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IBM is shipping jobs overseas because ... wait for it ... (1) the complete cost of employing an American, including taxes, regulations, compliance, etc., is

by 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.

by tjic 17y ago

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.