June 09, 2006

Dig your grave, then we'll shoot you

I have this friend. She works for a local company. Or, more accurately, she'll be working for a local company until the end of the month. You see, she's being laid off. Oh, it's not that she's been doing a bad job, or that her position is not necessary. No, she's being laid off because the local company is outsourcing her job to China.

Which sucks, but that's not the kicker.

The kicker is, next week, she has to start TRAINING IN the Chinese who are taking over her job. I mean, JEBUS! I told my friend, NO WAY IN HELL would I subject myself to that kind of insulting shit. To which my friend replied:

"Well, if I quit, I won't be able to qualify for unemployment."

Between that, and my ongoing job-searching adventures, I can't help but feel something's terribly wrong here.

Posted by Ryan at June 9, 2006 08:20 AM | TrackBack

What happens if she just gives them bad information? And yeah, it's wrong on a shitload of levels.

Posted by: Donna at June 9, 2006 09:25 AM

Thank god for NAFTA.....assholes

Posted by: at June 9, 2006 01:03 PM

Your comment engine wouldn't let me post my comment and wouldn't tell me why (it highlighted my whole post, so maybe you've banned me from commenting? Who knows.)

So I posted it here.

Posted by: flamingbanjo at June 9, 2006 02:40 PM

I can assure you you're not banned, Flaming.

Posted by: Ryan at June 9, 2006 03:09 PM

Hmm. And it wasn't "giant sucking sound" that triggered the spam-blocker...

Posted by: flamingbanjo at June 9, 2006 03:52 PM

Yes, somehow the North American Free Trade Act, which removed tariffs on goods between Canada, the US, and Mexico, directly caused Ryan's friend to lose her service job to an employee on another continent altogether on another hemisphere.

I hope your anonymous ass is picking up the sarcasm here, 'cause I'm laying it on pretty thick.

Either way, I agree with Donna. Teach the new guy entirely wrong information. There's no moral dilemma in this case as far as I'm concerned.

Posted by: Sean at June 9, 2006 06:47 PM

While we're on the subject of filters, Ryan, how come I can't even post anymore if I use my University of Minnesota email account? I've heard of filtering comments, but I've never seen another blog consider the string "u m n . e d u" questionable content in my email address! Why did you add that in?

Posted by: Sean at June 9, 2006 06:50 PM

I've never set a filter on this blog ever. I've banned IP addresses that spam me, but I've never set a filter. It must be Mu.Nu defaults. Perhaps I had best go in there and see what it's filtering now. Apologies.

Posted by: Ryan at June 9, 2006 06:54 PM

I'll let it slide... this time. ;)

Posted by: Sean at June 10, 2006 07:16 AM

Yes, somehow the North American Free Trade Act, which ... another hemisphere.


I'm often blown away by the new "professionalism" in American workplaces. There are all these fun new mechanisms set up that basically force people to sit there and take it while they're fucked out of their jobs, harassed or forced to train their own replacements. I've had a couple of jobs where my bosses basically tried to humiliate me into quitting so their unemployment insurance rates wouldn't go up (stuff like having to fill out a time use sheet for all my activities during the day and likesuch).

The miracle, I think, is that more people don't go postal around this sort of thing.

I've often practiced a scorched earth policy, stripping my computers and office files when I sense the layoff ax coming so that my replacement won't be able to benefit from any of my work. If I then get to leave under amiable conditions, I leave them a map of how to find the data they need. Otherwise I just hand them a few thousand pages of loose data and wish them luck.

Posted by: Joshua at June 11, 2006 07:36 AM

this is the major reason why people should be much more mindful of the labels on their clothes. "MADE IN CHINA" = "LOSE YOUR JOB". the sweatshop angle is hard to sell, but this one is becoming clearer and clearer.

i am sympathetic to those losing their jobs due to outsourcing, but not as much as i would be if Americans didn't buy BILLIONS of dollars of goods made in China every year.

Americans are all digging their graves with our "disposable consumables" culture right now, and while international trade, import/export and labor laws are sorely needed, a shift in our consumer habits wouldn't hurt either.

Posted by: amy.leblanc at June 12, 2006 11:58 AM

There's that, leblanc, but it's also the impossible push by companies to continuously post higher and higher earnings to keep shareholders happy. Companies like the one my friend works (for now) for just simply get so incredibly big, the only way they can post higher earnings during some fiscal years is to pull shit like they're doing with outsourcing. Of course, I'm no expert in fields like this, but it sure seems to be a big component from what I can see.

Posted by: Ryan at June 12, 2006 01:01 PM

leblanc…right on. Up and coming economies are directly benefiting from American consumerism. Cast your market-vote but be willing to pay twice as much for a pair a pink flip-flops. I don't have an issue with that, but I don't have three kids that need to eat either.

I'll go along with a certain amount of protectionism. But, I'd be interested to know if there was a similar sentiment in Europe towards an up and coming American economy a couple hundred years ago.

Posted by: seed at June 12, 2006 01:41 PM

I don't have an issue with that, but I don't have three kids that need to eat either.

The thing about this kind of thinking is, the guy who buys at Walmart because he has three kids to support is basically ensuring that his kids won't have jobs or that, if they do have jobs, they'll be competing more directly with Chinese workers. And the reason that's bad isn't that they're Chinese, it's that their labor standards are terrible. Show me a shoe made in China by a factory worker making $30,000 a year, with healthcare, vacations and retirement, I'll buy the fucking thing. Otherwise, buying stuff made buy a factory worker who makes $3,000 a year and has no benefits pretty much guarantees that your children or their children's children are going to be living under those same conditions because those labor standards will become the market standard.

Just FYI, the economy was so different 200 years ago, there's really no comparing the current situation with the one from that time. Manufacturing and the sale of goods in European cities was still tightly controlled by the guild system at that time. Also, most European countries had slaves in overseas colonies harvesting natural resources to be shipped back to Europe for use in manufacturing and so on.

Posted by: Joshua at June 12, 2006 04:24 PM

Ryan, not only is there pressure from shareholders to maximize short-term profits (which "adds to the stock value" somehow, even though stock value is purely determined by what price people are willing to pay for a given stock), but in most cases they have a legal obligation to do so. They have a fiduciary duty to their shareholders to do everything within the law to maximize profits. So it's not that corporations are necessarily choosing to screw people over in order to maximize profits, it's that they are actually required by law to exactly that.

And since "everything within the law" includes lobbying to change laws, they are also required to lobby the government to to allow them to do things like this. Including lobbying the government to sign NAFTA or lobbying for industry-specific tax breaks or lobbying the government to do away with network neutrality or whatever. When people like me rail against corporations it's not because I think all the people who work for them are heartless assholes (and not because I hate businesses that are profitable,) it's about this fact that corporations are required to behave in a way that considers profit to be the end-all-be-all. And that given the nature of political campaign funding in this country, this need to place profit above all other considerations ultimately ends up being written into the law of the land.

And then we end up with a government more interested in protecting the corporations who are screwing people from any kind of negative consequences for their actions than it is in protecting citizens from getting screwed.

Motto of this form of government: "It sucks to be you."

Posted by: flamingbanjo at June 12, 2006 05:23 PM

I agree with most of what you said. Global labor standards make terrible t-shirt slogans. For the most part, the average dumbass (no offense, but I'm in one the those moods) does not give a damn about who made what and where and how much comp-time they got in return. You and I may have the luxury, or consciousness, to elect what we buy according to labor standards, but that's not the norm.

Which leads to whether we can really make a difference or not. If the Chinese gov't came out and said that Wal-mart now has to increase their salaries and benefits to a standard close to what you said two things would happen: 1. Wal-mart closes shop and takes its employment elsewhere; 2. Wal-mart cannot find a lower wage market and its sales are reduced enough to where it's no longer economically viable to produce goods in one corner of the globe and sell them in another. Either way, it leaves Chinese people without employment. $3000/yr might be the best deal in town.

The issue is that there aren't enough Wal-marts in town to drive the cost of labor up. They don't have anything to compete with so the market naturally dictates the wages at the level they are at.

But, I am not suggesting that we need more Wal-marts to naturally increase employment standards. As you indicated, the global market has changed so much that there will always be pockets to exploit. The solution becomes a chess-game with tariff policy. The US wants to sell more steel domestically, well then its farm products may not sell abroad.

Which points me back to leblanc's statement. If you don't like it, don't buy it. The consumer is the best node to influence the market.

Posted by: seed at June 12, 2006 07:53 PM

(note: the following is just off the top of my head and I just woke up, so it may be a little choppy)

1. Wal-mart closes shop and takes its employment elsewhere;

I'm pretty sure that's not how it would go down.

From a strict market standpoint, there is no substitute for China. It's demographically and geopolitically unique; a country with an enormous labor surplus, a relatively stable government (weirdly enough) and a highly managed economy that maintains a relatively small pool of variables in terms of market planning. India doesn't even come close. For one thing, if we moved as much manufacturing to India (or any country that allows the value of its currency to be set by the global market) as we've sent to China, the rupee would go up and drive the price of imported goods up with it. The magnitude of the change would drive profitability down fairly quickly so, from an investment standpoint, there would be a significant risk associated with building TV factories in India; you could only build so many TVs there before the cost started to go up towards the point where the cheapness of Indian labor no longer offsets the cost of transporting made-in-India TVs to the United States (the primary market for such goods).

Other possible substitute countries like, say, Indonesia, in addition to still having the "their money will suffer from significant political instability. You can build a shoe factory there because it doesn't cost much to build a shoe factory so if there's a war or a change in leadership, you can afford to cut your losses.

2. Wal-mart cannot find a lower wage market and its sales are reduced enough to where it's no longer economically viable to produce goods in one corner of the globe and sell them in another.

The thing is, it's not economically viable to produce goods in one corner of the globe and sell them in another. Barring a naturally occurring concentration of raw materials (like trees or metals or something), the price of transport should always act as a market influence to localize manufacturing. The only way to make globalization viable is to exploit labor markets-- but who does that exploitation ultimately serve? Not only does it drive wages down all over the world, it also eliminates future markets by skimming "disposable" income off consumers (aka "labor") and directing it to a very very small minority who benefit directly from the profitability of corporations (and please tell me you know better than to suggest that the profitability of corporations improves the status of workers-- while it might be possible it's certainly not how things have worked at any point in the last 100 years).

In that case you have the India problem in reverse. America's trade deficit has gotten so huge that the value of our dollar is dropping-- so precipitously that even our fixed-exchange Chinese-made goods can't offset the effect of labor depletion on our CPI.

Either way, it leaves Chinese people without employment. $3000/yr might be the best deal in town.

Not in the long run. Sooner or later the imbalance will be corrected (by a dropping dollar or a rising yuan) and China will have to scale back their economy-- and when that happens they'll find their resource pool depleted and the natural resources they use to feed themselves-- fish in the rivers, clean soil, clean groundwater --have been "converted" to industrial modes (dammed rivers, parking lots and roads, petroleum in the ground water) that will cost a lot of money to fix. But they won't have any money because their economy will be in the process of collapsing. And they won't have a store of "savings" in the form of a comparatively affluent working class (like the one we're in the process of cannibalizing in the United States) to float their economy on because they were letting the poor bastards work for $3,000 a year.

The irony of all this is that it should be obvious to anyone with even a rudimentary grasp of economics. They taught us all in elementary school that, barring a monopoly, markets will stabilize. If you raise your prices, sales will go down. If you lower your prices, sales will go up but your profits will be lower so you'll be making about the same amount. If you lower your prices and profits don't drop, something's gone wrong with the system. That money is coming from somewhere else; savings, other markets, whatever. And that depletion will be felt somewhere at some point.

Labor is the resource you can't really exploit beyond a certain point because the viability of labor directly affects the viability of future markets. The longer you exploit labor to the detriment of the labor standard, the harder the other shoe is going to drop.

Posted by: Joshua at June 13, 2006 03:03 AM

Whoops. This:

the "their money will suffer from significant political instability

should read like this:

the "their money will still get more expensive" problem, suffer from significant political instability

Posted by: Joshua at June 13, 2006 03:06 AM

Your comments have sent me on a tangent that I have been tossing around for a while. Thanks for the nudge…

Posted by: seed at June 13, 2006 09:51 AM

Please o please tell me this isnt that "new call center" idea Mc'y D's is working on for it's drive threw~

Posted by: Renee at June 13, 2006 01:52 PM

Ryan, your friend could quit and then file an appeal with the unemployment people when they deny her initial claim. This is what I am going through now.

As for outsourcing, it is not, per se, a bad thing, but it is a bad thing when it results in a massive trade imbalance and the foreign labor force can undercut what American workers would be required to be paid by law.

I am happy to pay somewhat more for goods made in this country, the operative word being somewhat, if the difference is too substantial then it gets too expensive to "do the right thing". And that's part of the problem, too many people couldn't give the first damn about anything outside of how much they are paying for the plastic schlock.

But you will never, ever see me setting foot in a Wal-Mart again, unless I get a job shutting them down.

But having to train my offshore replacements?
I'd let them know how badly they are being lowballed. An then train them badly, of course.

Posted by: Johnny Huh? at June 14, 2006 08:01 PM
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