North American Network Operators Group

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Re: Cisco moves even more to china.

  • From: Curtis Maurand
  • Date: Sat Sep 25 14:28:15 2004

Alexei Roudnev wrote:

This race exists, because American employees keeps many unnecessary
expenses, making local workforce
very expensive. In reality, even if people in India or Russia will have the
same life level as in USA, they will cost 2 - 3 times less.

There are many core reasons, driving work costs up and workforce offshore.
(1) Number 1 - LIABILITY and LAWERS. It became anecdote for the all world
around. Some girl in NY failed near the train - and company pay her $24M
dollars for _future lost_.

That's right, the train company should pay handsomely for not installing a $500.00 guardrail to prevent the accident in the first place and as a result a child is killed. Yes trains are dangerous, that's why the railroad should do everything in its power to protect the public where it will be close to moving trains. Protecting the public is much less expensive than the lawsuit. And you think this way until its your child that trips and falls an dinstead being caught by a fence, falls onto the track in front of an oncoming train.

My friends closed boat rental because of
liability costs are too high. Palo Alto Hospital pay to the mother many
millions because _she believe they did not do their best..._. Who pay it
all - Hospitals, transport companies, rentals? Not, it is paid by customers,
consumers (I do not want to revert liability to the doctor, but I am forced
to pay for others who can claim liability). lawyers are doing nothing, they
just pull money from others and drive costs high - and it drives workforce

Frivolous lawsuits drive up those costs. The lack of a system for weeding out those lawsuits is the problem. If a manufacturer is negligent and places the fuel tank in my vehicle in such a way that a $10.00 will protect it so that when my vehicle is rear ended by someone else (who is also negligent, BTW) and that fuel tank explodes setting my entire vehicle instantly ablaze and they knew about the problema and did nothing about it and I'm burned over 50% of my body and will probably cost me millions in reconstructive surgery and therapies both physical and mental, probably my job, not to mention the social costs of having large parts of my body covered with scars, that manufacturer should pay through the nose for every body that happens to. If manufacturers weren't so focused on the bottom line and worried more about the safety and quality of their products then this point would be moot. The actuaried make decisions like 1,000,000.00 vehicles X $10.00 = $10,000,000.00 the number of accidents of this type is low and the damage awards will amount to less than the $10 million, screw the shield we'll take the lawsuit. This kind of thing happens all the time.

If a doctor is negligent and reduces my child or my wife to persistent vegitative state, or say, amputates the wrong limb and is forced to amputate both, or kills them, then that doctor should pay handsomely. What's the price of my (your) wife's or my (your) child's life? As far as I'm concerned, its pretty damn high. How can you cap that damage award? Please, the answer isn't that simple. Massachusetts has a pretty good system for weeding out frivolous lawsuits and that has kept medical malpractice insurance costs significantly lower than other parts of the country. Oh, and BTW, the neglegent doctor shouldn't be allowed to pass those costs on to other patients. That damage award is supposed to hurt and come out of that doctor's hide. He'll think twice before he makes the same mistake. Its supposed to weed out bad doctors.

Health Insurance in the United States is the problem, not the solution. National healthcare is the solution. Billions of dollars are syphoned out of healthcare every year in the form of profits. Profiting from the misery of others is immoral. You can't defend it. Its just plain wrong. Other countries, even poor ones, have national healthcare and healtcare costs in those countries are substantially lower. Health Insurers only want to insure the healthy.

(2) Number 2 - landlords and real estate costs. Who pay for the homes
($500,000 here and $1,000,000 in Santa Barbara) - homeowners? Not,
employers -> consumers. I can live in Moscow paying $300 / month for the
apartment, I can not live here paying less than $1,000 for apartment. Who
pay it? Employers, at the end.

The market will get what it can. That's why the same home that cost's $1,000,000.00 in Santa Barbara costs $250,000.00 in Portland, Maine. For those of you who don't know, that's way up in northern Maine not near much of anything but farmland. Companies don't need to locate their companies in the most expensive places in the country. That's a choice. If I look in the right town, I can find apartments in the $300.00 range or even the $500.00 range, unlike, say, LaJolla, CA where they go for about 10 times that.

This is main driving engine. No one want to outsource (with exceptions, of
course - if you are from country A, you will likely outsource engineering to
country A) - it is much more convenient to have a local workforce vs.
remote. But if call center agent pays to the lawyers, pays for liabilities,
pays $2K/month for the rent here - and the same agent in India pay $200 ,
no liabilities (because smart people are responsible for themselves, because
_coffee is hot, and train is dangerous_), no huge lawyers costs, no huge
payments to licensed doctors

Yep coffee is hot, but it shouldn't be so hot that it removes the skin from your body if you're scald by it, which is what happened in the case you cite. See my earlier rant about the train.

(while many unlicensed can not get a job, and
many do not take this career because of huge liabilities) - employer have
not other chance than outsourcing. Smart employers keeps core team local and
outsource utilities, technical jobs, mass programming etc; other outsource
everything and then die, but no one have a chance to survive, paying this
liabilities, rentals and so on, when competitors are not doing it.

I am against free trade. I think it should be fair trade. Tax policies in the United States encourage companies to move jobs offshore. In the last 3 years, the US has lost more jobs offshore than in the previous 22. That's tax policy and nothing more. I, for one, have real problems with companies moving jobs (especially R&D and engineering) to a country that isn't exactly our friend. Companies can also waste the environment in the third world in ways they can't here. They should be penalized for that. For that matter the countries that let them do that should be penalized for that. If the playing field is level, then lets have free trade. Until it is, then the engagement is fair trade. Lessaiz Faire economics was tried about 100 years ago. It resulted in the Great Depression and children dying of tuberulosis in the factories. Why does anyone think it'll work today?

This is my last post on the subject on the list. I'm happy to continue off list.