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We've heard a lot of desperate talk from Mitt Romney about how outsourcing is different than offshoring and not as harmful to average American workers as everyone knows it is. Of course it's nonsense, but let's take a look at Bain to better understand how Romney is misrepresenting his record.

Here's what the Romney camp is trying to say about the issue (so far it's been a disaster for them):

"There’s a very simple difference between outsourcing and offshoring,” Fehrnstrom said on CBS' "Face the Nation." "[Outsourcing] is done by companies every day. They take functions and they allow vendors to do it rather than handling it in-house. Offshoring is the shipment of American jobs overseas."
I'll get back to this later, but only 3 of the 8 specialists at Bain dedicated to finding these "vendors" for clients are located here in America. The rest are overseas.

Of course Romney's camp is trying to confuse people about outsourcing by misleading them regarding how ambiguous "functions" become outsourced to ambiguous "vendors." It's really not so ambiguous at Bain. These functions are "in-house" products and/or services that are outsourced to other companies who can do it cheaper. Often, that's an overseas company, because their labor and material costs are lower. At these companies, much of the outsourcing IS offshoring, and especially if Bain did their consulting. The outsourcing Romney is being criticized for is Bain's practice of recommending outsourcing to foreign vendors. How do I know this? Let's look at Bain's website for a hint as to how they view the concept of "outsourcing."

Here's a graphic from the Bain website illustrating their outsourcing recommendations for a company called TechCo. The title of this case study filed under their "Client results" section is:

Outsourcing helps tech company focus on its core

See the 4 bubbles that are going to stay in-house? That's their core. See the 6 bubbles that are going to be outsourced? That's everything else. So that's the scale of outsourcing we're talking about. That's the first important thing to understand. Bain is recommending enormous levels of outsourcing.

Now here's another graphic from the Bain website. You see the arrow from Insourced to Outsourced? You see the two headings at the far right that correspond to "Outsourced?" If Americans want insourcing (which is what Obama is saying we need to be doing), then outsourcing and offshoring are at the opposite end of that possible spectrum:

So in the spectrum of possibilities, outsourcing and offshoring are neighbors at the far end of the spectrum, but they still make up the vast majority of Bain's focus.

But how does Bain arrive at these decisions? How does Bain decide whether a company should outsource a department or work to make it more efficient? Let's look at another case study, this time of a manufacturer called HomeCorp.

The answer it turns out, is fundamentally tied to its global competitiveness. See the graphic below. There are only two questions that are asked by Bain before a department is outsourced. Is it needed? Is it competitive at a world-class level? If it's not, it's outsourced, immediately. Where? To a place that is competitive at a global level, ie most likely overseas. We're not just talking about offshoring, we're talking about how Bain views outsourcing, and it is fundamentally about whether it is cost competitive at a global scale. Outsourcing is implicitly tied to the concept of offshoring at Bain. That's not the way it has to be, but that's the way Romney and Bain truly view it as they make clear on their website. It's not enough for the outsourcing to be competitive at an American scale, it has to be cost competitive with China and India. Where do we think that outsourcing is going? Yeah, uh huh.

To illustrate this point, only 3 of the 8 specialists dedicated to procurement (VENDORS) at Bain are located here in America. The others are in places like Mumbai, Toronto, Munich, and Shanghai.

Bain is so fundamentalist and focused on outsourcing in the form of offshoring in fact, that questioning whether the department can be made more efficient by merging it with another department here at home doesn't even come into the picture until the very end of the decision tree, and then only if the department must be physically located at corporate  headquarters and then only if it is truly "unique." Keeping departments here at home is VERY low on the list in terms of priorities at Bain, something to be avoided at all costs and only done if all other options have been exhausted.

And finally, here's a graphic from the same case study, the only graphic under the heading "results." It illustrates what outsourcing really means to Bain and where their focus really lies:

Under the heading "Employees," we see the following labels:

31% eliminated. Further downsizing with divisions. Eliminate if feasible. Remaining corporate 31%.

Outsourcing is terrible. Offshoring is terrible. There are some companies out there where a meaningful distinction between the two words might  matter to some corporate honchos. The distinction never matters to Americans who will lose their jobs, but at the same time it is fundamentally important to point out that Romney and Bain's concept of outsourcing is implicitly linked to global competitiveness and therefore is highly connected to if not synonymous with the term "offshoring."

Romney and Bain shouldn't be allowed to pretend their version of outsourcing is anything vastly different from offshoring. Semantically, the definitions of the terms can be pointed out, but in terms of Bain's record, it's disingenuous of Romney to misrepresent their own policies. They make it clear to their clients after all, on their own website.

4:52 PM PT: It's clear Romney is trapped in his own corrupt business practices. But don't forget, while offshoring is the type of outsourcing Bain focuses on, even domestic outsourcing is extremely bad for American workers, as explained in the link at the beginning of this diary:

"Outsourcing isn't a great thing, either," said Candice Johnson, a CWA spokeswoman. "It often means jobs get sent somewhere else in the U.S., where the workers get less pay and no benefits, and maybe they're even classified as an independent contractor so they don't get labor protections. It's another industry trend that might help companies and CEO's, but it doesn't help workers."

Originally posted to addikell on Tue Jun 26, 2012 at 03:35 PM PDT.

Also republished by ClassWarfare Newsletter: WallStreet VS Working Class Global Occupy movement, In Support of Labor and Unions, and Community Spotlight.

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Comment Preferences

  •  I worked for a Fortune 500 company... (15+ / 0-)

    ... whose last two initials are the acronym for Bowel Movement.  The term strategic outsourcing rang a bell in my head because it represented a different kind of loss of US job.  I was a victim of Strategic Outsourcing, and if I remember correctly there are government regulation and tax implications for that kind of outsourcing.  It wasn't just a matter of shipping my job to India for a direct cost savings, there were tax savings - and maybe some government credits - involved as well (as it was explained to me).

    While I was given a certain amount of time to try to find another position in the company - the die had been cast once that SO tag had been placed on my employment record.  No one would touch me because the company had too much to gain from sending my job to India.   It was also explained to me that there was a tremendous amount of paperwork - the hint was it was US regulatory paperwork -  to be filed if someone else in the company tried to keep me.

    I haven't been here long enough to be considered a Kossack, does that mean that I'm just a sack?

    by Hey338Too on Tue Jun 26, 2012 at 04:20:05 PM PDT

    •  Interesting... (12+ / 0-)

      It sounds like corporations like Bain have written the laws and handle their paperwork in such a way as to maximize offshoring, which isn't at all surprising.

      These aren't really "American" companies, they're global companies.

      They don't really have any sense of patriotism. I'm sure that idea would seem ludicrous and quaint to them.

      •  Companies like this want employees (12+ / 0-)

        but not in the traditional sense.  They want "virtual" employees.

        People who do the work for the lowest wages and no benefits.  In other words, somebody who works for somebody else.

        Preferably overseas, because it's even cheaper.

        I've had this experience, in my job.  After I retired, my job was outsourced offshore to India.

        The company I used to work for? They still claim the person in India as an "employee", even though that employee works for a different company, on a different continent.

        That way the shell company that used to be my employer can claim that "employment" by them has risen.  When, in fact, the opposite is true.

        Ain't capitalism grand?

        •  Yes, very important (6+ / 0-)
          Recommended by:
          Hey338Too, phonegery, ybruti, rb608, gulfgal98, caul

          I udpated the diary to highlight that while Bain focuses on offshoring in terms of their outsourcing, even domestic outsourcing is incredibly bad for American workers.

          Romney is trapped. He's trying to defend what he claims is a lesser evil, but the so-called lesser evil isn't reflective of Bain's policy to offshore whenever possible, and it's still at the root of the evil that's killing American workers. Some might even argue it isn't the "lesser" of the two evils.

          Giving our American jobs to an illegal immigrant or to a temp worker doesn't do people any more good than if the job had been sent to China. In fact, it undermines the labor market here just as much if not more so.

          •  Precisely... (7+ / 0-)

            ... some of the jobs at the company I mentioned were outsourced to former employees who became contractors.  These are hourly workers.  The rules of the road are that you work as many hours as it takes to get the job done, except they refuse to pay any overtime - even if it is required in order to complete the work.  That is only illegal if you have the balls to challenge them on it, any challenge and your job is gone.

            The company has now been scaling back hours that their contractors can work (not scaling back the work itself - only the hours).  I think the max number of hours now is 36, it may be lower - if you work a minute more you are donating your time to the stockholders.

            I haven't been here long enough to be considered a Kossack, does that mean that I'm just a sack?

            by Hey338Too on Tue Jun 26, 2012 at 05:09:41 PM PDT

            [ Parent ]

        •  Yeah. (10+ / 0-)

          I worked customer service for a major telecommunications company - except I wasn't working for them, I was working for a consulting firm that operated customer service for Company X on a "project" basis.  The "project" was at least seven years old by the time I got there, but there you are.

          We had it drummed into us never to quite identify ourselves as Company X employees to callers.  There was an actual mailing address for the actual Company X corporate customer service department, but none of us proles on the call floor had it - and one supervisor got reprimanded for providing that address to a customer without authorization.

          Need I add, we all had junk insurance, no paid time off, "mandatory overtime" of up to ten additional hours per week above scheduled shifts, and no unions?

        •  Aint capitalism grand? (4+ / 0-)

          Capitalism, if it is regulated, can be grand.  It's the capitalists that are rotten, heartless, bastards.  

      •  One of the three smartest people I know (1+ / 0-)
        Recommended by:

        devoted her business life to garnering tax advantages for big corps.  She made a lot of money herself, and she used to tell me that when they told her they wanted to do something it meant that she was to find a way to accomplish it.  

        "I said, 'Wait a minute, Chester, You know I'm a peaceful man.'" J. R. Robertson.

        by NearlyNormal on Wed Jun 27, 2012 at 10:46:45 AM PDT

        [ Parent ]

    •  John Kerry ran against Tax breaks to corporations (6+ / 0-)

      for outsourcing, but he got swift boated.

      Republicans are like alligators. All mouth and no ears.

      by Ohiodem1 on Tue Jun 26, 2012 at 08:10:31 PM PDT

      [ Parent ]

  •  Consulting is focused on optimization of (3+ / 0-)
    Recommended by:
    bethcf4p, Mister T, caul

    how companies function. Outsourcing is a significant part of it. Not always offshore outsourcing but afaik most outsourcing ends up offshore. Consulting companies don't try on purpose to fire people, they want to save as much money as possible (and justify their fees as well). If it involves firing people, oh well. It's not their problem. This is not specific to Bain, other big (McKinsey, BCG) and small consulting companies do the same thing.

    •  Why would it be unique to Bain? (6+ / 0-)

      And why would that matter?

      Consulting companies are asked by corporations (ie their rich shareholders) to make them more profit, so they fire as many as they can and offshore as much as they can to do that - because given productivity these days, employees' standard of living is where you find money for the taking.

      Nobody said Bain was unique. But that's not somehow a good thing, especially in a presidential candidate. It's just indicative of how focused corporations are on targeting the standard of living for the 99% to make more profit that consulting firms operate this way.

      Being a shithead in an industry based on being a shithead doesn't somehow make it any better. I wouldn't vote for a mercenary for president either. Some industries probably just aren't suited.

    •  Yes (3+ / 0-)
      Recommended by:
      FG, Sparhawk, llywrch

      Optimizing a company's operations doesn't always mean screwing someone over. And when you consider how many workers are in fact shareholders via the market/pensions then optimizing value for the shareholders can be beneficial for average workers. The discourse of un or misinformed business practices here often rather frustrating.

      •  Oh Great - The Average Worker's 401k Increases In (4+ / 0-)
        Recommended by:
        blueoldlady, addikell, Fairlithe, kurt

        value, but their job could disappear, due to the company "optimizing operations." And if they do lose their job, and can't find another job anytime soon, then they will need to borrow from the 401k to stay alive, once their unemployment runs out. Which means that increase in their 401k (due to the company "optimizing operations) was worth diddly squat to the average worker and their retirement security.

        •  It isn't a zero sum game (2+ / 0-)
          Recommended by:
          itsjim, Sparhawk

          you know.  All situations are different and there a zillion variables to contend with. You simply can't (with any degree of logic) decry "outsourcing" as bad ... or good. If 20 people were displaced but 2000 gained value then that is unfortunate for the 20 but great for the 2000. What is missing from this discussion (me as well)  is solid numbers. How many bain jobs were outsourced and lost? how many new jobs were created by the outsourcing? how much value did companies get? how much value was added to workers' investments and pensions? How many displaced workers should have been let go because of inefficienies? How many workers should have stayed while the management was restructured?

          But that doesn't make a good 30 second ad ... or a blog argument.

    •  Ostensibly focused on optimization (2+ / 0-)
      Recommended by:
      llywrch, kurt

      My guess is that many consultants and lateral hires understand one key fact - the quickest way to achieve short term financial improvement is to fire a bunch of people.   Process improvements are hard.  Coming up with effective new marketing or sales techniques is hard.  Firing people is easy, particularly when you can outsource your HR function and not put those long-term employees out on the street yourself.   And the cost savings of firing people immediately drops to the bottom line and the consultant or the newly-hired VP takes the money and runs.

      The long-term costs and benefits are much harder to measure and are probably beyond the term of the consulting contract (or, in the case of Bain, the holding period of their "investment" in the hapless target).

      The problem is that when you can manufacture widgets in Mexico for 10 cents, and your U.S. production costs are $1, you probably didn't have to pay a consultant $100,000 to figure that out for you, and in the short term, with all your competitors moving their operations to Mexico, there's not much one employer can do unless you have other ways to differentiate your product and charge a premium for your U.S.-manufactured goods.

      The obvious solution here is to figure out a regulatory approach that can take into account - not perfectly but to some degree - the interests of both shareholders and workers.  

      Bain is relevant because Romney devoted his career, such as it was, to the interests of a single minuscule group of people, not to any broader group of stakeholders.  All of his friends and most of his donors are 1%'ers  and it's ludicrous to imagine he would have any inkling (or motivation) as to how to design policies that benefit more than the 40 wealthiest people in the United States.  

      [Digression:  My experience with consultants was that most of them were simply selling the bright idea du jour (same recipe for all organizations) for a given industry at a given time and had no real useful advice to offer.  My employer routinely brought in "consultants" who would be pushing the exact opposite of the CW five years earlier.]

      The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges. -Anatole France

      by blueoldlady on Wed Jun 27, 2012 at 10:44:18 AM PDT

      [ Parent ]

      •  Or, If You Can Import Somebody From Mexico (1+ / 0-)
        Recommended by:

        The problem is that when you can manufacture widgets in Mexico for 10 cents, and your U.S. production costs are $1

        To the U.S. to do it for the 10 cents.

        Importing cheaper labor to a job is no different than exporting a job to cheaper labor.

        I won't be coming home tonight, my generation will put it right - Genesis 9:3

        by superscalar on Wed Jun 27, 2012 at 10:58:23 AM PDT

        [ Parent ]

  •  Defining outsourcing and offshoring (8+ / 0-)

    You know your team is on the defensive when you and your surrogates are debating the definition and semantics of how you profited from destroying Americans jobs.

  •  Here's a slightly different take on things (1+ / 0-)
    Recommended by:

    I don't think outsourcing is bad per se.

    If I start a small flower shop, I'm not going to hire an employee to make sure my computer works, I'm going to hire a contract company that makes sure my computer works.

    I think the problem is that labor laws are so bad in the US that companies can get away with unpaid overtime, low wages, poor benefits, etc.

    I'm a software engineer, which is something that is often offshored. As an individual, I worry about my job getting off-shored. As a citizen of the world, I'm glad that people in India have a chance for a better life.

    Again, I don't think that off-shoring is necessarily the problem. I think it's a problem that people in other countries have terrible labor conditions with unpaid overtime, low wages, no benefits, etc.

    Part of the solution could be to impose tariffs on work done in places with bad human rights and labor rights. That impacts the bottom line and executives could then make their cost-benefit decision in a way that puts workers around the world on a more even footing.

    •  outsourcing is critical for IT to function (0+ / 0-)

      total agreement here...

      Software is complex and constantly changing. Even if you were a 100 person company and had some benefit in having an IT department, it still makes sense to outsource to an IT specialty firm... there's no other way to keep up to date on the latest stuff.

      In some countries with strong labor laws -- like Germany -- it's extremely rare for companies to EVER hire programmers directly... because once they're hired, they can't be fired. Even if you no longer need them. Most of the IT folks I know in Germany are all independent contractors that work for 6 to 9 months on a project, then leave.

      But... weird tax breaks the encourage people to outsource IT jobs to India??? Very bad idea... that kills jobs in the US and only benefits a tiny number. It makes much more sense to open up the floodgates and let a million Indians emigrate.

      •  Maybe the tax breaks were an "economic development (0+ / 0-)


        There were a lot of well-meaning attempts back in the 1950s & 1960s to assist various Third World countries to improve their standard of living. That's one reason why at least 85% of the countries in the world have Most Favored Nation trade status with the US. I wouldn't be surprised if a program to encourage exporting jobs from the US for the same reason was started at the same time.

        Of course, back in those days, it was assumed that any such program would have a minimal effect on the US economy, & in the event of an economic downturn either companies would stop the practice for the short term either out of patriotism or enlightened altruism (where are your customers coming from if your employees aren't in the US?) or the program would be eliminated in response to seeking votes. Of course, times have changed.

        And the interesting fact is that this program, if it did exist, had a minimal effect in improving foreign economies. Countries like Korea, Taiwan, Thailand, Indonesia, India & Pakistan bootstrapped themselves into affluence; they didn't need a US tax break to do that.

    •  That's not outsourcing. (2+ / 0-)
      Recommended by:
      Miggles, kurt

      It's buying a service. The job of maintaining your computer never existed so there was no job to outsource.

      I feel like I'm taking crazy pills!

      by itsjim on Wed Jun 27, 2012 at 09:58:51 AM PDT

      [ Parent ]

  •  I Am A Software Engineer (1+ / 0-)
    Recommended by:
    Mister T

    I work as a consultant to one of the largest Indian offshoring companies in the world. I know the difference between outsourcing and offshoring.

    "There’s a very simple difference between outsourcing and offshoring,” Fehrnstrom said on CBS' "Face the Nation." "[Outsourcing] is done by companies every day. They take functions and they allow vendors to do it rather than handling it in-house. Offshoring is the shipment of American jobs overseas."
    This is the classic distinction between the two and to my knowledge always has been.

    But beyond this, since when did the Democratic Party become so adverse to offshoring?

    Where are all of the Daily Kos 'one worlders' and 'free traders' who would argue 'this is just globalization, get used to it'?

    What the fuck effect do you think the Trans-Pacific Partnership is going to have?

    I won't be coming home tonight, my generation will put it right - Genesis 9:3

    by superscalar on Wed Jun 27, 2012 at 06:21:25 AM PDT

    •  simple: people don't like losing their jobs (3+ / 0-)
      Recommended by:
      caul, Miggles, Fairlithe

      When you lose your job, you don't care one whit whether it was "outsourced" or "offshored." Yes, in the long run things will work out for the best, but in the long run you'll also be dead.

      I have no problem with outsourcing or offshoring in principle. That's just the free market looking for efficiency. What I do have a problem with is people who think it's perfectly fine to fire a bunch of workers, then give them zero help finding another job.

      Romney has lots of experience firing people. He does not have much experience helping unemployed individuals find jobs... nor does he even seem to think that Government has a role in creating jobs.

      That's not a good combo.

      •  The difference is important. (2+ / 0-)
        Recommended by:
        llywrch, AmericanAnt

        If your job is outsourced, you still have a chance to keep it, albeit by working for another company. I have seen this happen lots of times. A company decides to outsource its Telecom department, but keeps the same people, in the same roles, but on a contract basis. Often times this works out better for the employees as they may find more opportunity working for a company whose core business aligns more closely to their skill set.

        If your job is offshored, you are SOL.

        I feel like I'm taking crazy pills!

        by itsjim on Wed Jun 27, 2012 at 10:05:05 AM PDT

        [ Parent ]

        •  Oh joy, they "keep" their job (3+ / 0-)
          Recommended by:
          blueoldlady, Fairlithe, kurt

          but lose health insurance, paid vacation, personal days, sick days, employer match on their FICA, workers compensation coverage if they are injured on the job, eligibility for unemployment  and most of the protections afforded employees under labor law since the relationship with the company has changed from employer/employee to a contracted business relationship.  I'm having a hard time seeing the benefit for the worker with this arrangement.  

    •  When you shut down parts of companies that (4+ / 0-)
      Recommended by:
      caul, trueblueliberal, Fairlithe, kurt

      were staffed domestically, and then ship that same part of the company/those same jobs overseas and staff them there with cheaper labor, that is outsourcing done to cut down on labor costs and to kill American jobs.

      When you lay off workers and then turn the jobs those workers had done, over to contract labor done domestically for an outside contractor, labor that lacks benefits, is done under abusive conditions, or barely pays enough to survive, that is outsourcing done to cut down on labor costs and to kill good=paying American jobs.

      The point is, both outsourcing and offshoring cut down on good paying American jobs.

      That is the essential point to be hammered home with regard to Bain and to any other corporate practices in this regard.

      That's one more thing to add to my long list of small problems. --my son, age 10

      by concernedamerican on Wed Jun 27, 2012 at 08:29:30 AM PDT

      [ Parent ]

      •  Wrong (2+ / 0-)
        Recommended by:
        itsjim, Sparhawk

        The point is, both outsourcing and offshoring cut down on good paying American jobs.

        In some cases outsourcing can create new jobs. In some cases outsourcing can create lots of new jobs.

        Trying to equate outsourcing with offshoring is a losing proposition to those who have had a lot of experience with both.

        I won't be coming home tonight, my generation will put it right - Genesis 9:3

        by superscalar on Wed Jun 27, 2012 at 08:34:59 AM PDT

        [ Parent ]

        •  You miss the point. ¨New jobs¨are not (5+ / 0-)

          necessarily ¨good paying jobs.¨

          If you are laid off from a good paying job and your job is outsourced to someone working for shit pay for an outside contractor, and then if you have to look for work and all that is available for you is a shit job working as subcontracted labor, it´s absurd to say that this is a good situation because there are two shitty low'paying jobs as opposed to one good paying job.  That´s just absurd.

          That's one more thing to add to my long list of small problems. --my son, age 10

          by concernedamerican on Wed Jun 27, 2012 at 08:53:53 AM PDT

          [ Parent ]

    •  But it is so much easier (1+ / 0-)
      Recommended by:

      to paint your opponent as an evil businessman and rant with simple bumper sticker talk.


    •  Bullshit (3+ / 0-)
      Recommended by:
      blueoldlady, Miggles, a2nite

      You and your "politicians are all the same" bullshit can put it where the sun don't shine.

  •  It's really simple. (4+ / 0-)

    Offshoring is when the job moves overseas, whether or not the offshore employee works for the same company.

    Outsourcing is when the employee works for a different company, whether or not that person is overseas.

    Literally and practically, offshoring and outsourcing are different things; you can do one without the other. Such as delegating your warehouse operations to a domestic operation that specializes in those things: outsourcing without offshoring. Such as directly hiring a hundred call center workers in the Phillipines: offshoring without outsourcing.

    So it's not always a crazy hair-splitting distinction.

    But in the cases we're talking about with Bain, the distinction isn't relevant because the jobs were largely being both offshored and outsourced. Business people use those words as not-quite-right synonyms all the time.

    Bottom line, it's a little bit sloppy to complain about "outsourcing" American jobs when we really mean the problem is the "offshoring" of them. But just because the language is imprecise doesn't mean you and I don't know that Bain restructured American companies to move more jobs out of the United States... whatever you choose to call that.

    •  offshoring is a sub-set of outsourcing (2+ / 0-)
      Recommended by:
      caul, blueoldlady

      If Parent Co. is not doing it in-house, with its own employees, it is outsourcing. If its having the work done in India, the Phillpines or elsewhere, its outsourcing it offshore. Its the offshore variety that hurts this country most, since the jobs are lost the income that the worker doing that job is spend to help some other nation's economy.

      •  I disagree (1+ / 0-)
        Recommended by:

        As other commenters have pointed out, the two are related but distinct. For example, I have heard that while IBM is hiring more employees, they are doing so largely outside the United States. While the claim is that they are doing so because that's where the business is, it clearly isn't helping most American workers to learn that IBM is hiring when the jobs are not going to be here. In general, this is true of many multi-national companies, who often find it advantageous to set up a wholly-owned call center someplace cheap even if they maintain the people as direct employees. If the national requirements for work hours, benefits, etc. are less than they would be in the US (or Europe) they are essentially getting the benefits of cheaper labor without the hassles of contract labor.

        There are plenty of cases where out-sourcing ends up with the jobs being given to off-shore companies, but the two are not synonyms, and to pretend that they are is not helping our cause any, IMHO.

        •  Beyond This, It's Hypocritical (1+ / 0-)
          Recommended by:

          Diana Farrell virtually wrote the book on offshoring when she was a McKinsey.

          Gene Sperling facilitated the offshoring of domain knowledge thru the H1B program.

          Both are economic advisors in the Obama administration.

          The Democratic Party is, as a whole, no more opposed to offshoring than the Republican Party, only the motives are different.

          I won't be coming home tonight, my generation will put it right - Genesis 9:3

          by superscalar on Wed Jun 27, 2012 at 08:44:18 AM PDT

          [ Parent ]

        •  They aren't synonyms (0+ / 0-)

          "mammal" is not a synonym for "dog", but a dog is a type of mammal. Outsourcing means that the parent company isn't using it's employees to do a task in house. A company in Manhattan that uses a call center in Ohio to handle its customer calls is outsourcing that function. So is a company in Manhattan that is using a call center in Bangalore or Manila, it is using offshore labor when it outsources while the other one is not. I abhor the practice of offshoring, but it is a form of outsourcing, much more harmful to the US that onshore outsourcing..

          •  It's a classic 2x2 grid, not a part/whole relation (1+ / 0-)
            Recommended by:

            On one dimension you have location of work (domestic/foreign).

            On the other dimension you have control of labor (employee/contractor)

            All 4 combinations are valid, and there is no hierarchy that says "all of A is also B" the way there is for dog/mammal.

            Obviously domestic/employee is the base case.

            Outsourcing is either domestic/contractor or foreign/contractor.

            Off-shoring is either foreign/contractor or foreign/employee.

            Domestic/contractor is out-sourcing but not off-shoring, while Foreign/employee is off-shoring but not out-sourcing.

            •  But also more to the point... (1+ / 0-)
              Recommended by:
              Dr Swig Mcjigger

              ...both offshoring and outsourcing tend to be bad for American workers. And they really do often go together, so from a worker's point of view it's usually a matter of nit-picking disingenuousness to get too wrapped up in this.

  •  I have written a diary partly in response to this (2+ / 0-)
    Recommended by:
    Jerry J, llywrch

    I started off with a comment here, but decided to work it into a stand-alone diary, located here. Hopefully this isn't a hijack.

    •  I got to the part where you claim (2+ / 0-)
      Recommended by:
      blueoldlady, Fairlithe

      outsourcing is about finding vendors who can do the work very well and quit reading.

      Outsourcing isn't about finding people who can do the job really well, it's about finding people who can do the job really cheap.

      It's not as if these outsourcing companies care if a temp worker produces a product that falls apart in 3 months or whether they offer customer service that's actually useful. Let's not be naive.

      They aren't looking for quality. When they talk about quality it's merely from the standpoint of whether it's cost competitive and the level of quality is barely passable. That's how it works in the vast majority of cases with outsourcing.

      So I didn't get past your premise, because I think your premise is way off.

      •  I'm sorry you stopped reading (0+ / 0-)

        The opening said "In theory, out-sourcing is about finding somebody to do the work well," but later on I stated that "In reality, it's about the powerful taking advantage of the less powerful.

        You don't have to agree, nor even read my work, but it would be nice if you read it all before disagreeing.

  •  Both outsourcing and offshoring cut down on (5+ / 0-)

    good paying American jobs.

    They reduce or get rid of good paying American jobs.  Outsourcing might create ¨jobs¨, but they pay shit.

    So what they have in common is that offshoring and outsourcing are the same kind of practice when it comes to their shared outcomes: reducing the American labor marketplace to one where the only thing available is either no job, or a low paying job.

    That is the essential point.

    That's one more thing to add to my long list of small problems. --my son, age 10

    by concernedamerican on Wed Jun 27, 2012 at 08:33:06 AM PDT

    •  I Eagerly Await Your Diary (0+ / 0-)

      On that evil outsourcer and Democratic Senator Frank Lautenberg.

      Frank Lautenberg co-founded ADP

      ADP is an HR and Payroll Services outsourcing company.

      I can't wait to read your soon to be published diary.

      I won't be coming home tonight, my generation will put it right - Genesis 9:3

      by superscalar on Wed Jun 27, 2012 at 08:49:53 AM PDT

      [ Parent ]

      •  You´re just being snotty about this. And you (4+ / 0-)

        know that you are in the wrong when it comes to this issue.

        You know that the end result is the same, even if outsourcing and offshoring are two ¨different¨things.  You know that both have the effect of creating a labor marketplace in which labor costs are reduced to the benefit of companies and their profitability, but to the detriment of American workers, who need good paying jobs on American soil.


        That's one more thing to add to my long list of small problems. --my son, age 10

        by concernedamerican on Wed Jun 27, 2012 at 08:57:36 AM PDT

        [ Parent ]

    •  I think you are painting with... (0+ / 0-)

      ...too broad a brush. I have seen cases where people's jobs were outsourced and not only did they keep their jobs, but were better off working for the outsource company. One good example was when Bank 1 outsourced its telecom department to AT&T. People who were Bank 1 employees on Friday were AT&T employees on Monday. They still had the same jobs, same offices, same phone numbers, but better comp packages with AT&T.

      I feel like I'm taking crazy pills!

      by itsjim on Wed Jun 27, 2012 at 10:19:02 AM PDT

      [ Parent ]

      •  I think this is the exception rather than the rule (2+ / 0-)
        Recommended by:
        blueoldlady, kurt

        though you are right to point it out.

        That's one more thing to add to my long list of small problems. --my son, age 10

        by concernedamerican on Wed Jun 27, 2012 at 11:22:29 AM PDT

        [ Parent ]

        •  There are other examples. (0+ / 0-)

          GM outsourced its IT to EDS. I know lots of people who did just fine under that arrangement.

          Ford outsourced its PC service business to Loral...same thing.

          I think it's important to realize that in cases like this, the workers really do tend to be better off working for a company where their skills are more closely aligned with the company's core business. I can tell you that as a telecom guy working for Ford, I was in a dead end career path. As a telecom guy working for AT&T, I have had much more opportunity. Although my job at Ford wasn't outsourced...I outsourced myself.

          Whether these are exceptions or not, I don't know. I don't have the data to make that evaluation.

          I feel like I'm taking crazy pills!

          by itsjim on Thu Jun 28, 2012 at 09:10:53 AM PDT

          [ Parent ]

          •  But when it comes to Bain, the argument can be (0+ / 0-)

            made that the workers in most of the outsourcing that occurred, were NOT better off.  The outsourcing that was done was not about valuing people´s skills and trying to retain workers, but about sheer profit.  

            The argument also can be made that Bain had a standard practice of offshoring their outsourced jobs.  In this case, obviously, American workers were NOT better off.

            That's one more thing to add to my long list of small problems. --my son, age 10

            by concernedamerican on Fri Jun 29, 2012 at 12:01:43 AM PDT

            [ Parent ]

    •  Exactly right. (2+ / 0-)
      Recommended by:
      concernedamerican, kurt

      No one ever outsourced a function so they could pay more for it.

      It's true that in some instances there may be economies of scale or other efficiencies and the outsourced function continues to create decent paying jobs.

      But WalMart didn't outsource its janitorial functions because of economies of scale.  The government said they outsourced the function so they could do this:

      10.  Beginning in 1998 and continuing through October 2003, enforcement actions undertaken by Special Agents of the Immigration and Naturalization Service...documented that independent contractors used by WAL-MART to provide floor cleaning services were knowingly hiring, recruiting, and employing unauthorized aliens in violation of Title 8, United states Code, Section 1324a.
      And, according to the janitors' class action lawsuit, the outsourcing was done so the employer could get away with this:  
      [Plaintiff Janitor was] paid a lump sum weekly compensation of $350 and was obligated by defendants to work 7 days a week; …worked at least 60 hours per week but did not receive over time;  …did not have worker compensation or health insurance benefits, was not entitled to receive sick leave or disability benefits and did not have taxes or F.I.C.A. withheld from pay.

      The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges. -Anatole France

      by blueoldlady on Wed Jun 27, 2012 at 11:14:27 AM PDT

      [ Parent ]

  •  "Corrupt business practices" (2+ / 0-)
    Recommended by:
    superscalar, Sparhawk

    My, my.. what a loaded phrase that is.

    All that you have described is simply good business management.  Larger corporations have been doing exactly those type of analyses you describe above for decades.  They are simply large enough to do them in-house.

    Bain offered these same management services and expertise for hire, or for an investment in a firm or as an opportunity when they saw struggling firms and bought them out.

    Corrupt?  Not at all.

    Devastating to American workers? Hell, yes!  But that's what the whole globalization process has been.. devastating to American workers.

    Foreign workers are competing for our jobs.  Is this news to you?

    And another clue for you.. outsourcing has been done for over a hundred years.. One of the biggest outsourcers is the automotive industry.  Who do you think makes seats for GM cars? Radios?  Shocks?  If you answer "GM", you would be wrong.  

    One more tidbit..  GM, since the bailout (and with the US Government being the largest shareholder) has outsourced thousands of jobs out of this country.  Will you be writing a diary of how the Obama administration is guilty of approving of "corrupt business practices"?

    And will that critique include how the Obama admin closed thousands of auto dealers and put tens of thousands of Americans out of work in their consolidation efforts to help a struggling company?

    Or, will you say that was simply "good business practices"?

    •  You Are Deliberately Trying To Confuse People And (4+ / 0-)

      are comparing apples to oranges. They are both fruit, and that is where the similarity ends. The Obama administration helped the domestic auto industry to survive in this country via the bailout, and saved millions of American jobs in the process. As opposed to RMoney and Bain Capital, whose purpose was NOT to  "save" any US jobs, but instead to ship as many jobs overseas as possible to make profits for itself and its shareholders.  Now answer these questions: Did President Obama pocket millions with the auto bailout? Not that I know of.  Did RMoney pocket millions when Bain Capital offshored American jobs - YES!! Did President Obama help to "save" every single automotive job in this country? No, but he saved the majority of jobs thanks to the bailout. Did RMoney "save" any US jobs when Bain offshored US companies? NO.

      •  From the point of view of displaced auto (1+ / 0-)
        Recommended by:

        industry workers, what the hell is the difference?

        No.. Obama didn't personally make millions from saving GM & Chrysler.  So what?  The "profits" are being held by the federal government instead of a private capital firm.

        The point is: Obama did exactly the same thing for GM and Chrysler that Bain did for many other companies - applied harsh business practices - cutting divisions, cutting redundant offices (dealerships), cutting drastically employee benefits and pay and eliminating thousands of jobs.

        GM, last year, opened a new $540 Million dollar plant in Toluca Mexico to make engines.  WTF is the difference, I ask you??

        Did RMoney "save" any US jobs when Bain offshored US companies?
        Are being purposely naive/obtuse/ignorant here?  

        Of course Bain saved US jobs.  Some of those companies were so badly run, they were failing.  Some were so bad off they had to go through bankruptcy (much like GM did without the formal declaration) before they emerged a healthier company.  Some of those companies have thrived after reorganization.  Some of those companies would have gone under if they had not offshored, leaving thousands of US employees without jobs.  

        Perhaps not on a scale of a GM, but who knows how many thousands of US jobs Bain saved?

    •  As soon as I see a picture of Obama (1+ / 0-)
      Recommended by:

      with his pockets stuffed full of cash he got by raiding people's pensions.

      You hypocrite fraud.

      •  So, doing it without profit (0+ / 0-)

        makes it ok?

        Obama did to/for GM exactly the same things Bain did for companies.  The feds now hold billions of dollars of GM stock in trade.

      •  So, It's Not The Offshoring/Outsourcing (1+ / 0-)
        Recommended by:

        That you really object to, it's whether the person doing the offshoring/outsourcing made money at it?

        If I offshore a bunch of jobs, but I don't personally benefit from it, that's okay, but if I make money at it, it's bad.

        I'm trying to follow your logic, but the cognitive dissonance here is beginning to make my head hurt.

        Why is it that I believe that you don't have a farts worth of experience with either outsourcing or offshoring?

        I won't be coming home tonight, my generation will put it right - Genesis 9:3

        by superscalar on Wed Jun 27, 2012 at 11:52:13 AM PDT

        [ Parent ]

        •  You aren't trying to follow anything (0+ / 0-)

          You're making up arguments for yourself to refute, asshole.

          Why is it I suspect you have way too much experience outsourcing, suckhole?

          •  Here Are Some Comments (1+ / 0-)
            Recommended by:

            From long before you got here to some other folks who confused offshoring with outsourcing.

            I Think You Mean -- Offshoring 2007

            I also think that there are some people who have a lot of time invested in conflating and confusting these two terms.

            A Relevant Link

            On a side note I would find the continuing statements on offshoring by the 'free trade' economists and groups like the ITAA absurdly funny if I wasn't an engineer and hadn't taken all of those logic and critical thinking classes. After ten years of college and a career which lasted almost exactly ten years before it came crashing down I instead now find some of these statements only stupid and self-serving.

            As to your response here, I predict you'll go far with the whole 'suckhole' argument.

            Logical Fallacies

            Pay particular attention to the first item in the list Ad Hominem, read it over and over again until you truly understand what it says.

            I won't be coming home tonight, my generation will put it right - Genesis 9:3

            by superscalar on Wed Jun 27, 2012 at 12:18:49 PM PDT

            [ Parent ]

            •  You started by making up my arguments (1+ / 0-)
              Recommended by:

              so that you could refute them.

              I don't think you really get to talk about logical fallacies or ad hominems, suckface.

              We don't have to conflate and confuse the two terms, because for firms like Bain, outsourcing is offshoring.

              Or are you illiterate too?

              Maybe it's about time you crawled back on up Romney's hole where came from?

        •  Incentive (0+ / 0-)

          Stop pretending you're that dumb, or I'll just go on assuming you're a Wall Street tool who's being disingenuous.

      •  You come across as more nasty than angry (1+ / 0-)
        Recommended by:

        You should feel free to disagree with people, but the vast majority of the comments I've seen from you contain phrases like "hypocrite fraud," "you're wearing clown shoes aren't you?" and the like, none of which exactly move the conversation forward.

        It's your house so you can feel free to run it how you like, but this doesn't strike me as a terribly mature form of discussion.

  •  Here is how understood their explanation (1+ / 0-)
    Recommended by:

    Americans lag behind other modern nations in science, math, and reading comprehension. Now we learn from Mitt Romney, who like President Bush has an MBA in business, Americans don’t understand economics either. While many Americans lost jobs because their employer moved those jobs overseas, Americans don’t differentiate between “outsourcing” and “off-shoring” jobs.

    The Romney campaign explained that building a factory in a foreign country to make products that American workers were making is off-shoring. When companies hire people in foreign nations to do work Americans were doing, that is outsourcing. Sometimes these are good and sometimes they are bad.

    Specifically, when Romney’s Bain Capitol financed companies pioneering in off-shoring and outsourcing it was good. Likewise the Ryan bill that protects tax breaks for moving jobs overseas is good. If an Obama policy results in jobs moving overseas, that is bad and hurts America workers.

    Hopefully this clears up the difference between outsourcing and off-shoring and why Governor Romney’s way is good and President Obama’s is bad.

    I don't know what consciousness is or how it works, but I like it.

    by SocioSam on Wed Jun 27, 2012 at 09:25:45 AM PDT

    •  Think Of It As 'Offshore Outsourcing' (0+ / 0-)

      Versus 'Onshore Outsourcing' (offshoring is sometimes referred to as 'offshore outsourcing').

      I oppose the practice of 'offshore outsourcing' and have for decades now.

      I don't necessarily oppose 'onshore outsourcing' because it can be either a net positive or a net negative.

      I get the sense that Axelrod and Plouffe are flailing around here trying to find something else, anything else, to talk about then the current state of the economy -- if they are going to hang their hat on 'outsourcing is inherently bad' ... well ... good luck with that.

      I won't be coming home tonight, my generation will put it right - Genesis 9:3

      by superscalar on Wed Jun 27, 2012 at 09:35:26 AM PDT

      [ Parent ]

      •  It's almost NEVER a net positive (2+ / 0-)
        Recommended by:
        a2nite, kurt

        for workers.

        By definition.

        Fewer benefits, lower standard of living. That's why they outsource.

        To pretend otherwise is just a lie, as you very likely know.

        Dems have a huge winner in this issue, because American workers know how it actually works from experience.

  •  Typos in graphics ... (2+ / 0-)
    Recommended by:
    addikell, blueoldlady

    "Is the departement truly unique?"

    "Dowload to Divisions"

    "Stend alone at the corporate"

    Are these really on the the Bain website? Are they offshoring their own website and doing a piss poor job of it?

  •  And the guys that make these (3+ / 0-)
    Recommended by:
    blueoldlady, trueblueliberal, kurt

    decisions always think that THEIR job is too "unique" to be outsourced.

    Bain is actually an executive outsourcing firm.  Any board of directors that hires them is basically outsourcing their executive leadership of the company.

    Maybe this explains Romney's whole detachment problem - he's outsourced his soul.  He's an empty shell - just like the companies he destroys.

    "Mediocrity cannot know excellence." -- Sherlock Holmes

    by La Gitane on Wed Jun 27, 2012 at 10:42:57 AM PDT

    •  Yeah, I noticed that, too. (2+ / 0-)
      Recommended by:
      addikell, kurt

      By some strange coincidence, the jobs that "can't" be outsourced are the one likely to be held by the CEO and his best buddies.

      The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges. -Anatole France

      by blueoldlady on Wed Jun 27, 2012 at 11:42:26 AM PDT

      [ Parent ]

  •  Tipp'd, recc'd and Fbooked (2+ / 0-)
    Recommended by:
    addikell, trueblueliberal

    "I said, 'Wait a minute, Chester, You know I'm a peaceful man.'" J. R. Robertson.

    by NearlyNormal on Wed Jun 27, 2012 at 10:44:39 AM PDT

  •  So... question: (0+ / 0-)

    If Offshoring is bad (loss of American jobs).. and Free Trade Deals typically result in greater Offshoring...

    Then can one expect that Free Trade Deals are bad?

    Attacking Bain is fine.

    What about those who enable offshoring models and encourage offshoring via Free Trade ?

    Do those folks get a "pass"?

    The 1% Feast on Results while the 99% Starve on Rhetoric They Can Believe In.

    by Johnathan Ivan on Wed Jun 27, 2012 at 11:43:24 AM PDT

    •  Write a diary about it (0+ / 0-)

      and do the research.

      You know, like a responsible person.

      •  I get the distinct impression you're an advocate (0+ / 0-)

        of Free Trade.

        Are you also a fan of Bill Clinton's "Ending Welfare As We Know It", and subsequent repeal of Glass-Steagal?

        You know what we need?

        Another Deficit Commission.

        Or - and this is a doozy of an idea - let's cut the Social Security tax and make up for it by paying out of the General Fund.  No one will ever think to attack Social Security as contributing to the deficit.

        Did I say attack?

        I meant "reform" to "protect" it.


        The policies that advance the 1%'s interests are wrong under both Rethuglicans and Democrats.

        The 1% Feast on Results while the 99% Starve on Rhetoric They Can Believe In.

        by Johnathan Ivan on Wed Jun 27, 2012 at 04:28:27 PM PDT

        [ Parent ]

        •  Not accurate reflection of my beliefs (1+ / 0-)
          Recommended by:

          Which is why reading you make them up isn't a useful way to spend my time.

          •  Well, by all means, let us hear your opinions (0+ / 0-)

            on Free Trade.

            I recall you made some snarky response when I brought up the Free Trade issue.

            Perhaps I misread your response - perhaps you were encouraging me to help educate others on the evils of Free Trade Job Outsourcing?

            So - just to be clear - what are your thoughts on Free Trade?

            The floor is yours.

            The 1% Feast on Results while the 99% Starve on Rhetoric They Can Believe In.

            by Johnathan Ivan on Thu Jun 28, 2012 at 06:15:20 AM PDT

            [ Parent ]

            •  You're an asshole (0+ / 0-)

              and haven't earned my time with your asshole attitude.

              •  Well now.. so after you made a snide remark (0+ / 0-)

                to me... and I replied in kind...

                I'm the asshole, eh?

                Good sidestep on the issue.

                Not that Free Trade is defensible, despite the rantings of the Cato Institute (if you doubt me, I'll be happy to provide links).

                Isn't it interesting that your whole negativity is a result of my bringing up Free Trade Job Outsourcing?  I never knew it was a such a touchy subject.  

                The 1% Feast on Results while the 99% Starve on Rhetoric They Can Believe In.

                by Johnathan Ivan on Thu Jun 28, 2012 at 11:48:32 AM PDT

                [ Parent ]

                •  I don't owe you any explanation (0+ / 0-)

                  of my opinions, especially not after you played the part of the asshole and made them up out of whole cloth.

                  I'd call you an asshole if you made up my opinion on slavery too.

                  •  Awww... so sorry to have offended (0+ / 0-)

                    your delicate sensibilities on a political blog.

                    Getting the vapors yet?

                    Again.. the whole point is that you obviously had no intention of engaging on the subject.  

                    YOU chose to reply to one of my comments NOT directed at you specifically... and YOU chose to reply in a snide way.

                    I replied in kind.

                    You accused me of putting words in your mouth.. so I opened the floor and welcomed your thoughts on Free Trade.

                    Feel free to address the subject at hand.

                    Or, continue to engage in tit-for-tat with snide remarks.  



                    Btw - if you are pro-Free Trade Job Outsourcing,  you aren't alone.  Obama is all for it too.  Perhaps I'll quote him in my next response.  Yes, I think I shall.

                    The 1% Feast on Results while the 99% Starve on Rhetoric They Can Believe In.

                    by Johnathan Ivan on Thu Jun 28, 2012 at 12:27:55 PM PDT

                    [ Parent ]

  •  The beauty of this is that Romney is admitting (2+ / 0-)
    Recommended by:
    addikell, kurt

    defeat by resorting to the outsourcing != offshoring argument.  Putting on my "low information voter" hat, when I hear outsource, I think of jobs going overseas.  Doesn't matter if I am wrong about this distinction.  In the ballot box, that won't matter.  Multiply that by millions of voters in swing states like PA, MI, and OH where outsourcing and offshoring have done huge damage.  Romney can argue until he is blue in the face about technical definitions of outsource, but it simply won't matter.  He should just admit that he was and continues to be a vulture capitalist.  He made money through eliminating jobs and replacing well paying jobs with low paying jobs.

  •  Unfortunately for Mitt and the 1% (2+ / 0-)
    Recommended by:
    addikell, kurt

    This is an issue that can't be explained through lies or manipulation of information like Fox, WSJ and Rush do very well.

    Moving jobs to "Low cost centers" as it is called in my Company is something that affect workers, their families, their abilities to pay their rent, mortgages, bills and their kids through college. It is NOT some fictitious reality seen through the eyes of Bill O'Reilly.
    It is a practice that has seen cities, neighborhoods, town completely disappear from the map or become Ghost towns.
    Obama and the Democrats should bang on this issue until November. They should hammer Mitten on it. They should keep reminding Americans how Mitt made his money.

    Americans know EXACTLY how outsourcing affect their personal lives. I have trained plenty of Indians, Chinese at my job and my whole team knows the routine. We have seen the scripts before.
    If Bain would bring back all the jobs they shipped to India, China I'm sure unemployment would be in the low single digits. Tell them that, Mr. President. Tell them the truth about Bain and Mitt and the 1%

  •  When Outsourcing is Okay (0+ / 0-)

    I work for one of thousands of small companies who do work "outsourced" from U.S. government and non-government organizations. Everyone in the company I work for is either a US citizen or a US resident paying taxes here.  We can actually do certain things more efficiently than large organizations may be able to do for themselves.

    As long as Outsourcing=Onshoring I am a happy camper.  The moment that companies are rewarded with our tax dollars for shipping jobs out of the country I have a huge problem.

    "The Trouble with the rat race is that even if you win, you're still a rat." attributed to Lily Tomlin

    by uniqity on Thu Jun 28, 2012 at 09:32:00 AM PDT

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