Since when is outsourcing a form of automation?
by Stormy
lifted from an e-mail
The difference between automation and outsourcing becomes stylistically blurred in this NYT’s piece:
During the recession, domestic manufacturers appear to have accelerated the long-term move toward greater automation, laying off more of their lowest-skilled workers and replacing them with cheaper labor abroad.
Since when is outsourcing a form of automation?
The modifying participle phrase “laying off,” grammatically modifies “automation.” A participial phrase adds definition to a noun. For example, the author could have written….”move toward automation,” taking advantage of new computer developments.
Automation is quite different than outsourcing to cheap labor abroad. “Outsourcing” is not automation. If the author had actually cast the sentence properly– “…greater automation AND outsourcing …”–, then he or she would have been obliged to say what percentage is automation and what percentage is outsourcing. Furthermore, automation does not happen overnight…and it is initially expensive. So…during the height of our great recession, manufacturers found money to invest in automation or did they outsource labor abroad, where the investment is not nearly as expensive…if indeed there is any expense.
Apparently the jobs lost will never return. I would ask: Which jobs? The jobs outsourced or the jobs automated.
The author then proceeds to delineate only those jobs that require more advanced skills … as if that is the real problem. I would ask the author to delineate as well some of the jobs outsourced (never to return) and some of the jobs automated (never to return). Instead, the problem seems to be one of education…or at least moving in that direction. In which case, the problem becomes the unemployed’s fault. These new flashy jobs certainly do not pay very much, $18 to $23/hr, $37,440 to $46,000/yr (two week holiday), pre-tax dollars.
If this is the best thinking available to the New York Times, we certainly never will address the problem of jobs. But then, we never have been able to define the root causes of many of our problems with any accuracy. If you have no idea of what is killing you, make out your last will and testament now.
Rdan here…”The jobs, which would pay $18 to $23 an hour, require considerable technical skill.” Maybe the company needs to either invest in training and not whine about government programs not doing it right (“raises policy questions”). It is also possible in this market they are not paying enough to attract already trained workers with ‘considerable technical skill’ and need to pay more. After all it is a competition. Maybe the company refused to help with moving back to the area to a job that pays the same elsewhere?(for those who might have fled to parts unknown in the worker ‘flexibility’ and cost savings companies love), or ‘trained’ workers already have similar or better paying jobs locally and the company refuses to pay prevailing wages for trained workers.
The entry level wages mentioned at 10$ to 12$ an hour have no bearing on jobs needing ‘considerable technical skill’ as a comparison.
Unemployment numbers suck big time…….
Obama’s comments before take off make me think the best he can do is poor spin.
C. Romer (on CNBC) is just plain silly.
Pretty much dead on I think. My guess is that 85% of the job losses are due to outsourcing and 15% to automation. In a lot of the latter, outsourcing is combined with automation. For example, the production of electronic components is highly automated and the number of associated jobs would have shrunk dramatically even if the fabrication work stayed in the US. But in a lot of cases, e.g. consumer DRAM memory, LCD TV/Monitor screens, the fab work either fled to East Asia or was never in the US to begin with.
I think the overwhelming majority of the lost jobs are outsourced rather than automated. Most of them will eventually be automated out of existence I expect, but that’ll be a Chinese/Vietnamese/Korean problem, not a US problem.
Wilcommen zur Wirkichkeit des 21, Jarhhunderts.
From the NY Time article:
“The jobs, which would pay $18 to $23 an hour, require considerable technical skill. On an afternoon last month, Christopher Debruycker, 34, was running such a machine, the size and shape of a camper van parked on the factory floor. Mr. Debruycker, who has been an operator for 15 years, had programmed the machine to carve an intricate part for a flight simulator out of a block of aluminum, and he monitored its progress on a control pad with an array of buttons. We need 10 more people like him, Mr. Peterson said. “
Note that Mr. Debruycker was hired at 19 and obviously didn’t have the technical skills then that he has now. The company trained him. But now they don’t want to give the same training to new employees, they want them to already have the skills – skills you pretty much have to have gotten on the job. A Catch-22 for the un-employed – can’t get a job without training, can’t get training without a job. And BTW, $20/hr [$40K/yr] for someone with considerable technical skill, isn’t shit. No wonder they can’t find anyone.
LOL this post reminds me of the minor furor a few years back when it turned out that IBM had actually applied for a patent on outsourcing. After the application got some public notice I think it got withdrawn but not before pissing off a good number of IBMers who have watched US development jobs leave on a yearly basis.
yeah story here: http://www.techdirt.com/articles/20071005/032654.shtml
Another more recent one here http://www.informationweek.com/news/showArticle.jhtml?articleID=216402013
A few years ago, maybe as many as four, IBM also gave people the choice between being laid off in America and being relocated to an overseas location, with foreign salary. A very senior engineer in High Performance Computing I was working with was fired and offered this. He turned them down and went to another US company. I personally don’t think this is the way to make your existing employees happy and motivated, but maybe the corporate world doesn’t care about that.
The problem with companies not wanting to “waste time” training new empoyees is wide spread. Consider the H-1B imbroglio. What do you think the tech companies mean by a shortage of skilled workers? Not that there aren’t people, but that they don’t want to take the time to train Americans.
One of the issues is what level of training. Is it remedial math and english or how to operate machine X. A lot of stories relate to people not being able to pass tests to see if math skills are at a high school graduate level. Perphaps its people not being good at tests that catches up with them. The New York times cited a company where 9th grade math and reading tests are given and many failed these tests. At that point companies will not teach, because there is to much to be taught. As the article points out in the old days this level of skill was not needed (6th grade was adaquate). Perhaps modify the unemployment system to provide that taking full time remedial classes qualifies one to get the benefits to bring skills up to 10th grade level is one solution. (Let teachers who would otherwise be let go teach these classes).
So its not detailed knowledge of how to do x but rather basic skills that are lacking (consider the 1/3 who drop out of hs as part of it). One other solution for the young although denounced by the right is bring back the CCC and its regimentation including classes as part of the deal, taking folks out of their neighborhood and its issues as a part of the deal.
In summary is it lack of a specific skill (as is the case in parts of IT) or is it lack of basic skills such as are learned in HS that are the problem.
Note that the H-1b issue is for college graduates only not hs grads so that the folks refered to in the article are not in that class. The BLS data http://www.bls.gov/news.release/empsit.t04.htm Show the unemployment rate for dropouts at 14% hs grads at 10.8, some college at 8.2 and 4 year graduate at 4.4%.
What a degree shows more than anything else is an ability to learn something. Given that today job learnings have short half lives one has to be able to learn to keep employed.
Hi Stormy:
Interesting article over at Naked Capitalism by Andy Grove: http://www.nakedcapitalism.com/2010/07/andy-grove-on-the-need-for-us-job-creation-and-industrial-policy.html#comment-132459 “The Need for US Job Creation and Industrial Policy”