Borders in USA to close

[Fbone]

And that wouldn't be a bad idea, except that we're across the street from every B&N in existence.

It's certainly true in my case. The two stores are across the street from each other.

[ScalyFreak]

Originally Posted by NVash

Yes, I misunderstood you. My apologies.

None needed. Written communication lends itself to misunderstandings all the time. No harm, no foul.

[Hellmark]

Originally Posted by ScalyFreak

We're saying the same thing. Companies outsource if they believe they can get the same skillset or a better one, for less money. It makes no sense to them to pay more money to someone who has less qualifications. Right?

Problem is, often they get employees with a far lower skillset, even if the portion of the skillset they are off on is speaking the same language as the customer fluently. I know you've heard the horror stories of tech support and customer service lines being outsourced.

Some of the companies I deal with from work have outsourced their engineering, and even sales to other countries. When you're dealing with stuff of a highly technical nature with other techies, speaking the same language is pretty much a requirement. Small little mistakes made due to language barrier difficulties can have big impact. For instance not too long ago, we had to return an entire order of parts, because of a communication snafu between the R&D and manufacturing facility soldered in all the LEDs in backwards (which LEDs are polar, so end result is no light). It took 3 months of back and forth to get them to understand what happened, and to get it resolved. That is just a minor issue, too. Meanwhile, we were out the cost of the parts, and had a ton of phones we couldn't sell because we didn't have anything to use in place of the faulty parts.

I am not saying this is always the case, as there are other companies that have a much better track record, but the extra effort must be made still.

[ScalyFreak]

Originally Posted by Hellmark

Problem is, often they get employees with a far lower skillset, even if the portion of the skillset they are off on is speaking the same language as the customer fluently. I know you've heard the horror stories of tech support and customer service lines being outsourced.

I work in tech support for a large electronics company. They outsourced a portion of their customer service overseas a few years back... then after one year took a thorough poll of customer opinions of the outsourced experience. After reading the poll results my department doubled out headcount, the outsourced people are no more, and customer satisfaction went back up to acceptable levels.

Some companies do learn from their mistakes.

[Hellmark]

Originally Posted by ScalyFreak

I work in tech support for a large electronics company. They outsourced a portion of their customer service overseas a few years back... then after one year took a thorough poll of customer opinions of the outsourced experience. After reading the poll results my department doubled out headcount, the outsourced people are no more, and customer satisfaction went back up to acceptable levels.

Some companies do learn from their mistakes.

Some do, some don't. I know with the way the economy is, a lot of companies are cutting every corner down to increase profits.

[jersysman]

Originally Posted by ScalyFreak

I work in tech support for a large electronics company. They outsourced a portion of their customer service overseas a few years back... then after one year took a thorough poll of customer opinions of the outsourced experience. After reading the poll results my department doubled out headcount, the outsourced people are no more, and customer satisfaction went back up to acceptable levels.

Some companies do learn from their mistakes.

One can only hope!

Most of the time the only thing that matters to them is the bottom line! Customer satisfaction be damned!!

[luqmaninbmore]

Originally Posted by Hellmark

Some do, some don't. I know with the way the economy is, a lot of companies are cutting every corner down to increase profits.

And, to be exact, they are often using the economy as an excuse to cut back on labor expenses and increase already robust profit margins.

[Phogg]

Originally Posted by luqmaninbmore

And, to be exact, they are often using the economy as an excuse to cut back on labor expenses and increase already robust profit margins.

A lot of businesses right now are failing and closing just as Borders has.
Those robust profits have evaporated for many and they had insufficient savings to hang on until the climate to make a profit returns.

Cutting labor is a sign the company didn't save a large enough reserve, and if the economy does not improve it is just dying slower.

[Kali Yuga]

At the risk of deepening the tangets....

Originally Posted by luqmaninbmore

There is nothing xenophobic about being critical of the race to the bottom generated by global capitalism.

So you're just espousing anti-globalist protectionism then? Got it.

"Reducing costs" is a long-standing tactic of many business endeavors. Efforts to protect "jobs at home" are often counter-productive, because they diminish the liquidity of the job market and make it more expensive to hire employees.

Foreign workers are paid less, but they also live in areas with significantly lower costs of living than the US. The actual amount of exploitation isn't that different.

Re: The idea that outsourcing jobs reduces the total number of jobs, so do automation and investment in technology. Should we outlaw any and all means to increase worker productivity, in the name of preserving jobs?


Re: "Siphoning off money" via globalization, this is incorrect. Executive pay is a completely separate problem from outsourcing jobs. Many of the companies that have the highest CEO pay do not rely on outsourcing.

And in many cases, outsourcing leads not just to lower profits but also lowered prices for consumers. This raises the standard of living for consumers, and allows them to spend more where they like -- including on local products and services. If the prices weren't lower, consumers would have no particular incentive to buy the foreign goods.


China has gone from an agricultural nation to a manufacturing powerhouse with a huge export business and massive reserves of capital in a couple of generations -- all thanks to Western companies outsourcing manufacturing. How, exactly, is this process "bad" for China...?

And of course, let's not forget that what's good for the goose is good for the gander. I agree that we could end subsidies for companies moving abroad, but that isn't going to make a difference; as long as labor is cheaper, the jobs are going to leave. Any company that refrains from chasing the best labor at the best price is going to be out of business in short order -- in which case you're going to lose a LOT more jobs, most of which are high-paying.

Oh, and the US exported $1.8 trillion in goods and services in 2010. If it's best for the US to refrain from purchasing foreign-made goods, then isn't it best for foreigners to refrain from purchasing US-made goods? (Or, to put it another way, restrictions on free trade tend to provoke retaliatory responses.)


By the way, I don't suppose you know how state governments try to promote job growth? In most cases, it's by stealing jobs from other US states, by offering tax breaks or other incentives. (Other than the state directly hiring people, there is almost no other way for a government to generate jobs.) So is it acceptable for a company to relocate from California to Texas to improve costs, but unacceptable for that company to relocate from Mexico to Texas on the same basis?


None of this is to say that globalization is unproblematic or perfect; e.g. some foreign nations will have weaker labor and environmental protection laws.

But on a fundamental level, protectionism doesn't work.

[RDaneel54]

[porkupan]

Originally Posted by Kali Yuga

"Reducing costs" is a long-standing tactic of many business endeavors. Efforts to protect "jobs at home" are often counter-productive, because they diminish the liquidity of the job market and make it more expensive to hire employees.

So, if I read you correctly, outsourcing is akin Progress and advances in technology. Opposing it is like opposing development of machine tools and mechanized agriculture.

I disagree. Opposing outsourcing IMO is a labor rights issue. It is protecting real people being robbed of their livelihood by corporate greed. And above that, it is protecting the standard of living in one's own society, which is being hurt (and not improved!) by lowering costs of manufacturing, lowering wages and higher unemployment.

Machine tools and developments in agriculture did in fact free up a lot of excess labor. However, those developments were mostly occurring at the times when overall labor demand was on the rise. Today taking well paying jobs and shipping them overseas may generate competitive advantages (and extra executive bonuses), but when those outsourced jobs are not replaced by similar well paying domestic jobs (or in fact any jobs), we get a crisis in the economy, lower tax base and higher "entitlement" expenditures. The government debt goes up, and standard of living falls, the wages are depressed, the income inequality is on the rise.

Now, internet retailers killing B&M retail is a similar story. Yes, Amazon employs a lot of low skilled labor, but with much higher efficiency that Borders or B&N used to. In fact, it may be that Borders employees were on average more skilled and knowledgeable than Amazon's box packers. There were also many more of them employed around the country, and there were secondary jobs created by Borders retail business as well. Those are real people who are now losing their income. The states are losing sales tax income as well - Amazon customers in most cases do not pay sales taxes. The local municipalities are losing real estate tax income. Everyone loses except Amazon executives and investors.

Now, Amazon arguably is Progress. It is not yet shipping a lot of jobs overseas (not sure about their customer service though). But I believe it should be made to compete on equal footing, and pay the local sales taxes.

[kjk]

Just got a nice letter from Borders, thanking me for being a customer. Gracious in defeat, for sure.

[karunaji]

Originally Posted by Kali Yuga

But on a fundamental level, protectionism doesn't work.

If you believe in the perfect and equal world, then yes, protectionism is a bad idea. But the world is not perfect and there are times when without protectionism there is no chance for a country to develop competitive industries.

Every first world country has achieved the prosperity by some kind of protectionism. And they still practice it in certain industries, for example, agricultural subsidies in the US and EU while developing countries are specifically forbidden to implement such subsidies by IMF and other lenders. It benefits the EU and US but poor African countries are unable to compete in the market with their agricultural products (which are often their only exports) and remain in poverty.

Another example applies to automotive industry which are nurtured and subsidized in almost every country. Only when the industry has become strong, it can participate in the free market and make profit but before that it will not survive.

[fbrII]

I disagree. Opposing outsourcing IMO is a labor rights issue. It is protecting real people being robbed of their livelihood by corporate greed. And above that, it is protecting the standard of living in one's own society, which is being hurt (and not improved!) by lowering costs of manufacturing, lowering wages and higher unemployment.

+1 and well said

[Phogg]

Labor is not the biggest cost savings when outsourcing manufacturing overseas from the United States. I suspect it is not from Europe either.