Sunday, January 07, 2007

Outsourcing - Continued

MHA's thought provoking post on the outsourcing phenomenon prompted a bit of data mining on my part concerning sector employment. Using data from the BLS and the BEA I came up with the following comparative numbers with 1983 as a start point and 2006 as the end point:
"Production occupations" encompass all of what would have been considered manufacturing jobs during the 'industrial age' and does not address occupations relating to the 'information age' in a manner consonant with an understandable definition of "production". Instead the "production worker" of the information age is booted up to "Professionals and related occupations" or "Management, business, and financial operations". Thus Robert Reich can babble interminably about "millions of jobs lost to outsourcing" while blithely ignoring the many more millions of jobs created through the transition from an industrial (read "Union, Union, Union") economy to an information economy. The GDP number indicates that we are "producing" a great deal more (76%) of something today than we were in 1983 - and that the labor component of that production has dropped sharply as a component of total cost.

While I agree wholeheartedly with the central thesis that outsourcing has become integrated today, I wonder where the workers will come from should more companies come to the same decision regarding opening plants in the US? As Morgan has noted, the workforce cannot grow much further over the next 8-10 years without an increase in the total participation rate beyond historical highs.

ENDNOTE: Did you know that the GDP had grown by 14.6% after eight years when Bubba's Bubble popped while it has grown 13.7% at six years under President Bush's tenure? If it continues to grow over the next two years as it has over the past six it will have increased by 17.9% when President Bush leaves office. Somehow I doubt that the news will make the papers....


buddy larsen said...

There is the demographic problem but relative to the four horsemen (tax, trade, monetary, & regulatory policy)that from a Democrat DC threaten the global economy, it's minor--as it self-adjusts to conditions, unlike policy fiats that kill markets.

loner said...

Personally, I've always thought that the main problem here is that, for instance, a small company orders an accounting package that comes on a CD from a vendor (reseller) from whom they can get a discount and when it doesn't come they spend hours and hours on the phone with nice people who are obviously not in the United States trying to find out when it will come and then trying to get their credit card credited because they've gone elsewhere to purchase it at no discount. Not that I have had that happen or anything.

Those types of problems will sort themselves out over time and the world, from a communications and transportation point of view, will continue to get smaller and smaller.

There will be jobs and there will be bodies to fill them...whether those bodies speak English or need a translator is another matter. Crap products, sent off to landfills without a second thought, and the companies which sell them in bulk will continue to proliferate. Politicians will continue to tax, borrow, spend and pander whenever and wherever they can. The media will continue to get nearly everything wrong. The quality of service in restaurants will continue to decline.

The quality of service in restaurants will continue to decline. That one depresses me.

buddy larsen said...

Loner, any drier and we'd dessicate before the nut graf--

Rick Ballard said...


Look on the bright side - when you drop down to Oregon you get your gas pumped for FREE! Sure, the attendant is a surly mumbling lout but FREE SERVICE is nothing to sneer at.


They don't have the votes to override a veto. That is, if the President ever signs one.

buddy larsen said...

Rick, the present danger is from the pressure to 'make a deal'. Remember how George Mitchell maneuvered (swindled) Poppa.

Rick Ballard said...


Which time?

I share your concern about the President's willingness to compromise - McCain/Feingold comes to mind. The hope is that the realization that there is very little to gain is sinking to the marrow.

Anonymous said...

I hate those Commie Oregonian gas stations.

buddy larsen said...

oh, me too, hate em.

Anonymous said...

See? See? I noo Buddy wuz OK.

loner said...

It's also cheaper on the other side of the Columbia, which, IIRC, was not the case across another river, the Delaware, when a Pennsylvanian found himself short of gas, and lawfully unable to pump it himself, in New Jersey. Probably taxes.

These days I'm using maybe five to ten gallons a month. In Los Angeles I was using between 75 and 100 gallons a month. I've gotten gas (I haven't filled up since I've been here) three times in Washington and three times in Oregon during the past three months. If Mount Hood is visible and I feel the need to bring the needle above the quarter mark, I cross the river and stay reasonably warm while an attendant does my bidding.

And yet, I miss L.A.

Anonymous said...

I believe that New Jersey and Oregon are the only two polities in which ukazes have been promulgated forbidding people from pumping their own. It is unsafe, you see.

And I can also see why one would miss L.A., though I do not. It all depends on what you like.

Luther said...


Have you heard of a burg up your way named La Center? I lived 9 miles northwest of there, for 12 years, a while back. If she's still there check out Anne's berry farm. U-pick blue and straw berries, and she doesn't count what you eat in the field.

If you can stand the weather, the place will grow on you. Then again, it is not LA.


You are correct on the "only two polities." If I remember correctly they had a couple of votes in Oregon to change the law, but obviously the voter's said no.

Rick Ballard said...

"the place will grow on you."

A good fungicide will help control that problem. When I get up there I'm gonna put a "Let There Be Light" bumpersticker on one side and a "Stihl" bumpersticker on the other. That or '42" Bars Are for Sissies'.

Luther said...


LOL on the "A good fungicide." And if you do the "42 in." you will fit right in.

I would not have moved had it been my choice alone. But the better five- eights family called. I now enjoy my seven months of perfect, my two of unpredictable and my three of, damn its hot.

Anonymous said...

Loner, Luther, Rick:

You have your solace in the fact that Carl's Jr. has relentlessly inched its way northward and has a beachhead across the Columbia, in fact extending all the way to the northern suburbs of Vancouver WA. But when it gets to that little greasy spoon in Kalama, the offensive may grind to a halt. Plus, north of Kalama are the formidable citadels of the Rib Eye in Chehalis, the Country Cousin in Centralia, and the Farm Boy in Maytown. But they are arrayed against formidable forces. Thus the Californian Hamburger Offensive could go either way. It remains too close to call.

Anonymous said...

The name of the first-mentioned joint had escaped me - it is the Kalama Burger Bar.

I known you are all thrilled.

MeaninglessHotAir said...

Nice article, Rick.

loner said...

My wife so hates the Carl's Jr. milkshake commercials that you'd almost think she took the job up here to escape them. The first time one came on she practically wailed: They have Carl's Jr. here? By that time, I even knew where. Interestingly enough, I stumbled upon that one on this side of the river while looking for a health food store. Suddenly, I think to myself: Isn't that store next to Borders called Wild Oats Natural Market Place? Talk about focusing. I was looking for a health food store because someone told my wife that unfiltered apple cider vinegar in sufficient amounts does something good to good cholesterol or bad to bad cholesterol and somebody who took blood out of me told me something needed to be done about my count. They suggested drugs. I'm trying vinegar and, as the blood pressure drug is in short supply and that one I know I need, I'll have to go to those people who took blood out of me and have them do it again.

I'm taking notes (thanks Luther & Skook for the recommendations) for when I'm on the drugs and/or sufficiently unfocused.


Evan said...

Terrific chart. That this whole meme of deindustrializing our way to poverty gets so much press is a real disapointment.

Knucklehead said...

To resurrect a piece of the discussion from the preceding thread re: "outsourcing" or "overseasing", I think an accepted and reasonably accurate term is offshoring (see also).

This has been going on forever. The Europeans loathed Americans for it once upon a time. I was first introduced to it in roughly the mid-eighty's when among the last of the large scale "data entry" (i.e, keypunch) operations were being offshored.

The building of large cargo shipping is an excellent example of how it works. Exiting WWII the US was the monster. Sweden and Greece took it from us. Japan took it from them. Korea took it from Japan. China is probably in the process of taking it from Korea.

I've never fully understood why manufacturing jobs are labeled "good jobs" vs. "bad jobs" or "mcjobs" by so many. Not that I think there's anything wrong with manufacturing jobs - I just fail to see what makes them superior to, for example, service jobs.

I imagine one aspect of it is the political allure of unions. But there's something else at work. I suppose they potentially pay a bit more but the whole reason they keep getting "offshored" over the centuries is that they move to lower cost labor. That's not all of it though.

There's more. The people who claim such jobs are superior to other forms of work typically denigrate service sector work. The feeling of "making something" might explain some of that but I suspect there's an underlying disdain for having to be courteous to all and sundry as a matter of course in one's working day is distasteful to a lot of people. They'd rather just take their station on the assembly line.