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About Offshoring and Globalization
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amin...@gmail.com
Dec 8, 2019, 5:20:32 PM12/8/19
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Hello,
About Offshoring and Globalization:
Why Is Offshoring a Concern? Despite the gain from
specialization and trade that offshoring brings, many
people believe that it also brings costs that eat up the
gains. Why?
A major reason is that offshoring is taking jobs in
services. The loss of manufacturing jobs to other
countries has been going on for decades, but the U.S.
service sector has always expanded by enough to create
new jobs to replace the lost manufacturing jobs. Now
that service jobs are also going overseas, the fear is that
there will not be enough jobs for Americans. This fear
is misplaced.
Some service jobs are going overseas, while others
are expanding at home. The United States imports
call center services, but it exports education, health
care, legal, financial, and a host of other types of
services. Jobs in these sectors are expanding and will
continue to expand.
The exact number of jobs that have moved to
lower-cost offshore locations is not known, and estimates
vary. But even the highest estimate is a tiny
number compared to the normal rate of job creation.
Winners and Losers Gains from trade do not bring
gains for every single person. Americans, on average,
gain from offshore outsourcing, but some people lose.
The losers are those who have invested in the human
capital to do a specific job that has now gone offshore.
Unemployment benefits provide short-term tempo-
rary relief for these displaced workers. But the long-
term solution requires retraining and the acquisition of
new skills.
Beyond providing short-term relief through unemployment
benefits, there is a large role for government
in the provision of education and training to enable
the labor force of the twenty-first century to be capable
of ongoing learning and rapid retooling to take on new
jobs that today we can’t foresee.
Schools, colleges, and universities will expand and
get better at doing their jobs of producing a highly
educated and flexible labor force.
Read the rest of my previous thoughts to undertand more:
About competitiveness and Offshoring and Globalization..
1. We can reduce the payroll without laying off, by lowering wages. It will be argued that lowering wages will reduce purchasing power. But this is not certain since the effort of competitiveness is driving down prices. We could theoretically keep the same standard of living with lower wages and lower prices!
2. We can increase competitiveness without reducing the payroll or the number of workers. This requires basic research, applied research to develop new manufacturing processes or new products, investment and training. It is in fact the best solution, that which leads to increased production, wages, employee skills and standard of living.
And i have to be more precise about Offshoring, first i said before the following:
-----
Offshoring increases demand for more workers
"qualified" and also has a significant positive effect on
productivity, in Canada it is an increase in the "productivity" of
order of about 10%, also according to some recent research
the Offshoring of materials and services have both a
positive and not negligible effect on productivity.
When it comes to the repercussion on employment, the majority of empirical studies suggest that the general repercussions of offshoring on the employment levels are low (Amiti and Wei 2005, Mankiw and Swagel 2006).
For proof, read the following document:
https://translate.google.com/translate?hl=en&sl=auto&tl=en&u=https%3A%2F%2Fwww150.statcan.gc.ca%2Fn1%2Fpub%2F11f0027m%2F2008055%2Fs6-fra.htm
------
But to be more precise you have to understand more what is
happening with multinationals, so read the following to understand
more about U.S. multinationals:
• The worldwide operations of U.S. multinationals are highly concentrated in America in their U.S. parents, not abroad in their foreign affiliates. The idea that U.S. multinationals have somehow “abandoned” the United States is not supported by the facts. They maintain a large presence in America, both relative to the
overall U.S. economy and relative to the size of their foreign affiliates.
• International engagement drives the overall strength of U.S. multinational companies. Although the United States is still the world’s largest single-country market, in the past generation it has been a slow-growth market compared with much of the world. Even with today’s worldwide recession, this means that the overall strength of U.S. multinationals is increasingly tied to their success in both America and abroad. It also means that viewing the domestic and foreign operations of U.S. multinationals as unrelated is increasingly incorrect. U.S. multinationals must make strategic investment and employment decisions from a truly global perspective, with links across all locations and with dynamic variation in successful strategies both across
companies at a point in time and within companies over time.
• Foreign-affiliate activity tends to complement, not substitute for, key parent activities in the United States such as employment, worker compensation, and capital investment. Being globally engaged requires U.S. multinationals to establish operations abroad and also to expand and integrate these foreign activities with their U.S. parents. The idea that global expansion tends to “hollow out” U.S. operations is incorrect. Rather, the scale and scope of U.S. parent activities increasingly depends on successful engagement abroad. Expansion by
U.S. parents and their affiliates contributes to the productivity and average standard of living of all Americans.
Read more here:
https://www.uscib.org/docs/foundation_multinationals.pdf
Read the rest of my previous writing:
About populism..
I think the populist upsurge ultimately originates from two major sources: globalization and the rise of left-liberalism.
But i think we have to be more aware about Globalization and immigration:
First let us look at Offshoring:
Offshoring increases demand for more workers
"qualified" and also has a significant positive effect on
productivity, in Canada it is an increase in the "productivity" of
order of about 10%, also according to some recent research
the Offshoring of materials and services have both a
positive and not negligible effect on productivity.
When it comes to the repercussion on employment, the majority of empirical studies suggest that the general repercussions of offshoring on the employment levels are low (Amiti and Wei 2005, Mankiw and Swagel 2006).
For proof, read the following document:
https://translate.google.com/translate?hl=en&sl=auto&tl=en&u=https%3A%2F%2Fwww150.statcan.gc.ca%2Fn1%2Fpub%2F11f0027m%2F2008055%2Fs6-fra.htm
And now about immigration:
Look at this following video about:
Why Does the USA Need More IMMIGRANTS?
You will notice that the West "needs" immigrants because they are also
good for economic "growth".
But please look carefully at the following video to understand more:
https://www.youtube.com/watch?v=DmRgnDrhE9o
And about Trade and Globalization:
The Case Against Protection
For as long as nations and international trade have
existed, people have debated whether a country is
better off with free international trade or with
protection from foreign competition. The debate continues,
but for most economists, a verdict has been delivered,
Free trade promotes prosperity for all countries; protection is
inefficient. We’ve seen the most powerful case for free
trade—it brings gains for consumers that exceed any
losses incurred by producers, so there is a net gain for
society.
And about globalization..
1- Globalization has created new opportunities for firms to develop business models and offerings that have a higher intensity of R&D, innovation and capital. Many of the goods and services that have entered the market over the past decades have exactly those features, and without globalization, firms would have been forced to continue with business models that work with a smaller volume of sales. Firms have been able to specialize more than before and, as a consequence, human capital and the share of skilled jobs in the economy have grown remarkably. Today, advanced economies have a greater share of better-paid and better-skilled jobs than ever before.
2- Globalization has increased real wages for people in Western economies by making products cheaper or reducing the pace of price increases. If the typical goods that every household purchases had followed domestic rather than international price developments, consumers would have been poorer and saddled with products of lower quality.
3- Globalization has made significant contributions to productivity growth and, as a consequence, further raised living standards. Globalization has been particularly important for enabling new technology to spread fast across markets. In the long term, it is the speed of technological improvement that sets the pace for how richer societies get.
However, trade and investment are not growing fast anymore, and there is much suggesting that the decline in trade and investment growth is one explanation to the failing dynamism of Western economies. While some appreciate the decline in the growth of globalization, those who care about the prosperity of a society should deplore it and make efforts for the world economy to return to high levels of trade growth.
Read the following study to know more about globalization:
The Economic Benefits of Globalization for Business and Consumers
http://ecipe.org/publications/the-economic-benefits-of-globalization-for-business-and-consumers/
Thank you,
Amine Moulay Ramdane.
About Offshoring and Globalization:
Why Is Offshoring a Concern? Despite the gain from
specialization and trade that offshoring brings, many
people believe that it also brings costs that eat up the
gains. Why?
A major reason is that offshoring is taking jobs in
services. The loss of manufacturing jobs to other
countries has been going on for decades, but the U.S.
service sector has always expanded by enough to create
new jobs to replace the lost manufacturing jobs. Now
that service jobs are also going overseas, the fear is that
there will not be enough jobs for Americans. This fear
is misplaced.
Some service jobs are going overseas, while others
are expanding at home. The United States imports
call center services, but it exports education, health
care, legal, financial, and a host of other types of
services. Jobs in these sectors are expanding and will
continue to expand.
The exact number of jobs that have moved to
lower-cost offshore locations is not known, and estimates
vary. But even the highest estimate is a tiny
number compared to the normal rate of job creation.
Winners and Losers Gains from trade do not bring
gains for every single person. Americans, on average,
gain from offshore outsourcing, but some people lose.
The losers are those who have invested in the human
capital to do a specific job that has now gone offshore.
Unemployment benefits provide short-term tempo-
rary relief for these displaced workers. But the long-
term solution requires retraining and the acquisition of
new skills.
Beyond providing short-term relief through unemployment
benefits, there is a large role for government
in the provision of education and training to enable
the labor force of the twenty-first century to be capable
of ongoing learning and rapid retooling to take on new
jobs that today we can’t foresee.
Schools, colleges, and universities will expand and
get better at doing their jobs of producing a highly
educated and flexible labor force.
Read the rest of my previous thoughts to undertand more:
About competitiveness and Offshoring and Globalization..
1. We can reduce the payroll without laying off, by lowering wages. It will be argued that lowering wages will reduce purchasing power. But this is not certain since the effort of competitiveness is driving down prices. We could theoretically keep the same standard of living with lower wages and lower prices!
2. We can increase competitiveness without reducing the payroll or the number of workers. This requires basic research, applied research to develop new manufacturing processes or new products, investment and training. It is in fact the best solution, that which leads to increased production, wages, employee skills and standard of living.
And i have to be more precise about Offshoring, first i said before the following:
-----
Offshoring increases demand for more workers
"qualified" and also has a significant positive effect on
productivity, in Canada it is an increase in the "productivity" of
order of about 10%, also according to some recent research
the Offshoring of materials and services have both a
positive and not negligible effect on productivity.
When it comes to the repercussion on employment, the majority of empirical studies suggest that the general repercussions of offshoring on the employment levels are low (Amiti and Wei 2005, Mankiw and Swagel 2006).
For proof, read the following document:
https://translate.google.com/translate?hl=en&sl=auto&tl=en&u=https%3A%2F%2Fwww150.statcan.gc.ca%2Fn1%2Fpub%2F11f0027m%2F2008055%2Fs6-fra.htm
------
But to be more precise you have to understand more what is
happening with multinationals, so read the following to understand
more about U.S. multinationals:
• The worldwide operations of U.S. multinationals are highly concentrated in America in their U.S. parents, not abroad in their foreign affiliates. The idea that U.S. multinationals have somehow “abandoned” the United States is not supported by the facts. They maintain a large presence in America, both relative to the
overall U.S. economy and relative to the size of their foreign affiliates.
• International engagement drives the overall strength of U.S. multinational companies. Although the United States is still the world’s largest single-country market, in the past generation it has been a slow-growth market compared with much of the world. Even with today’s worldwide recession, this means that the overall strength of U.S. multinationals is increasingly tied to their success in both America and abroad. It also means that viewing the domestic and foreign operations of U.S. multinationals as unrelated is increasingly incorrect. U.S. multinationals must make strategic investment and employment decisions from a truly global perspective, with links across all locations and with dynamic variation in successful strategies both across
companies at a point in time and within companies over time.
• Foreign-affiliate activity tends to complement, not substitute for, key parent activities in the United States such as employment, worker compensation, and capital investment. Being globally engaged requires U.S. multinationals to establish operations abroad and also to expand and integrate these foreign activities with their U.S. parents. The idea that global expansion tends to “hollow out” U.S. operations is incorrect. Rather, the scale and scope of U.S. parent activities increasingly depends on successful engagement abroad. Expansion by
U.S. parents and their affiliates contributes to the productivity and average standard of living of all Americans.
Read more here:
https://www.uscib.org/docs/foundation_multinationals.pdf
Read the rest of my previous writing:
About populism..
I think the populist upsurge ultimately originates from two major sources: globalization and the rise of left-liberalism.
But i think we have to be more aware about Globalization and immigration:
First let us look at Offshoring:
Offshoring increases demand for more workers
"qualified" and also has a significant positive effect on
productivity, in Canada it is an increase in the "productivity" of
order of about 10%, also according to some recent research
the Offshoring of materials and services have both a
positive and not negligible effect on productivity.
When it comes to the repercussion on employment, the majority of empirical studies suggest that the general repercussions of offshoring on the employment levels are low (Amiti and Wei 2005, Mankiw and Swagel 2006).
For proof, read the following document:
https://translate.google.com/translate?hl=en&sl=auto&tl=en&u=https%3A%2F%2Fwww150.statcan.gc.ca%2Fn1%2Fpub%2F11f0027m%2F2008055%2Fs6-fra.htm
And now about immigration:
Look at this following video about:
Why Does the USA Need More IMMIGRANTS?
You will notice that the West "needs" immigrants because they are also
good for economic "growth".
But please look carefully at the following video to understand more:
https://www.youtube.com/watch?v=DmRgnDrhE9o
And about Trade and Globalization:
The Case Against Protection
For as long as nations and international trade have
existed, people have debated whether a country is
better off with free international trade or with
protection from foreign competition. The debate continues,
but for most economists, a verdict has been delivered,
Free trade promotes prosperity for all countries; protection is
inefficient. We’ve seen the most powerful case for free
trade—it brings gains for consumers that exceed any
losses incurred by producers, so there is a net gain for
society.
And about globalization..
1- Globalization has created new opportunities for firms to develop business models and offerings that have a higher intensity of R&D, innovation and capital. Many of the goods and services that have entered the market over the past decades have exactly those features, and without globalization, firms would have been forced to continue with business models that work with a smaller volume of sales. Firms have been able to specialize more than before and, as a consequence, human capital and the share of skilled jobs in the economy have grown remarkably. Today, advanced economies have a greater share of better-paid and better-skilled jobs than ever before.
2- Globalization has increased real wages for people in Western economies by making products cheaper or reducing the pace of price increases. If the typical goods that every household purchases had followed domestic rather than international price developments, consumers would have been poorer and saddled with products of lower quality.
3- Globalization has made significant contributions to productivity growth and, as a consequence, further raised living standards. Globalization has been particularly important for enabling new technology to spread fast across markets. In the long term, it is the speed of technological improvement that sets the pace for how richer societies get.
However, trade and investment are not growing fast anymore, and there is much suggesting that the decline in trade and investment growth is one explanation to the failing dynamism of Western economies. While some appreciate the decline in the growth of globalization, those who care about the prosperity of a society should deplore it and make efforts for the world economy to return to high levels of trade growth.
Read the following study to know more about globalization:
The Economic Benefits of Globalization for Business and Consumers
http://ecipe.org/publications/the-economic-benefits-of-globalization-for-business-and-consumers/
Thank you,
Amine Moulay Ramdane.
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