How the world becomes wealthier (was Re: Offshoring: San Jose Mercury News article)

Subject: How the world becomes wealthier (was Re: Offshoring: San Jose Mercury News article)
From: "Helena Jerney" <hjerney -at- actional -dot- com>
To: "TECHWR-L" <techwr-l -at- lists -dot- raycomm -dot- com>
Date: Tue, 11 Nov 2003 12:20:00 -0800

Ok, so I usually lurk (actually, this is the first time I ever remember posting).

I have one question: regardless of whether you agree or disagree with offshoring, could you please tell me where you're located that someone can sit at home colleting unemployment for two years? It certainly doesn't happen to be here in California. I don't know what the situation is for others, but having done well as a tech writer during the boom, and having been able to sustain during the bust, I can still tell you that there have been plenty of good people during the bust in Silicon Valley who haven't been sitting around feeling sorry for themselves while cashing government checks, and who have still been without jobs for a couple of years. None of the people I know that have had to go through such experience were expecting anything from anyone. They tended to be experienced, well-rounded, well sought after professionals (pre-boom) in varieties of tech jobs, who just simply fell victim to the fact that at least around here, we went through a phase of months and months without more than literally a handfull of jobs that opened every so often.

Some of these people have children to support, houses (not extravagant boom-era mansions) to pay for, and food to put on the table. Not everyone in the tech industry cashed in on the boom, as there were just as many failed boom-era businesses are there were successful ones, it's just that no one likes to talk about that and no one remembers that the failure rate of the tech industry has always been high, regardless of the booms or boomlets that are present at times. And no one likes to talk about the fact that "cashing-in" was always a matter of luck . . . always a gamble.

While some people did plan better than others, being able to survive periods of unemployment without losing the basics, even then savings, investments, retirement funds, and equities have been used up. It must be very sad to watch everything you've built for many years dissapear in a matter or months or even a couple of years, especially when it is not an extravagant amount.

I really object to the lack of empathy in your postings. You cannot judge people or groups of people with such sweeping statements without showing a modicum of an idea of what their situations may have been. I really don't see many tech workers here waiting for a handout. Most people I know that are or have been in those circumstances have tried to do something constructive with their time, from job hunting relentlessly to changing careers, to moving to far away places. All of these people have had their lives and their families disrupted. And whether or not offshoring is the "right" or the "wrong" thing for the ecomnomy, which we call all discuss from the comfort of our own jobs, does not lessen the pain of the families that are displaced in the process.

I personally consider myself extremely lucky (so far) to still be employed, employable, and at a time in my life when disruptions like these, while stressful, do not cause huge concerns yet of issues such as lack of health insurance, for example, or the inability of changing careers due to age. A government check does not pay even half of a mortgage around here, not even the rent, let alone food, let alone health insurance. I cannot imagine anyone in the tech industry in Silicon Valley, sitting and collecting unemployment for any extended amount of time even if they could (I think the limit is 20 weeks, by the way), without doing anything about it but sitting and feeling sorry for themselves.

</end of soapbox>

-----Original Message-----
From: Richard G. Combs [mailto:richard -dot- combs -at- voyanttech -dot- com]
Sent: Tuesday, November 11, 2003 11:24 AM
Subject: How the world becomes wealthier (was Re: Offshoring: San Jose
Mercury News article)

Before I finished replying to his first salvo, k k calmed down and revised
his remarks. But, here's my response to the first message anyway. My general
points apply equally to the lower-key second edition. ;-) So, initially, k k

> Corporate newspeak at its finest. Offshoring makes us
> richer. So that makes it all better. It's OK for
> Americans to lose their houses and go two years and
> more without work because that somehow makes us
> richer. <snip>

Anyone who remains unemployed for *two years* is sitting around feeling
sorry for himself, cashing a government check, and waiting for someone to
hand him something. Sorry, no sympathy.

> I'll be hanged if I can figure how I'm richer
> because my neighbors who used to work at Dell are now
> working at Burger King. <snip>

At the Arby's I sometimes visit, there's a profile on the wall of a guy
named Amandji. He came to the US from Iran some time after the revolution.
IIRC, he was a professional (doctor or lawyer?) in Iran; in the US, he took
a counter job at Arby's just to be working. Today, he's a regional manager
in charge of a couple or three dozen locations. Judging by the cut of his
Italian suit, he's making as much money as a doctor or lawyer -- maybe more.
Anecdotal? Sure. But for every anecdote you can cite about a former tech
worker at Burger King, I can find an anecdote about someone who turned such
adversity into opportunity. Of course, they didn't sit on unemployment for
two years...

> But then I'm not an investor.
> I guess maybe you own a bunch of stock in companies
> that are offshoring a lot? <snip>

Just a retirement account with some mutual funds that are finally coming
back up. :-} And why *aren't* you an investor? If you were a tech writer in
the 90s, you certainly had plenty of discretionary income. ;-) Did you
prefer to spend it all and let someone else worry about your future?

> Your examples are spurious rot because those people
> were displaced by economic changes that CREATED

The current changes are also creating jobs, and future changes will as well.
You're fooled by the fact that some economic events are easily seen and
others are unseen. When Acme Corp. announces layoffs due to outsourcing, you
see the 1000 jobs that are "lost" -- it happens all at once and makes

But you forget that Acme, due to the savings, is producing the same output
for $20 million less (its productivity has increased). Therefore, Acme now
has $20 million to use in other ways. That freed-up money is going to be
used for *something* -- new ventures, research, expansion,... (Even if it's
all distributed to shareholders, they'll consume or invest it -- very few
people put money under their mattress these days.)

That new, different spending and investment will create new, different jobs.
But, you don't notice because they're created a few at a time, spread here
and there, and thus there are no headlines. (Well, if you read the business
news, you may have noticed there was a net gain of 100,000-odd jobs last
month. But it doesn't have the same impact as the headline "More Acme

And, no, the replacement jobs won't be in the fast food industry. The $20
million will create jobs that are *more* productive, higher-valued, than the
ones being replaced -- that's how companies and individuals make themselves
wealthier, by finding better uses for their capital.

I think it was either Schumpeter or Hayek who called this process "creative
destruction." Any effort to stop it and freeze things as they are makes us
all poorer in the long run.


Richard G. Combs
Senior Technical Writer
Voyant Technologies, Inc.
richardDOTcombs AT voyanttechDOTcom
rgcombs AT freeDASHmarketDOTnet



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