Apple and other mega-corporations and the U.S. economy

[Frisco]

...this is all immaterial because your friend isn't outsourcing the work to foreign lands, eliminating jobs, reducing tax revenue those jobs would have generated, reducing demand for services that those jobs would have generated, reducing tax revenue from untaxed foreign investment, etc.

Which ties in with Apple's outsourcing, and by extension, the notion that they're doing that for greater profit at the expense of American worker's jobs. And that all adds up to what, as far as "Should Apple donate some of its money to help the U.S. economy?"

 

[lordofthereef]

If the prices on everything that was outsourced has dropped like some claim, then it should not be hard to cite a specific product where the price before outsourcing was higher than the prices after outsourcing. So far, nobody has been able to do it.

Here is the thing. Virtually all products we buy here int eh US utilized outsourced labor in their manufacturing, tech support, etc. to some degree, and have been for some time. It is hard to find a company that a few years ago didn't outsource and now does. We can't really compare companies now to what they were decades ago (not implying this is what you suggest) simply because of inflation. I suppose we could account somewhat for inflation, but probably not very well.

 

[lordofthereef]

Which ties in with Apple's outsourcing, and by extension, the notion that they're doing that for greater profit at the expense of American worker's jobs. And that all adds up to what, as far as "Should Apple donate some of its money to help the U.S. economy?"

I say the answer is no. They used legal loopholes. IMO one shouldn't be punished for doing something legally. Policy and law is what needs to change to stop these activities from happening.

Who knows. Maybe that equates to people not buying an ipod every 6-12 months. I doubt it though. Their profit margins are already astronomical on their products. But you never know. They get people to happily pay for these products (I am one of them in some cases - love their macbook air) as is, maybe bumping the price up wouldn't hurt their sales at all. That way company heads can still make what they are making and "everyone is happy".

 

[A.Nonymous]

But they haven't. Not ONE has the price decreased after it was putsourced. You can say, HYPOTHETICALLY, that the price would be higher if it wasn't outsourced. I don't take hypotheticals. I want an actual product where the price was higher before it was outsourced, and that price went down after it was outsourced. You have failed to do that.

You're ignoring a basic rule about business. Companies NEVER cut prices unless it means more sales. It doesn't matter whether it's outsourcing or technology or better manufacturing means or what it is. Companies will NEVER cut prices on goods just because manufacturing costs go down. They cut prices if it means more sales. If cutting prices is not going to mean more sales they won't cut it no matter what.

 

[nlsme]

Here is the thing. Virtually all products we buy here int eh US utilized outsourced labor in their manufacturing, tech support, etc. to some degree, and have been for some time. It is hard to find a company that a few years ago didn't outsource and now does. We can't really compare companies now to what they were decades ago (not implying this is what you suggest) simply because of inflation. I suppose we could account somewhat for inflation, but probably not very well.

Let's look at computers. In 1980, a "low-end" computer would cost $300-$500, it was called a calculater. A high end computer would cost $3,000-$10,000. Today, you may get more computer from your money, but a low end computer today cost $300-$500, while a high-end computer will cost $3,000-$10,000. The reason you get more computer for your money is not because of outsourcing. Computers did not get a lower price because of outsourcing.

 

[nlsme]

You're ignoring a basic rule about business. Companies NEVER cut prices unless it means more sales. It doesn't matter whether it's outsourcing or technology or better manufacturing means or what it is. Companies will NEVER cut prices on goods just because manufacturing costs go down. They cut prices if it means more sales. If cutting prices is not going to mean more sales they won't cut it no matter what.

How am I forgetting that? It is what I am saying. Outsourcing the manufacturing does not mean the products are cheaper to the end user. It only means higher profits, wich in turn, means higher executive pay.

 

[noah way]

I say the answer is no. They used legal loopholes. IMO one shouldn't be punished for doing something legally. Policy and law is what needs to change to stop these activities from happening.

Who knows. Maybe that equates to people not buying an ipod every 6-12 months. I doubt it though. Their profit margins are already astronomical on their products. But you never know. They get people to happily pay for these products (I am one of them in some cases - love their macbook air) as is, maybe bumping the price up wouldn't hurt their sales at all. That way company heads can still make what they are making and "everyone is happy".

Except of course for those suffering from the crumbling American economy, the people who used to work for Apple who lost their jobs to China, and the people in Shenzhen (who make Apple products for $.51 per hour) whose jobs are being outsourced to Chengdu where labor is cheaper.

 

[A.Nonymous]

I'll also add, why does it matter what execs get paid? If the company is successful and raking in money, I couldn't care less what they pay their execs. If Apple pays Jobs $1 a year or $1 billion a year I couldn't care less if their profits are the same.

 

[lordofthereef]

Let's look at computers. In 1980, a "low-end" computer would cost $300-$500, it was called a calculater. A high end computer would cost $3,000-$10,000. Today, you may get more computer from your money, but a low end computer today cost $300-$500, while a high-end computer will cost $3,000-$10,000. The reason you get more computer for your money is not because of outsourcing. Computers did not get a lower price because of outsourcing.

I completely agree with everything you have to say here. My only issue is I don't necessarily understand why you said all this.

 

[lordofthereef]

I'll also add, why does it matter what execs get paid? If the company is successful and raking in money, I couldn't care less what they pay their execs. If Apple pays Jobs $1 a year or $1 billion a year I couldn't care less if their profits are the same.

We are making this comparison because some are saying that outsourcing is needed to provide better value. The opposing side is saying that outsourcing is not needed, but simply abused to fill the execs coffers.

 

[lordofthereef]

Except of course for those suffering from the crumbling American economy, the people who used to work for Apple who lost their jobs to China, and the people in Shenzhen (who make Apple products for $.51 per hour) whose jobs are being outsourced to Chengdu where labor is cheaper.

Yes. I am on your side here. I think laws should be changed, but there should be no retroactive punishments for using current laws to the company's benefits. In that part you quoted that was my fictional scenario of Apple without outsourcing.

 

[A.Nonymous]

Except of course for those suffering from the crumbling American economy, the people who used to work for Apple who lost their jobs to China, and the people in Shenzhen (who make Apple products for $.51 per hour) whose jobs are being outsourced to Chengdu where labor is cheaper.

But if you switched that around and brought jobs back to the US the result would not be prices being the same. The result would be higher prices and a higher cost of living for everyone.

 

[lordofthereef]

But if you switched that around and brought jobs back to the US the result would not be prices being the same. The result would be higher prices and a higher cost of living for everyone.

Perhaps. Or companies would realize their exorbitant profit margins are just that, exorbitant. They can operate just fine not filling their CEOs coffers and we would get along just fine. As I mentioned, this country didn't have rampant outsourcing as part of nearly every company's business model until fairly recently. Maybe we can also move back to higher quality product rather than the cheap outsourced BS a lot of companies currently peddle.

 

[A.Nonymous]

Perhaps. Or companies would realize their exorbitant profit margins are just that, exorbitant. They can operate just fine not filling their CEOs coffers and we would get along just fine. As I mentioned, this country didn't have rampant outsourcing as part of nearly every company's business model until fairly recently. Maybe we can also move back to higher quality product rather than the cheap outsourced BS a lot of companies currently peddle.

That's not realistic though. How are you going to tell your CEO that you're cutting his pay despite the fact that his performance has not changed? And that doesn't address the question of whether CEO pay is even a problem in the first place. If the company is raking in money, who cares how much they pay their CEO?

 

[ElasticNinja]

One thing is say, is that you can't be too protectionate.
I think that US (or EU) companies should have to apply strong labour protection policies in their overseas operations.
I would also like serious restrictions on moving profits overseas.

I don't know how this can be done however

 

[ElasticNinja]

How am I forgetting that? It is what I am saying. Outsourcing the manufacturing does not mean the products are cheaper to the end user. It only means higher profits, wich in turn, means higher executive pay.

In all fairness now, you can not say *only*. It may happen in many cases but not all.

 

[Bob Maxey]

I would also like serious restrictions on moving profits overseas.

Why? And do you know what restrictions are currently in place?

 

[noah way]

But if you switched that around and brought jobs back to the US the result would not be prices being the same. The result would be higher prices and a higher cost of living for everyone.

Basic cost of living i.e. food, energy, housing, insurance etc. would not increase in price by bringing jobs back to the US.

The cost of many items would no doubt increase, but I would gladly accept that in return for a sound economy, high employment and the benefits that these will bring to the entire nation. I can think of nothing more patriotic than employing one's fellow citizens and contributing directly to the well being of our economy, and little that is more treasonous than not doing so.

 

[lordofthereef]

That's not realistic though. How are you going to tell your CEO that you're cutting his pay despite the fact that his performance has not changed? And that doesn't address the question of whether CEO pay is even a problem in the first place. If the company is raking in money, who cares how much they pay their CEO?

There needs to be change to get American money spent in America and to have American jobs. Pass the proper laws and bills and it will become realistic enough if the company's wants to continue to operate. If their costs rise (which they obviously will if outsourcing is lessened), something has to change. That either means top paid execs get a pay cut (and get to deal with it) or consumer prices raise. A raise in prices will work with some products and services, but not with most.

As an example, plenty of Americans get pay cuts (the ultimate of which is job loss) despite the fact that their performance hasn't changed. CEO's (or insert any other acronym for I am the big cheese at xyz corp) should not be immune to pay cuts but often are, again, because it is easier to outsource and cut "the little guy".

 

[lordofthereef]

Why? And do you know what restrictions are currently in place?

I'll be honest, I don't know all restrictions in place (as in I count spout out laws), but I personally feel that is irrelevant. The problem is it is cheaper to higher non-American labor. I am not ok with that.

 

[Bob Maxey]

Basic cost of living i.e. food, energy, housing, insurance etc. would not increase in price by bringing jobs back to the US.

The cost of many items would no doubt increase, but I would gladly accept that in return for a sound economy, high employment and the benefits that these will bring to the entire nation. I can think of nothing more patriotic than employing one's fellow citizens and contributing directly to the well being of our economy, and little that is more treasonous than not doing so.

You really think that?

 

[lordofthereef]

You really think that?

I do, to some extent, I think. I am sure there are things as a poor vet student that I couldn't have that I currently do. But, it's give and take. Keeping more money in the US undoubtedly will strengthen the economy.

There is a fine line though. Naturally there are companies that started out outside of the US and have brought their product here. What is to be done about these? Do we "force" them to set up shop on American soil? Do we not allow them to import even raw materials (obviously this wouldn't work in many situations)? I don't know that I have the answer or even suggestions for any of those questions.

 

[copestag]

I'll be honest, I don't know all restrictions in place (as in I count spout out laws), but I personally feel that is irrelevant. The problem is it is cheaper to higher non-American labor. I am not ok with that.

and instead of making american labor cheaper your proposal is to make foreign labor more expensive........ makes sense

 

[lordofthereef]

and instead of making american labor cheaper your proposal is to make foreign labor more expensive........ makes sense

Well, there is a standard of living here above and beyond what most countries have where labor is outsourced. Making American labor cheaper isn't going to work, IMO. If there is evidence that it would, I am happy to concede I am wrong.

 

[copestag]

so because our labor force doesnt want to lower their standard of living (which is as you said much higher than the rest of the world)...... we should force the 'rich' to lower their standard of living

sounds a lot like class envy to me

other than "american pride" or some self indulgent illusion of 'fairness'....... is there any logical reason that a company whose sole purpose is to make as much profit as possible to not seek out the most profitable labor force (assuming said labor force can do the job equally)