deleted 17y ago
[deleted]
fnid 17y ago
Here is the problem with this debate. On one hand, people say, "We need more H1B visas to handle the engineering workload in the U.S. There aren't enough skilled americans." They also say, "We must make engineering more attractive to Americans. Stop focusing on sports, et al and focus on creating brilliant minds." Similarly, groups argue that outsourcing jobs is acceptable, another that it is not. The problem is that we cannot have both. You cannot convince students in america to invest 6 figures into their education if they know those jobs will be filled with immigrants or shipped overseas. If there is no opportunity for jobs or an income that can absorb the investment in the education, then students will not enter that profession. Technology employers in America argue that limiting H1B visas is stiffling creativity and the ability of companies in the U.S. to innovate. If this is the case, rather than paying individuals from other countries less to do the same job, pay locals more to do the same job. Give them more of an incentive to enter the work force. Value the work appropriately to the difficulty and investment level needed to complete the task. Being an engineer is difficult. Not everyone in the world, can, or wants to do it. There has to be an incentive to perform these difficult tasks. The reason that we need to curb H1B visas and the outsourcing of jobs is precisely for the same reasons that the employers say we need to increase them. We need to curb them because we need america to remain more competitive. There is a difference between America remaining more competitive and American corporations remaining more competitive. The former means american citizens and our nation remains strong. The later does not. If, for example, we continue to increase H1B's and off-shoring of technical work, then the logical conclusion is that there are no longer any native born americans to fill these positions. If this is the case, then America -- the nation -- is vulnerable to those countries with citizens and patriots to foreign entities who do have those skills. This will leave America at an extreme disadvantage in the long run. If engineers, who, arguably produce much more value to society than athletes or even CEOs were to earn as much money, the professions would be more popular. Instead, we have individuals who could make lasting changes to the benefit of our infrastructure, our technology, and our culture are entering other fields because they are more lucrative and are more appreciated by our society. If we continue to outsource the jobs, it is a big sign that those who perform these tasks are not really appreciated. Engineers are not appreciated in America. They are appreciated in other countries. Compare our culture to Germany. Germany appreciates technology savants and the result is evident in their current account. Relatively speaking, they are the richest nation in the world. And America is the poorest.

49 points by johns 17y ago

tjic 17y ago

IBM is shipping jobs overseas because ... wait for it ... (1) the complete cost of employing an American, including taxes, regulations, compliance, etc., is much higher than employing an Indian national. That's it. That's the complete list. Question: when we raise taxes by 40% [ http://business.theatlantic.com/2009/08/ya_know_plus_or_minus_2_trillion.php http://business.theatlantic.com/2009/08/ya_know_plus_or_minu... ] to close the budget gap, and start taxing employers even more for universal health coverage, and do X and Y and Z over the next 10 years ... will this make American workers more or less affordable as compared with off-shore workers?

dreish 17y ago
This is either misleading or just confused. India funds roughly 25% of health care costs through the government, and has lower employment costs, yet you imply that if we were to incrementally approach their health-care system, the difference in employment costs would widen. Edit: incidentally I agree with your point that IBM's issue is as simple as lower employment costs, but I'd suggest it's lower because Indians have a lower overall cost of living and lower standard of living, and the best students generally want to move to a country where they aren't climbing over mountains of trash and starving people all the time. I think we ought to let more of them do so, but in the meantime, of course companies are going to move to where the cheaper resources are.
- randallsquared 17y ago
  Surely you cannot fail to have noticed how much Americans currently spend on health care, and how moving from private industry to state industry consistently increases the amount spent (at least in the US!)? Now, a case could be made that health care is an exception, largely because it's so heavily regulated already as to be effectively a poorly-run state industry with private profits. However, taking any other country's efficient or well-run government program and trying to build one like it in the US is probably doomed to failure. The US government has very bad incentives for "efficient" and "well-run".
  - dreish 17y ago
    I don't think you get to just make assertions like that without any facts. Medicare, which is already a government-run health insurance plan, and one whose customers are so satisfied they are militantly protective of it, has lower administrative costs than private insurance companies: http://wallstreetpit.com/7500-does-medicare-actually-have-higher-administrative-costs-than-private-insurers http://wallstreetpit.com/7500-does-medicare-actually-have-hi...
    - randallsquared 17y ago
      I don't have specific data on Medicare, but you aren't exactly arguing against what I said, I notice. One would expect the beneficiaries of a government program to be militantly protective of it, and the less efficient, the more so -- no one hires lobbyists to reduce money or services they're getting.
      - dreish 17y ago
        I am if you read the link, which is actually a good survey of what turns out to be a somewhat complicated question, due to the differing populations served. I don't think it's fully settled, but I think the assertion "Medicare has lower administrative costs that private insurance" has a much better shot at surviving than the negative of that assertion. The government is unbeatably efficient at writing checks. I don't know where you get this notion that somehow the government would be an inefficient purveyor of health insurance. It simply isn't true.
        randallsquared 17y ago
        The government is unbeatably efficient at writing checks. I think we have different ideas about what economic efficiency entails. I'm not sure that "efficiency" at wasting money is a good thing, nor is it usually what is meant in the context of providing services. (I have not yet had an opportunity to read your link, however, so perhaps this is answered in it).
        deleted 17y ago
- electromagnetic 17y ago
  They do indeed have a lower cost of living, roughly 1/5 of an Americans, and almost 1/8th of a British person. When Indians all expect to have 13000BTU air conditioners in their houses, all expect to have luxury SUV's, high-speed broadband with $2,000 laptops and $4,000 desktops and maybe a few cheaper ones for the kids (if they don't play video games) and maybe a few games consoles (because all kids play some sort of video games), and don't forget the $600 cell phones with $3000 contracts . . . Of course their cost of living is cheaper, people there actually walk to their work. I've never seen a person in economic problems walk to their work in a western country, despite it saving them almost two hours wages a day.

tjic 17y ago

> Companies like IBM that take this position [i.e. buying the most affordable engineering talent they can, even if it's off shore ] are hurting America. B.S. If you can purchase one apple for $1 or an identical apple for $10, failing to buy the $10 apple is (a) smart; (b) maximizes societal utility. It's spending money uselessly that destroys valu.

swombat 17y ago
I think Cringely is talking about a kind of vicious cycle where since you buy your apples for 1/10th the price, you fire 90% of your workforce. If everyone does this, and if there aren't new jobs to take in that redundant workforce, you could end up in a death spiral where you find that even though your apples are dirt cheap, there's no one left to buy your expensive apple tarts. So you drive yourself out of business by reducing your costs. Obviously this can only happen if the assumption holds, that there are no new jobs to absorb the redundancies, and that this is happening across the economy. That said, a case could be made that these assumptions are correct - what's your argument against them?
- andreyf 17y ago
  That said, a case could be made that these assumptions are correct - what's your argument against them? There are tons of new jobs, and a whole new middle class - in India and China. Corporations do not share your nationalistic interests - IBM doesn't owe America anything. If Germany were to have won WW2, IBM would now be a great German company. As America's broken system of government slowly bleeds this nation to death, IBM will have no remorse over becoming a company focused on India/China.
  - mds 17y ago
    That is certainly not an argument that IBM's actions are not "hurting America"
    - req2 17y ago
      But if IBM doesn't "hurt America", it will "hurt the world".

biohacker42 17y ago

This is a fascinating view into how Bob thinks. This article, right up until the conclusion is excellent. It lays out in great detail how the ever rising health care costs are hurting companies. It also in detail explains how the car companies were only focused on the short term and that ended up bankrupting them. But IBM takes the long view and that's why they are still in business. And Bob concludes that the problem is short tern thinking? That took me by surprise since it's almost the exact opposite of the case he just made. Bob thinks this is all because of focus on short term profits and we somehow need to stop that. But how? Isn't it obvious that instead we should make the US worker more competitive? For labor intensive industries that may only go so far when people in the developing world work for A LOT less. But not all industries are labor intensive. And the standard of living in China is rising fairly fast. A bit slower but still rising in India. Isn't reducing the costs of health care and pensions the most obvious answer to how to make US workers more competitive? Exactly how to do it for health care is a political topic, so lets not discuss that on HN. But even Bob mentioned severing the pension from the company.

dkarl 17y ago
He's saying that what's good for IBM -- a long-term plan to outsource work and replace Americans with foreign workers -- is bad for the US and bad for US workers. So the problem for companies is short-term thinking, and the problem for US workers is that intelligent long-term corporate planning leads to some combination of outsourcing and importing foreign workers.
- biohacker42 17y ago
  OK that makes more sense then what I thought he meant. But it doesn't make that much sense when you consider that the ultimate end is economic collapse. If corporations just put up with what ever conditions we force on them, in the short therm great, but in the long term we're screwed.
  - rubinelli 17y ago
    The ultimate end is more likely a new equilibrium, in which the difference between the cost of living in the BRIC is closer to the industrialized Western world than it is now. Also, don't forget productivity gains are fueled by new technologies, and the US are still way ahead of the competition in research.

deleted 17y ago

[deleted]

fnid 17y ago

Here is the problem with this debate. On one hand, people say, "We need more H1B visas to handle the engineering workload in the U.S. There aren't enough skilled americans." They also say, "We must make engineering more attractive to Americans. Stop focusing on sports, et al and focus on creating brilliant minds." Similarly, groups argue that outsourcing jobs is acceptable, another that it is not. The problem is that we cannot have both. You cannot convince students in america to invest 6 figures into their education if they know those jobs will be filled with immigrants or shipped overseas. If there is no opportunity for jobs or an income that can absorb the investment in the education, then students will not enter that profession. Technology employers in America argue that limiting H1B visas is stiffling creativity and the ability of companies in the U.S. to innovate. If this is the case, rather than paying individuals from other countries less to do the same job, pay locals more to do the same job. Give them more of an incentive to enter the work force. Value the work appropriately to the difficulty and investment level needed to complete the task. Being an engineer is difficult. Not everyone in the world, can, or wants to do it. There has to be an incentive to perform these difficult tasks. The reason that we need to curb H1B visas and the outsourcing of jobs is precisely for the same reasons that the employers say we need to increase them. We need to curb them because we need america to remain more competitive. There is a difference between America remaining more competitive and American corporations remaining more competitive. The former means american citizens and our nation remains strong. The later does not. If, for example, we continue to increase H1B's and off-shoring of technical work, then the logical conclusion is that there are no longer any native born americans to fill these positions. If this is the case, then America -- the nation -- is vulnerable to those countries with citizens and patriots to foreign entities who do have those skills. This will leave America at an extreme disadvantage in the long run. If engineers, who, arguably produce much more value to society than athletes or even CEOs were to earn as much money, the professions would be more popular. Instead, we have individuals who could make lasting changes to the benefit of our infrastructure, our technology, and our culture are entering other fields because they are more lucrative and are more appreciated by our society. If we continue to outsource the jobs, it is a big sign that those who perform these tasks are not really appreciated. Engineers are not appreciated in America. They are appreciated in other countries. Compare our culture to Germany. Germany appreciates technology savants and the result is evident in their current account. Relatively speaking, they are the richest nation in the world. And America is the poorest.