The Instigator
Kasrahalteth
Pro (for)
Tied
9 Points
The Contender
Concerned
Con (against)
Tied
9 Points

Outsourcing labor is a serious danger to America's economy and needs to be dealt with.

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Voting Style: Open Point System: 7 Point
Started: 2/13/2008 Category: Miscellaneous
Updated: 9 years ago Status: Voting Period
Viewed: 901 times Debate No: 2615
Debate Rounds (4)
Comments (5)
Votes (6)

 

Kasrahalteth

Pro

Frithaes. There aren't nearly enough debates about outsourcing on this website and I thought I'd fix that.

Outsourcing is a simple enough concept. If an American company outsources all but its top tier, say 10% of its workers, the managers and corporate leaders and whatnot, then all the money spent on its product either goes to the foreign workers or to that top tier. (And possibly the stock holders but I'll address that later.) The top tier (managers and the like) will give back to the country to some degree by buying more products and thusly funding more American companies. However, they make up only 10% of the workforce at our company so there's going to be less consumption of goods than there would have been if all of the workers at our company were in the US. (One family can only own so many refrigerators, for example.) The rest of the money spent on our company's goods go to the foreign workers. That money goes into a veritable black hole. Foreign workers don't buy American goods. So any money spent paying them is lost to the American economy.

Let's say that our hypothetical company makes one billion dollars a year. And let's assume that our top 10% gets 70% of our company's profits. Obviously, that's really optimistic, but I suppose this situation needs a little optimism anyway. So those people get $700 million dollars a year, which they hopefully spend on American goods, and support America's economy. The remaining $300 million goes to foreign workers who buy locally. Therefore, for every year our company exists, the country as a whole loses $300 million. But the 10% of workers in the US split their $700 million and so are doing quite well for themselves. Their profits are up. They're happy.

Now, let's say that our company started outsourcing last year. So up until last year, 90% of its workers were American citizens. Naturally, they were laid off when the company started outsourcing. Let's say our company employs a total of 100,000 workers. So now we have 90,000 American citizens without jobs. Naturally, most just find new jobs. A few don't. Now, our hypothetical company is very successful. Since foreign labor is so much cheaper, it can lower the prices of its product. Naturally, consumers tend to buy the cheapest product. So other, similar, companies either start outsourcing to keep up with its prices or get forced out of business (or possibly bought) by our company. Now, let's say that each of those companies lays off 90,000 workers too. Those workers now look for similar jobs at similar companies. But all have outsourced those jobs to keep up with our company. So those people either go back to school to educate themselves for a different job, or end up unemployed.

Remember that the money normally paid to these workers is now either funneled into that top tier or has been paid to foreign labor, and is out of circulation in the American economy. This is important.

Now, other companies see how well our company is doing for itself, and they start outsourcing too. And the similar jobs in the US are now competing with foreign labor. Since foreign labor is so cheap, they have to compete with those lowered wages. So those people get paid less, and therefore have less money to spend on American goods. We'll come back to this later.

Meanwhile, the collective top tiers of these companies are all rich by now. So they can all afford to fund sympathetic political leaders. So even though unemployment rates are going up, and the country is losing money as a whole, they look the other way.

At the same time the people who own stock in any of our companies are enjoying a bit of a boon as well. These companies are able to get much more profit by paying workers less, and naturally, when the company does well, the stockholders do well.

But back to those unemployed Americans. Now they have to get an education to join that top 10%, or they have to work for significantly lowered wages. Obviously, there's only so much room in that top 10%, and many can't afford a better education anyway because they're working for such low wages and have a family to support. College can cost something like $30,000 a year, not to mention the problems involved with holding a job while getting an education. They can also invest in our rising stocks, but many are very reluctant to invest their income when they don't have any disposable income to lose.

Meanwhile, our top 10% is filthy rich and the stockholders are enjoying a major boon. Life is good for them. And the economy's doing quite well because of the insane profits our companies are making.

But wait. How could this happen? The economic health of the country is somehow distinct from that of the average person?

Here's the kicker. American workers are either unemployed or have significantly lowered wages. At first, consumption is up. Goods are cheaper so they can still afford them. But eventually, they run out of money. And no one's going to buy that new SUV when they're broke. Consumption drops.

Our company's top tier gets nervous. Americans can no longer afford their company's goods. They outsource more labor and lower prices even more.

Consumption goes back up, Americans can afford to buy our company's goods again. But wait. Even more are unemployed now. And wages are down. After all, if someone's not willing to work for $7 an hour now, there are plenty of more desperate people lined up outside the building who'd be happy to replace them.

Our company's top tier is still filthy rich. Now that even American wages are lower, they're making even more profit. Stockholders are still enjoying a major boon.

Back to the American worker. Wages are way down. Unemployment is way up. All the money in our country is either being funneled to the top tier or is paid to foreign workers. No one can afford our company's goods any more.

The top tier is in trouble. They've cut all the costs they can, and still no one will buy their goods. The company collapses. Stockholders lose everything they've invested.

The country enters a depression. Average citizens are completely broke. So are stockholders. The top 10% of those companies is still rich, even though they're probably also unemployed by now. They've got massive amounts of money squirreled away. Life is still fairly good for them. Everyone else, on the other hand, is in some serious trouble.

To make matters worse, all that money that was lost to our economy from paying those foreign workers is hurting us too. America just plain has less money to go around, even if we do rebuild our economy at this point. And a lot of the money we were paying to other countries for other countries was money we didn't have. Ever heard of the national debt?

Obviously this is an extremely oversimplified scenario, but throw in a few more variables, like the raw materials we export to other countries and such, and you've still essentially got the path we're heading on.

The key to our economy is keeping roughly the same amount of money in circulation. Ideally, we'd also be making more money by exporting goods to other countries. But the moment we start outsourcing, we're creating a situation where there's less money to go around. This wouldn't even be much of an issue if we exported goods to other countries, but we import far more than we export, driving up the national debt even more.

So, why, you wonder, do we outsource? Because for that time before we crash our economy, that top 10% can make an obscene profit. And I'd be willing to argue that they know fully well what they're doing, but are just selfish enough to continue. Very few Americans ever look at things in the long run.

So, I guess what I'm looking for is a defense for outsourcing, because I sure can't find one. I'll address some real-world examples of my hypothetical situations (Corporate giants, China buying our debt) in my next argument.
Concerned

Con

I wish there was a plausible defense, but I know of none that makes any sense.
Companies in the USA behave as they do because their key management were taught the basic precepts of capitalism in grduate school, along with the philosophy of "profits at any cost". In the USA, management has a decidedly short vision of success commonly referred to as the quarterly P&L report. All the issues you raised become second thoughts to those that have been taught that the only thing that is important is a new and higher level of profits during the current quarter. It is not consequential that jobs are lost, wages are reduced or that the American consumer is hurting, because the invisible hand of free market capitalism will ultimately prevail---what nonsense???

Capitalism needs to be regulated so that economic and financial decisions are tempered by the needs and welfare of Americans. Unfortunately, there seems to be no appetite for restricting our out of control economic system. Our country may have to go into a severe depression and/or a revolution before the powers that be recognize that our corporations and our government have sold out America--for a profit of course!! It was Thomas Jefferson who said it best when he cautioned on the nature of business--"the merchant has no country".

I'm sorry to have ruined the debate, but I concede 100% to your position.
Debate Round No. 1
Kasrahalteth

Pro

If you agree with me then why in Frith's name did you accept the challenge?!

But at any rate, nice to see someone who agrees, I guess. And I can always start another debate.

And I have to say you're a good deal more optimistic than I am. America, in my experience, never seems to learn from its mistakes.

Just look at the Great Depression. You'd think we'd have learned to get the government regulating business after that. Or after the Industrial Revolution, monopolies and child labor and all that.

Heck, you can find a good example of the government looking the other way while businesses take advantage of people in just about any time period. It goes back to the inception of our country, really. We couldn't declare slavery illegal in the Constitution because it would upset the southern plantation owners.

But I suppose that it's always good to be a bit optimistic. More power to you. I'm an incurable pessimist, myself.

And in all honesty, I'm not at all surprised about our philosophy of "profits at any cost", as you put it. Americans, as a whole, can't see the big picture.

Other than the idea of instant gratification, those business decisions just plain don't make sense. Pump up the profits, and when things go sour, take the money and run. I've always thought that was incredibly stupid. In the long run, you'd make more money and have a much smaller chance of being sent to prison if you just ran a decent company.

I also like to think that if there was one somewhat legit company out there, that hired Americans and paid them decent wages and gave them benefits, that people would buy their product just because they want to help.

More realistically, though, I don't see that happening. American consumers are just as materially obsessed as the guys in charge of those corporations.

But, like I said, I'm an incurable pessimist. I do hope I'm wrong.
Concerned

Con

I can understand your pessimism. It does not take a rocket scientist to surmise the depth of our present day woes. I believe that pessimism can be the first step towards innovative action providing that one keeps an open mind.

I can not disagree with your summary of man, history and his failure to learn from the past. We do continue to repeat yesterdays blunders just as though they never happened. Unfortunately, there is nothing that can be done by people, government, societies or businesses that can change our inevitable instinct to perpetuate failure. At best, one person, with a strong sense of conviction and perseverance can influence history for a relatively short period of time before he or she is compromised. In the time we have in this world, we owe it to ourselves to do what we can to lead a full and satisfying life.

If one is fortunate enough to be naive about the forces that dictate his living condition, then life would be somewhat simplistic as he tends to place difficult issues into the hands of government, god or simply fate. Frequently, a prayer or internal surrender is sufficient to solve any of life's difficulties, and he proceeds through life in relative comfort. For the majority who live this way, truly ignorance is bliss.

On the other hand, there are a handful of people who recognize the causes of economic, political and social strife. They have a talent for recognizing the source of man's afflictions, but their knowledge becomes a heavy weight throughout their lives. Most of these people I refer to as the unfortunates because their knowledge of inequity and injustice becomes a burden which can only be lifted through positive action. Pessimism becomes the residue of knowledge without action.

You appear to be one of the unfortunates whose talent to understand man's problems has become a burden. I share this knowledge and the subsequent burden, and I, too, have bouts of deep seated pessimism. I have temporarily relieved my personal weight with political and social activism that I felt made a difference. In some cases I have been truly successful while in others I have just deceived myself. None the less, I continue to try to make a difference because I can not stand the defeatism that accompanies pessimism. Recently, I wrote and published a book titled "The Road to the Third World:Conspiring to Destroy America". This novel was the product of a sustained period of apathy, and became a pressure relief valve for my inactivity. The book is simply another attempt to wake up Americans to the social, economic and political excesses that threaten to destroy our country. From your arguments, there is little question in my mind that you will ultimately be drawn to activism because you will come to know pessimism is a temporary drug, and is not a solution. Good luck to you and use your knowledge to improve America. Even if you fail, you will feel better having tried.
Debate Round No. 2
Kasrahalteth

Pro

Pessimism is also the first step to becoming a jaded drunkard, but I like to think I'm a bit more likely to end up as an activist.

Nice philosophy, though. In the scheme of things, the best you can do is make a dent before everything defaults back to its usual self-perpetuating failure. I won't deny it.

But you're right, of course. The best you can do is to live out your life as best you can.

And I quite agree with your ‘ignorance is bliss' logic. Seeing as I'm in high school, and therefore completely surrounded by totally vacant types I can definitely empathize. They'll believe what anyone tells them as long as they're an authority figure. I expect that every generation feels this way about the teens of the time, but they seem exceptionally impressionable and apathetic. The thought that they'll eventually be leading this country frightens me. But at least they're all happy.

And there's one thing I don't get about your unfortunates. Why aren't there more of them? Like you said, it doesn't take a rocket scientist to realize what's going on. There has to be a point where people aren't ignorant, they just refuse to acknowledge the facts.

And when you say recent, you really mean it. Your book was only published on January 8th! I'll certainly have to read it, though. It sounds interesting.

One thing I don't get, though. The name David Paine makes sense. David, I assume, is a reference to David and Goliath, although in your case, David loses to the giant. And of course Paine is a reference to Thomas Paine, who helped spark the American Revolution. Together the name makes perfect sense for someone who starts a revolution, but in the end is destroyed by the giant he attempts to overcome. But why Todd Robbins?

And I certainly won't deny that I'll eventually get drawn into political activism. As it is, I can manage to alienate every Republican within a fifty foot radius. It's only really a matter of time before I attempt to convert all of them.
Concerned

Con

Hi again,

I sensed that you could never be a die hard pessimist. You have too much perception to surrender in such an insidious manner. None the less, it is good that you view yourself as a potential activist. Welcome to the unfortunates!

I think you may be a little harsh on your contemporaries. In high school and college, there are very few people who think as you do. Youthful pursuits definitely take precedence over political and economic issues, and they should. Our youth will be dragged into the quagmire soon enough.

I am of sufficient age where I recall the heady days of the late 60's and 70's. Here the so called baby boom generation riotously announced their firm opposition to status quo. There was a tremendous anti-establishment outcry, and it seemed that they just might make a difference. As we fast forward to 2008, I can safely state that the establishment has gotten stronger, wealthier and wields much more power. So much for the generation who cautioned on trusting anyone older than 30. The point here is that an entire generation can be chastised for failing to make a positive difference--in spite of their boisterous rhetoric and their concerns about their futures.

This brings me to your point about weather people are just ignorant or they simply refuse to acknowledge the facts. I sincerely believe most people understand that things are not right in America. They are not totally ignorant, but rather they become confused as to what they can do about the problem. Political spin can make rambling idiots out those who refuse to balance the news of the day with their own insights. Thrown in the fact that most wind up marrying, procreating and raising a family, and the thoughts of social injustice become secondary to providing a living. Again, they sense something is wrong, but now they are even less capable of seeking out the facts. The long term potential of economic disaster escapes them as they seek to provide for their own needs. In a way, they are not apathetic or ignorant, but rather simply bogged down just getting by in life.

The power brokers in America recognize these inherent traits, and true to our system, capitalize on this basis weakness in order to enhance their own position. They know that the vast majority of all Americans are either too vested in the system or too indebted to the system. In other words, they are either too rich or they survive through government jobs, government controlled industries, social security, unemployment, welfare, food stamps or a plethora of other crumbs which effectively emasculates the ability of most to stand up to injustice. So it is that most know that something is wrong in America, but lack the will and motivation to understand what is wrong. Rather, they hope that somehow things will continue and perhaps may even get better because their elected officials said they would! If you have an opportunity, check out an article about the "Status Quo" at WWW.authorsden/stephencafaro.

You truly have an unusual perception and you got right to the root of David Paine. To date, no one else has guessed the name inference. As to Todd Robbins, his name is without such meaning because of the vacillating nature of the character. I'm afraid you will have to read the book to understand Todd.

One final note on your political activism. I'm sure you can be successful if you continue to hone your knowledge and your perception. But please don't exclude the Democrats as you alienate the Republicans. Neither party has done anything substantial to stop the decline of America. Indeed, NAFTA was passed into law with the approval of a Democratic administration after a succession of Republican administrations failed in that effort. Much like the total failure of the baby boom generation, the Democrats and Republicans have both condoned the policies that led America into decline. The two parties are bed mates who invent supposedly conflicting polices in order to differentiate themselves, but one need only step back to understand they answer to a different master.
Debate Round No. 3
Kasrahalteth

Pro

I'm apparently a member of a group you call the ‘unfortunates'. Not sure how I'm supposed to feel about that.

And while I'm certainly pessimistic, I'm not totally inactive because of it. Which is a happy medium, do things and expect failure. If you fail, you were right, if you succeed, it's a pleasant surprise. And it sure beats doing nothing at all.

I certainly won't deny that I'm too harsh with my fellow students. But just think, hundreds of people and no one worth talking to. It would get to anyone, eventually. Small comfort that when I get dragged into the real world, I'll at least be a little more prepared than they are.

Ah, the sixties. I'd be willing to argue that almost every movement during the sixties was a result of a bunch of kids scared of getting drafted. When they started protesting, other groups that until then had been languishing in the shadows jumped on the bandwagon and organized their own protests. And the kids jumped on the wagon because it was rebellious.

And just think, if the baby boom generation was such a failure, then what will their kids be like? I can't say much for their parenting.

Naturally you're right about our citizens. But I still have to think that they're rationalizing at least a little. Why deal with political troubles when it's so much easier not to? Just ignore it. Naturally, they can't just decide to ignore something that important, so they rationalize away facts until they just start believing what they're telling themselves.

And I can't say I totally agree that the vast majority of Americans are so vested or dependent on the system. To some extent it's true, and in an ideal world (for the power brokers, that is) it would be. But there's the massive grey area of the middle class. They're not totally dependent on the system, and they also don't control it. I'd have to say the blame for our lack of reform lies with them. Provided, they have lives and are pretty distracted, but you'd think they'd wake up to the fact that more and more of them are being driven out of the middle class by big business.

I also can't say I can respect a group of people who know something is awry but lack the "will and motivation" to figure it out. If they're willing to stand by as their freedoms are taken from them, and they know fully well it's happening, I'd have to say they deserve it. Maybe it would knock some sense into them, anyway. They'll start reforming once they're really scared.

The article, by the way, is excellent. Nice job keeping it short and concise.

And thanks, I guess. I'm a literature nerd and a big Thomas Paine fan. And it helps that one of the book reviews summarizes most of the book's plot, so I was able to infer the meaning of his name based on what ended up happening to him.

And naturally, I have little more respect for Democrats than I do for Republicans as parties. You're right, although they differ on inconsequential social issues, they're fundamentally the same. However, average joes that call themselves democrats and republicans differ quite wildly. Neither group has opinions on important issues, since for the most part they give them very little thought. There's a lot to be said for our habit of distracting from the parties' identical views by only stressing social issues; it works. But at any rate, my opinions on social issues are more liberal than anything, and I'm not shy about it. So I'm talking more about upsetting individuals than targeting groups.

At any rate, it was nice talking to you, and I'll be sure to read your book when I get around to it.
Concerned

Con

I call the perceptive few the unfortunates because of the difficult life they will ultimately live. They will be drawn to activism only to be frequently crushed by opportunists. They will oppose the seemingly obvious trespasses only to be mocked by the very people they seek to assist. They will become frustrated even in success as they see the fruits of their labor slowly diminished by the silent forces of the ruling minority. And yet, they will continue to battle the forces of social and economic injustice because they see America deteriorating. To do nothing is to die, and too often, to do something brings on a wave of futility. There is a roller coaster of emotions that causes the dedicated activist to frequently question his/her own motivations. In a way, the unfortunates are too purist in their goals, and for this, they will suffer with the pains of inadequacy. But the true unfortunates continues to return to the quest because they have no choice.

My final take on the Democrats and the Republicans is that they are as one, and have been for the last 50 years. I have no interest in either party because I refuse to play the fool. As an Independent, I can at least refuse to acknowledge the validity of either of these political establishments. They represent the ultimate spin, and corruptly use the issues of divide and conquer to control the masses.

I view labels like liberal and conservative in much the same way as I view political parties. They are meant to confuse the people with theoretical rubbish which has little to do with the welfare of America. Subsequently, I refuse to be pigeon holed in one of the convenient groups.

I will proclaim myself an American, and I will further state that I am an avowed nationalist. I think the concept of free trade is bunk perpetuated by the financial elitists, but I love the idea of true competition as it exists in fair trade. I think capitalism is a great system that answers to man's instinctive trait of self interest, but I also believe that capitalism must be regulated so as it provides for the welfare of all Americans. All this by way of saying I believe charity does begin at home, and unless we soon recognize this basic adage, then America will surely continue to diminish in power, influence and economic viability.

Good luck to you in your future pursuits. I'm sorry to have interrupted your debate on outsourcing America. Please post it again. I am sure you will get a worthy opponent. If you do have the opportunity to read my book, please take a few minutes to post a review at Amazon, Barnes and Noble, and/or Authors Den. Keep up the good work!
Debate Round No. 4
5 comments have been posted on this debate. Showing 1 through 5 records.
Posted by Kasrahalteth 9 years ago
Kasrahalteth
I'll only argue what I believe is correct. Whether or not my opinions are nonsense remains to be seen.

Although if it's alright by you, it's probably not best to start another debate right away. I'm going to be away from my computer for a few days, and I really wouldn't want to miss the time limits.
Posted by JamesIsrael 9 years ago
JamesIsrael
Sure, but no nonsense and slippery slope arguments.
Posted by Kasrahalteth 9 years ago
Kasrahalteth
My opponent conceded! Why on earth is voting tied?! I already knew that people didn't read these debates before voting, but could they at least glance at them?

And James, if you think outsourcing is such a good idea, I'd be glad to debate you on it. No need to post a bunch of information where no one will read it when you can argue instead.
Posted by JamesIsrael 9 years ago
JamesIsrael
Adam Smith once said in his Inquiry into the Wealth of Nations that "perfect liberty" must be nurtured in an environment of competition and perfect mobility. In the most simplest terms, the capitalist system we have today is defined by the characters of competition and mobility. That is, the mobility of employment, labor, resources, and capital. This definition is also coherent to today's rhetoric of outsourcing.

On the surface (as portrayed by our most excellent and objective mass media), outsourcing is the worst nightmare the soeciety and individual workers can expect: people lose jobs, income drops, consumption drops, economy goes into recession, big bosses make billions, and then end of the story. Seriously, I wish everything in the world could be this simple.

Unfortunately for our already tormented, stressful minds, the reality on the market is quite different. I will divide my analysis to back the "con" side into several sections, respectively:

1. In relation to the microeconomic concepts of opportunity cost, specialization, and comparative advantage

2. The ignored benefits of outsourcing

3. The inevitability of outsourcing

4. How to remain competitive in today's globalized economy

I will provide analysis for the above four topics in relation to the positive effects of outsourcing in my following posts. Stay tuned!
Posted by aceofelves 9 years ago
aceofelves
Is that really Patrick Henry or just some kid pretending to be him ?

I agree that sending jobs overseas is very detrimental to America.

Did I mention that I'm Christopher Tolkien? Haha just kidding!
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