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Is Outsourcing Bad for the Economy? Are We Irresponsible For Encouraging It?

Jay (Jason Van Orden) 55 Comments

biz-globeA few days ago we received an email chastising us for encouraging the use of offshore outsourcing. I spent a couple hours exchanging emails with the sender where we shared our differing opinions.

As a result, it struck me that Sterling and I hadn’t fully shared our our views on what could be an emotionally charged issue given the current economic climate (not only in the U.S. but in many places around the world.) This is a long post, but it is one that is important to consider.

In the interest of discussion, I’ve included the email here (with the sender’s name omitted) followed by our views.

Sterling and Jay,

I’m surprised that you would boast about outsourcing to the Phillipines at a time when unemployment in the US is at a high.

There are plenty of highly qualified tech people looking for work in the US who can help you–people who can actually come to your office and meet you in person.

I understand that businesses have to be competitive. And, they are often driven to find the cheapest price, but at what cost–fewer jobs in the US, the comodification of high-level intellectual jobs; which makes it difficult for US companies to compete because we use local talent and have to charge more.

Your email announcement describes hiring this person like you found a great online deal on a laptop. This is just as problematic, if not more, as hiring outside the US–human beings are not commodities.

I’m sorry you’ve gone this route. You have lost a devoted follower.

NAME OMITTED

This was in response to an e-mail newsletter that said we’d just hired a full-time Filipino web developer for $500 USD a month.

In my emails I responded to the following claims.

  1. That we caused harm to jobs and the economy.
  2. That we talked about a human being as a commodity.
  3. That we have a responsibility specific to the U.S.

Here are my thoughts on each of these points.

Which Option Would You Pick?

When making business decisions, it’s important to consider your Definite Major Purpose as well as the impact that your actions will have on others. For us the ultimate mission is to bring increased freedom and financial stability to our listeners and Academy members.

Continually improving our sites and web services  helps us accomplish this mission. We’ve reached the point where this requires hiring an ongoing web developer. To do this we have two options.

Option 1

The first option is to hire domestically. Our budget allows us to engage a freelancer for ten hours of work a month. Compared to a full-time developer this only provides a sixteenth of the improvements to our sites (ten hours a month instead of 160, thus greatly limiting our ability to accomplish our primary mission.

In order to afford more time from a domestic freelancer, we’d have to raise our prices to cover the additional expense. This would make it harder for people to afford our help to create the income they need.

Option 2

On the other hand, with the same budget we can hire a full-time web developer in the Philippines. This gives him a very livable salary. We achieve sixteen times the site improvements than if we hired in the U.S. Consequently, our ability to reach and help people create their own business and income is vastly improved.

Outsourcing Leads to a Stronger Economy

By being more cost-effective, we assist more of our listeners to achieve financial stability and freedom. As a result, new businesses are created. This leads to more jobs and income. It has been said repeatedly that small businesses are the backbone of our economy. Thus, our services are helping to improve the current economic climate.

Let’s take a look at concrete examples of how this has taken place with some of our students. Consider Pat who was laid off last year and now, thanks to our help, makes more money than he ever did in his job.

Then there’s Curt, whose son’s medical bills were going to require him to get a second job. Instead he started an internet business and now he has a means of earning the money he needs without having to sacrifice valuable time with his family.

In addition there’s Cornelius. He was able to create a thriving business around his profession. Now he teaches others how to thrive in that same profession, hence making their job situation more solid.

Our Moral and Ethical Position

We recognize that having a popular podcast puts us in a position to influence a number of people. This is not something that we take lightly. We continually consider the effects of our actions. Most important, we make it a policy not to do anything that would harm another human being.

We don’t feel that hiring offshore professionals, or encouraging others to do so, does any harm. In fact, as stated above, we feel it is just the opposite. Therefore, we don’t have any ethical or moral reservations about the approach we have chosen for our business.

A Person is Not a Commodity, but Skills Can Be

When it comes to the claim that we were speaking about humans as if they were commodities, it has never been our intent to devalue a human being in the content that we publish.

We by no means condone the treatment of a human being as an object nor do we do so. Anyone that is hired full-time should be treated with respect whether they are local or virtual/offshore.

We’ve given a full-time job to a young man right out of college in the Philippines at a salary higher than he would otherwise have made. He sets his own hours and work on things he finds challenging and interesting, as well as getting paid to learn new skills along the way.

We provide him with paid holidays and don’t ask overtime of him (which is more than I can say for most U.S. employers). He gets raises and bonuses more than once a year.

He’s treated much better than I ever was as an employee in the U.S. I was treated like I was a replaceable commodity. We treat our full-time people with far more respect.

Now, it should also be recognized that a given skill set will change in value over time. Some are easier to find than others. Perhaps that qualifies as a commodity. Even so, respect and ethical treatment should always prevail.

Not a U.S.-Specific Issue

Finally we come to the claim that we have a responsibility that is specific to the United States. Internet Business Mastery is not a U.S.-specific podcast or business. We have as many customers and listeners outside of the U.S as we do within.

Our mission to teach personal freedom and responsibility and is not based on any ideology that is U.S.-specific.

In any case, we feel that anything we teach only helps the situation in the U.S. in the long run as well as anywhere else that we have listeners and Academy members.

In All Things, This is Paramount

There’s one final note that needs to be made on this matter. As with anything we share in our content, it’s up to each individual to consider the best decision for them. You know your circumstances better than anyone. How you apply what we teach is up to you. In all things, personal responsibility and free will are paramount.

If you decide that your Definite Major Purpose is better served by hiring locally, our hope is that you would follow that as long as it didn’t harm anyone.

Thoughts from the Community

While writing this blog post I posed the question to Twitter and Facebook to get thoughts from the community. I’ve included a number of the responses here. The opinions expressed here are solely the view of each individual author and not necessarily our view.

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Best Outsourcing Site

Every time we mention outsourcing in our content, someone asks about where we go to hire our full-time people. You can learn everything you should know and find the people you need here.

What Do You Think?

  • Is outsourcing a good business practice or is it irresponsible?
  • How has outsourcing impacted your business?

Please share your thoughts in the comments below.

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55 Comments Leave a Comment


Interesting article – I think that we need to put this in perspective a little bit. The types of businesses we are talking about are what people call “Lifestyle Business” – which means that they are usually a smaller scale that a Google or GM. These business need a wide margin to support even one owner so hiring a full time US worker would be very unrealistic and it just would not happen. Period.

Another thing is adaptability – these small scale businesses must be flexible to succeed. Hiring an overseas worker will give you that flexibly more so than a US employee who must work in your brick and mortar office and coming with too many legal issues. In my previous life working a day job we could not fire people when business conditions changed or people did not work out. Very bad.

PS: it is not really “outsourcing” if you did not have full time employees in your company whose jobs you took away. The term “outsourcing” is emotionally charged because it usually means a whole swath of people lost their jobs. From listening to the podcast that these two guys do I know that they didn’t take US worker’s jobs away – they just created brand new jobs in another country. The only way this is “outsourcing” is that they personally no longer do that work.

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ET

I was laid off from a company that outsourced to India. Was I laid off because an Indian took my job? No, it was because a US company didn’t pay their bills!! Who else was laid off??…All the Indians we outsourced to!

Luckily, this was chance I was looking for! I hated the cubicle life anyways! Now I live in Japan with my family, enjoy life, and have a nice little business that affords me the time to hang out with my 2 year old son on the beach, everyday!! I don’t have a VA or outsource anything yet but you better believe when the time is right I will.

Actually, come to think of it I do outsource some work! I outsource some editing and technical writing to a former co-worker that was laid off as well. I don’t do much but she is very happy when I paypal her money for editing and technical writing, and I am happy because my grammar and punctuation sucks :-)

Having worked in India, lived in Japan, and traveled to many places I have learned to be very open minded. We live on a very very small planet and it’s only getting smaller.

Could go on but that’s enough for now ;-)

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I imagine your screen will keep this comment off the board.

Let me get this straight. I want to make sure I understand what you are saying. You are paying someone from outside the US less than $3/hour and you think this is morally OK. Sort of the “do no wrong” philosophy.

And to you, and most who have responded on the blog see nothing wrong with that. Line your pockets and move on.

Additionally you claim the jobs you create with your service adds to the economy more than the jobs that you have moved.

I want to make sure I get that.

I am a die hard capitalist conservative. I believe you hire the work for what the market will bear and can charge.

EXCEPT

When you expect to take advantage of all the services, choices, and freedoms this country gives you. When you expect to take advantage of all the tax breaks to shield your money so you pay less than your fair share. Being a citizen comes with responsibilities more than just feathering your nest. People have fought and died so you could pompously sit on your butt and hire overseas.

Our arguments in the US over illegal labor comes directly from people like the ones responding on the board. Cheap labor wins..to hell with what it does to anyone else. Is it going to be way more expensive to hire talent in the US? we all know the answer is absolutely.

The fact this argument comes up at all is a sign that you know its selfish, arrogant, and self centered and you want a sign from those who are equally so that its OK to be an ass.

I’m not a union member…and I don’t think they serve any purpose in our society. Except to call attention to the daily attacks on our economy from businessmen who’s only responsibility is to their own pocket, and not to the betterment of where they live.

For me, I would eagerly support removal of the tax deduction of expenses that come with overseas hiring. If you’re going to hire there, you can’t make me subsidize it by giving you a tax break. I’d support a punitive tax in addition to the removal of the deduction.

Its this kind of “we are the world” socially irresponsibility that has us on our heels today.

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It’s about winning in the competition too! It’s an open market and businesses can use anything for their development, including outsourcing stuff. If government isn’t giving incentive, it should not force domestic employment.

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ET

“You are paying someone from outside the US less than $3/hour and you think this is morally OK. Sort of the “do no wrong” philosophy.”

$3 dollars an hour is a vary nice wage in the PI!! Nothing immoral about this.

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Exactly, I can’t make a better point then the ones posted above.

Sure I can hire someone in the US, but he will break my bank and wind up out of another job. However, if this can be delegated offshore, save me money, do an awesome job, and provide someone with a better quality of living, I’m all for it.

As a matter of fact, both Filipinos I have working for me thank me every single day for the opportunity to have their job. One is right out of college, and is looking for a long term position in a company. Another has a family to look after and provide for. I am extremely pleased to provide for both of their needs and expand their learning, as well as help me out. Its a win-win situation all around, and I would have it no other way.

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Ray’s arguments just aren’t sounding logical to me. Ray, you sound outraged about a number of things but I don’t understand what precisely you think is the harm in hiring overseas. What exact damage is it causing our country? Who exactly is it harming?

I’m not outsourcing overseas yet, but I don’t think there is anything wrong with it. You’re paying an ethical wage to free people who are welcome to stick with you or not, you’re paying taxes on the income made, to support your own people and government.

Further, the majority of these jobs that internet marketers are creating would simply not exist if there wasn’t the difference in currency. It’s not that an American is losing out on a job that should be theirs, it’s that either you give a great job to a Filipino person or you give nobody a job.

Americans, with their language skills, education, and “services, choices, and freedoms”, should be able to compete just fine in this kind of economy. Remember, any individual can hire out work online. This isn’t one of those choices that only the elite have.

Anyone threatened by this just needs to step up their game and learn to maximize what they have to offer so that they can compete more effectively. I can think of many reasons why an American is better-placed to sell products and services to Americans – if an American feels passed over for jobs because of the Philippines then they need to take a hard look at what they can offer that is truly unique and provides amazing value for the extra money they require.

Also? Anyone objecting to outsourcing better have Libertarian values to go with that objection. If the government didn’t make it so extremely cost-prohibitive to hire employees locally, and make the paperwork and regulations so time-consuming and ridiculous, there’d be more local jobs and wages would be higher. I can say that for a fact in my offline business -for sure I’d pay my people more and hire more people if it weren’t for government involvement making the process so expensive and exhausting.

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This is also a very real issue in the UK. I have run web businesses for over 12 years and for as long as possible resisted the option to outsource. The high costs of good professional IT staff in the UK eventually forced me to reconsider and launch a new business model based on using trusted freelancers and contractors. I now successfully outsource design and development work to UK, US, India and Netherlands. Basically to whoever is the best freelancer for the specific job. Global economy means global reality – you either become a part of it or go under. Realism rules – no time for pessimism, optimism prevails.

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@Ray Massie, et al,

I think that if you think parochially, then things like zealous nationalism and hyper-focus on our own little sphere become acceptable. It’s the same mentality that says that American lives are worth more than the lives of others living in foreign countries.

It is when I began to think of myself first and foremost as a citizen of this planet, and then all the other things that I am, that I started to wake up to this global outlook.

The truth is that EVERY economy on this planet is intertwined, and a benefit to the global economy is a benefit to EVERY economy. Further truth is that the global economy is here to stay and that we will continue to enmesh ourselves with other economies until they are indistinguishable from each other. A true world without borders, perhaps.

To resist this by “buying American” without regard to the actual value exchanged reflects very narrow thinking that we cannot afford to perpetuate.

We solo-preneurs are out here doing this stuff on our own. We don’t have government subsidies to bail us out when the going gets rough. What we do creates jobs and economic motion, without which the economy would truly stagnate.

So my highest moral obligation is to fulfill the purpose I set for myself, which fortunately (and not coincidentally) benefits a lot of other people in the process, regardless of their nationality.

I support Sterling, Jay, and all others who embrace the global mindset.

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Mandi

I’ll admit I was completely appalled at the idea of outsourcing until I understood it the way Jay describes in the post.

Another perspective: I also believe in helping others help themselves. The US gave $91 million in aid to the Philippines last year according to USAID. Providing a high-paying job to someone in this country helps reduce the aid they require. It helps them help themselves.

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My thoughts on this issue: It is bad that so many people are currently unemployed, BUT this is not necessarily a bad thing, it is an opportunity! A few years back, I was desperately searching for a job, and when I found that no one could offer me one, I said “**uk it, I’ll start my own business!”. I had no other choice but to succeed, and I did. I think (and hope) that many of those people will do the same. It is a global economy, and we should think globally. I know for sure most Americans can find a job or start their own, if not in the US, then in other countries (as translators, representatives in US/Canada, etc.). I know it’s hard (heck, it’s very hard), but that’s the way life is. I know people who moved to Japan, Thailand, New Zealand and are very happy there, working jobs they could not dream of having in UK or US.

In the end, it’s a matter of perspective: If you see unemployment as a problem, then so be it, but if you see an opportunity to move on, your mind will start looking for solutions and eventually, you’ll find one.

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What the people who disagree with this practice don’t realize is that:

1. It’s been going on for CENTURIES. Not years or decades, centuries. This country was built on it.

2. Capitalism does not work without cheap labor, period.

Who built the railroads in the 1800′s? Almost exclusively the Chinese. Who built and worked in the steel and auto mills during the industrial revolution in the 1900′s? European immigrants. Why? Because they worked cheap, the US had what amounted to an ‘open door’ policy for laborers, and it freed up American workers to move up to management and create better, stronger businesses. If you go back and look at all the great architectural achievements of the ancient world (The Great Wall, the Pyramids, Rome) all of them were built with cheap, imported labor. How is this different?

We recently went on a volunteer vacation to Thailand for a biology project and to help with rebuilding efforts from the Tsunami of 2005. When we arrived the all Thais wanted was for us to teach them English. We thought we were there for rebuilding. They laughed and pointed to a shanty town just outside of the village. In it were over 100 Malaysians brought in to provide cheap labor for the rebuilding effort. A week later a tiny boat full of Bangladeshis crashed ashore. They were starving, sick, and looking for work. Did the Thais turn them away in a show of misplaced patriotism? Nope, they handed them a hammer and paycheck.

You can’t create new products, new strategies, and better businesses while swinging a hammer (or in this case ‘hammering out code’). And you have an obligation to your business, your customers, and your shareholders to do that in cheapest, most efficient way possible. THAT’S the American way.

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You can see average and max salary figures for a programmer in the Philippines here.

At the time that I did the search, the salary range for a programmer fresh out of school was 8800 to 13,500 Philippine Pesos. That translates to $180 to $280 USD. We pay our guy $500 USD.

I feel great about the wage we pay him.

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Hi Jason,

You say that outsourcing your development creates an environment where people are learning how to create businesses, and that those businesses will create domestic jobs. However, this is disingenuous, since they are learning to create Internet-based businesses like yours that outsource jobs overseas.

Of course you have a responsibility to the US. Your business is based in the US. Your LLC exists because the people of the US, through their elected representatives, created a system where your LLC can exist in the first place. Other listeners overseas have similar responsibilities to their homelands. Is your responsibility to only hire American workers? Of course not. There is no such legal requirement. I’m sure you meet 100% of your responsibilities according to the letter of the law. But is it possible that you might have a personal responsibility outside of legal requirements?

Sure, from the point of view of the business owner, an American worker is too expensive. Paying an American cuts into the bottom line and reduces profit. But from the point of view of the American worker, he can’t compete on price. The cost of living is simply too high. You may say that that his problem, not the business owner’s.

So how does the system that the worker’s representatives put in place work for him? Consider the inverse. If lawmakers forced business owners to either pay overseas workers according to American labor laws, or fined them for every job outsourced overseas, to level the playing field for the worker, the business owner would say he can’t stay competitive. Wouldn’t it be equally within the worker’s rights to say that’s not his problem, it’s the business owner’s.

You see, it’s not such a simple right vs. wrong issue. It’s an issue of competing interests. Whose interests should be served and to what degree?

Obviously, this is very complex topic, and consensus will never be reached in the blogs, let alone in the world. I would just say, at least own what you advocate (like Kriss B does above). The economic inequalities between the US and the Philippines creates an exploitable economic opportunity. If you are willing to exploit it, you can make money. There’s nothing illegal about it, but whether or not it’s “wrong” I think is something each person has to wrestle with and figure out for themselves.

- Dave

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My arguments are not can you get it done cheaper. Clearly as is demonstrated in the comments you can. In skimming the responses what I see most is “its happening all over the world, get with it.” Or “its happened countless times in history that’s how America was built.” Or even, “this job wouldn’t exist except for us.”

Chavez, Hussein, and even Hitler would have loved it.

Just because you were ordered to do so, doesn’t mean you must. Just because you can, doesn’t mean you must. That’s the moral imperative. Just because I can eat meat, doesn’t mean I must. Just because I can buy the biggest house in the neighborhood, doesn’t mean I must. Just because I can traffic in human misery, doesn’t mean I must.

Some may have misunderstood my original comments as anger. Nope, sadness really.

My MBA helps me clearly understand the x’s and o’s in what many of you use as defenses for hiring workers from abroad. Your business must survive, and I get that. Its those who clearly skipped the class on personal responsibility and integrity that I take umbrage.

Its not jingoism or misplaced patriotism. Its macro economy reality. You owe more to society than simply feathering your own nest. The driver of overseas placement of jobs is not about survival of your business, its about your need to feel power and see your bank account grow. You are emboldened by the line, “everyone else is doing it.”

You might find it surprising that I support doing away with minimum wage. And I find most of the paperwork surrounding hiring in this country is foolish and outrageous. I’m doubtful you understand the genesis of those rules. It was employers who cut corners in order to fatten their own pockets at the expense of people. Employers who took advantage of their power position to take advantage of others. Heck, that’s where unionism got its start.

Justification is a powerful human emotion. It has powered the genocides in Germany, Africa, and China. What has generated such rage on this post is the need to justify our actions.

Selfishness becomes few. My final suggestion on the topic is this, and some will take it as protectionism or a love it or leave it comment.

Doing business in any country, at any time, means taking its resources and converting them to your own. Whether those resources are natural resources, minerals, or human labor, is not important. When you export work, you are converting the resources one of one country into another. You have added to the market imbalance, and markets hate imbalance. They must regress to the mean.

My suggestion in this case is take your business to where the labor is at a price you want to pay. Don’t convert the resources and contribute to imbalance. Help the market and the world.

Move your business. I dare say few, if any, on this blog will do that.

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Kriss B.

Ray, you’re the only here with rage. Invoking the names of ‘Chavez, Hussein, and even Hitler’ undermines your argument not justifies it. Those men were xenophobic, protectionist, socialists. Which argument here sounds more xenophobic, protectionist, and socialist? Didn’t those men redistribute wealth and imprison capitalists because they thought society ‘owed them’ something?

I’m absolutely shocked you have an MBA. Because the rest of us who just have Macroeconomics 101 learned that the demand-supply economy means that those with excess capacity end up supplying the demand. China had excess mfg capacity, now they make everything because they can make it cheaper.

So why don’t you put your lifestyle where your mouth is Ray and throw out everything that has ‘Made in China’ on it, or live in a home that only American citizens built? Guess where you’d be then?

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@Ray,

When you export work, you are converting the resources one of one country into another. You have added to the market imbalance, and markets hate imbalance. They must regress to the mean.

We’ll have to agree to disagree on the finer points of economics.

Your business must survive, and I get that. Its those who clearly skipped the class on personal responsibility and integrity that I take umbrage.

“Personal responsibility and integrity” are the measuring sticks by which I evaluate every one of my business actions. It has nothing to do with an “everyone is doing it” argument.

@Dave,

You say that outsourcing your development creates an environment where people are learning how to create businesses, and that those businesses will create domestic jobs. However, this is disingenuous, since they are learning to create Internet-based businesses like yours that outsource jobs overseas.

First, I didn’t claim that it created domestic jobs. I claimed that it created small businesses. These businesses earn money that is spent and taxed upon in each of the individual’s homelands.

I see nothing disingenuous in my argument that this helps the economy whether in each individual homeland or in a global sense.

Your argument that it simply creates an outsourcing loop seems incomplete when evaluating economic impact. It ignores the creation and flow of value and money.

But is it possible that you might have a personal responsibility outside of legal requirements?

Absolutely! Even more than the law of the land, I follow the dictates of my conscience. But the expression of personal responsibility when it comes to one’s neighbor/country/locale is a personal matter to be defined by each individual.

@Matt,

It is not really “outsourcing” if you did not have full time employees in your company whose jobs you took away. The term “outsourcing” is emotionally charged because it usually means a whole swath of people lost their jobs. From listening to the podcast that these two guys do I know that they did have take US worker’s jobs away – they just created brand new jobs in another country. The only way this is “outsourcing” is that they personally no longer do that work.

You may be right that the word “outsourcing” has a bad connotation and is not the best word in this case. That’s a good point.

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First, I didn’t claim that it created domestic jobs. I claimed that it created small businesses. These businesses earn money that is spent and taxed upon in each of the individual’s homelands.

I see nothing disingenuous in my argument that this helps the economy whether in each individual homeland or in a global sense.

Thanks for the clarification, and I withdraw my previous use of the word “disingenuous” in that light.

Absolutely! Even more than the law of the land, I follow the dictates of my conscience. But the expression of personal responsibility when it comes to one’s neighbor/country/locale is a personal matter to be defined by each individual.

On this we agree 100%. In fact, this is my conclusion. It’s not to say that outsourcing is wrong, or that it’s right. It’s a complex issue that doesn’t have a single clear result. There are certainly positives and negatives from varying points of view like anything else.

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What is really great is that we are having a healthy debate and Sterling & Jay haven’t just side-stepped the issue or brushed it under the carpet as it were. Everyone has to live with their own conscience and I personally like to keep an entirely open mind about the whole issue.

@Ray – Yes – When you export work, you are converting the resources one of one country into another. When you holiday abroad you do the same – should you always take vacations at home? Surely that is what living in a global economy means. Money and value doesn’t just stop at borders?

@Matt – I did previously have full time employees who I let go but they are not unemployed – I am please to say they have all gone on to other jobs where they fit better into the value stream. I still fully agree with you that the term “outsourcing” is emotionally charged but for different reasons – I think it has become synonymous with “exploitation” which is an entirely different issue. I would stop giving some of my design & development work to overseas freelancers from any country if I believed I was exploiting them in any way.

@Jay – So totally agree the word “outsourcing” is not the best word in this case – how about the word partnership instead? See the “partnership model” instead of the “dominator model”. (Ref: http://www.rianeeisler.com/partnership.htm)- I would say that the more generous salary you are paying of $500 indicates it is carefully thought through and far more about partnership than dominator.

Anyhow big thanks to Sterling & Jay for raising this and sharing this. I am sure that this debate will not be resolved this decade but glad it is being debated.

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It is in my opinion that people view the world as the country they live in, the state they live in, the city and even the neighborhood.

What they fail to realize in this instance is that the world is Global Economy. You can see that on the news right this very moment when our economy swings another country’s also swings.

We are interrelated. So by helping another citizen in another country get a well paying job and they in turn provide a great service to you. You are in fact helping two economies. You are able to make a living doing what you’re doing. The outsourced person is able to make a living doing what they’re doing.

AND you both spend money into your local economy by purchasing new computers, groceries, gas, cell phones (like the new 3Gs), etc.

I think that if one were to look closely at their beliefs they’d see that they are living in a “scarcity” mentality. Which can do more harm than good for one’s own economy.

just my ramblings…

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Troy A

A few quick comments-especially for Ray’s comment.

First of all, your MBA doesn’t exactly qualify you as an expert on x’s & o’s. A lot of us have MBAs, and most of us know classmates that didn’t do the work, didn’t have the capacity to run a business, and, in this case are not experts in labor and macroeconomics. However, I must say I liked the word ‘umbrage’ though. Good stuff.

But even with our affinity of cool words, I am compelled to address some of your comments.

1. Using emotional connection with genocide is a weak attempt at rebuttal. Please stick to the issues. As the warden said in the movie Cool Hand Luke, some men you just can’t reach.

2. Partnering with other employees or businesses is simply good business & has given competitive advantages to nearly all businesses globally. It is a way of doing business and empowers companies, both domestically and internationally. Your argument about using the country’s resources is specious at best when looking at the big picture- the one you are trying to align your arguments to.

3. Market imbalance? Last checked, countries import steel to make auto parts, we import/export ag products for use as finished goods and raw materials to make other products, probably over 80% of the products you use. These articles are made in nearly every country on the planet. You can boil your water down at the river if you want & pick up sticks from the forest to start a fire for your heat, but some of us choose not to. Market imbalance? come on, now.

4. Your solution poses morality by going out of business if a business can’t hire people in their own country. Well, they are probably from other countries, too. After all, what is an American. What is freedom? Going out of business for your ideology doesn’t make a lot of sense. Using examples such as Hitler, Chavez, etc doesn’t really touch the issue you speak of. It does show that you might want to address what is going on in this country today though. I think you should protest the current Washington Administration since it is showing many similar traits to those people you mentioned. You can get some out of domestic programmers to help you make your protest signs. Hey, win-win !!!

5. I will avoid the arguments of your flawed economic thoughts, as well as how we can connect the inefficiencies of companies to the profligacy of our U.S. government -overinflation, government not being help responsible by the media and its citizens. This would be a better forum for your premises.

Finally, I would highly recommend you return to the online university that you got your 6 week MBA from and request a full refund.

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Leslie Nicole

This is a toughie! I have to admit I see both sides of the argument. As someone who is a freelance graphic designer by profession, I have to say that outsourcing has hurt our profession in the USA. I think that there are valid points to made against outsourcing and there is no need to vilify Mr. Massie. He brings up some good points.

The reality though is that this is what happens. Jobs change. I know a woman who borrowed $10,000 back in the late ’80s to buy a machine that output the type that graphic designers used to paste up manually on layout boards. Not long after she bought this machine, Desktop Publishing took off and everyone did their own typesetting on the computer. Her profession was finished and the machine not good for much but lawn sculpture.

It’s a good and a bad thing that graphic design has moved into the hands of the masses and that people think that anyone who bought the Adobe Creative Suite and took a 1 week seminar are now graphic designers. Graphic Design is has complex skills like typography that take a long time to learn well. But, it’s also tremendously empowered the individual person to do things they couldn’t before.

I moved to France a year ago. If I hadn’t, I probably would have lost the job I had at the marketing company I worked for. With the US economy, they were obliged to lay off a lot of people.

For me, as much as I loved working in graphic design, I’m just not willing to do service work anymore AND I can’t compete with the young people willing to do it so cheap. (Both abroad and at home.) I want to create my own business using the incredible opportunities of the internet and yes, I’ll probably outsource. So in a sense, outsourcing allows me to continue my work.

Still, a thing can be both good and bad. There are dichotomies and it’s good to explore those issues. I have to admit I hadn’t really thought about the moral implications of what the 4 Hour Work Week might mean. Good discussion.

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For those of you whining about how wrong outsourcing is…

You are obviously here for a reason, you want to start, or already have started an online business.

Now you either do everything on your own right now, or aren’t really big enough to worry about having someone else do things for you..

Now when the time comes that you need to have someone help you out with the business because of the amount of work load, or you just realize how much more you could be making when there is someone helping you out with the workload, then you will stop you whining.

Why? Because you will realize how paying in country is in most cases impossible and will make your business fail, which will cause you to start outsourcing.

If you are against outsourcing then YOU = FAIL

:)

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It is a great topic and I can understand why someone being fired and living in the US might feel bad about you encouraging people to outsource the countries where they pay is cheaper. However I do wholeheartedly agree with you on all points and I feel sorry for the people that would rather blame others for the situation that they are in than take personal responsibility. You are the maker of your life and you are the only one that will ever mind your business. Instead of blame look deep into yourself, be honest and start taking care of you instead of spending time on finding out whose fault it is.

/Mikael

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Unfortunately, nearly everyone who grew up in American culture has been encouraged to think like a central planner, and overlook the extreme economic and moral ills of such a viewpoint. We constantly see politically minded others interpret the economic landscape in terms of foreign and domestic “policies,” which are essentially governmental mandates that force people in the marketplace allegedly in a better direction. Yet the nature of economics, as Austrian economist Ludwig von Mises noted ( http://mises.org ), stems from individuals making their own choices based on their own personal contexts in order to fulfill their own desires. Adam Smith covered this ground a few centuries ago too.

While the question posed above doesn’t presume governmental control of the economy, this remains an enormous factor. Government is the only organization that can coercively alter (with impunity) the nature of people’s individual achievements and voluntary interactions. Thus, government is quintessentially bad for any economy, and it makes this whole discussion about trading with others elsewhere (or not) a non-issue.

Do you have any idea what government has done to our money? ( http://mises.org/money.asp ) Does anyone here realize that our present medium of exchange, the fiat currency known as the U.S. dollar, has lost about 97% of its original value (and might be heading for hyperinflation)? Do you think that is bad for the economy? Do you think that is irresponsible? Do you think that hurts people working in America (and elsewhere)? (The same could be said for the Philippine peso, btw.) Additionally, the various exchange rates for American and foreign fiat currencies reflect what happens to monies controlled by those calling themselves “government.”

Or, if that in itself isn’t enough economic badness and irresponsibility for you, how about the untold financial drain of taxation, regulation, and “public property” on the economy? Anyone care to calculate the amount of business and wealth that has been throttled and outright prevented–and thus the amount of people who have suffered and died as a consequence?

Extortion, racketeering, coercion, and theft, are the main methods of governmental operation. By what standard, by what right, and by what code do you think those in government are given a pass (or cheered) on their monumental forms of immorality and injustice, and yet the managerial decisions of two businessmen hiring people in a different geographical area are called into ethical question? Ray, you should be ostracized for advocating violence against peaceful individuals. If anyone “owes” anything to “society,” it is to refrain from initiating force. Period.

A free economy consists of individuals making choices in the marketplace and interacting with other individuals in a consensual fashion. Agreed upon exchange for mutual advantage is the essence of doing business (absent fraud).

Of course, business owners must do a cost/benefit analysis to determine what will best satisfy their own desires. And those desires will be best satisfied from a business standpoint when they are aligned with the demands of those in the marketplace. Whether they choose to forgo some net income in order to increase the income of those they are contracting with (or vice versa) is up to them. How much money they spend on advertising, on research and development, on cultivating better customer satisfaction and loyalty, on other business ventures, on personal goods and luxuries, on charities, etc., is also their own decision. Ultimately, the competitive (and cooperative) pressures of the worldwide marketplace will favor or disfavor various decisions accordingly. Globalization, in line with stateless capitalism, will gradually be the rising tide that lifts all boats.
Globalisation is Good – Johan Norberg
http://video.google.com/videoplay?docid=5633239795464137680

Notice I said stateless capitalism. Today business takes place in the tyrannical political context of governmental intervention (statism). Not only are individuals and their property highly disrespected by those calling themselves government, but many in the populace seek to use the guns of government (via laws and statutes) to make others behave in particular ways. This is the primary evil of our times, and it stems from growing up in an environment that seldom honored your own mind and life and stifled your intrinsic ability to make good choices for yourself.

W

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Leslie Nicole

That’s an interesting rant, Wes but I’m not with you completely that all government is evil. Do we really want to return to the days of child labour and sweat houses where people work 12 hour days, 7 days a week? While I think there are economic realities to consider, I’m not completely in favor of an everyone for himself capitalism either.

At least that was what I was getting from your words, perhaps I misunderstood you?

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wow! this turned into a big conversation.

Everything seems to have already been said, but I do have to add a few small, niggling comments:

1) it’s really hard for me to take anyone seriously who calls themselves as a “die hard capitalist” yet doesn’t want to accept the the free market. Ray, you’ve been beaten up on here, but I’d certainly re-think how you label yourself. Per definition, capitalism is all about free-markets…

2) I imagine that the if we talking about the production of consumer goods, the conversation would be a bit differently. I’m curious about the purchasing habits of those who disagree with this “outsourcing”. I wonder if they make a point to “buy American” or if they simply shop for the best price.

3)glad to see I’m not the only expat and business school grad her who disagrees with Ray.

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@Leslie

The initiation of force is evil, because it prevents persons from making their own choices and destroys their capacity to flourish. Government initiates force, by definition. Therefore…

You might want to check out that film I linked to about globalization. Child labor and sweat houses are always guaranteed when societies remain undeveloped–and corrupt politics oftentimes leaves them undeveloped.

A stateless society is one in which individuals decide to treat each other with respect, i.e., to interact voluntarily and honor property rights. If someone’s rights are infringed upon, the proven perp will always be obligated to restore the victim.

With government, however, such simple justice is absent; for example, theft is legitimized and called “taxation,” ostensibly for provision of unsolicited “services.” Unjust behavior that’s prohibited to businesspersons is permitted to those in government (State-created corporations are another matter). Again, this is where entire economies suffer greatly at the hands of highly irresponsible “officials” who cloak themselves in flags and false rhetoric (the “common good,” “general welfare,” “the sake of the children,” etc.). Keep in mind that whatever those in government do, they do with expropriated funds and hence take no responsibility and incur no risks, unlike businesspersons.

So, if you’re not for “for yourself capitalism,” what exactly are you for? Are you for or against respecting the freedom of others to make their own choices (so long as they don’t harm others)? What part of your life do you want someone else to govern? What part of other people’s lives would you like to govern? And why should individuals be sacrificed to other individuals calling themselves government?

W

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ted

I have come full swing on this issue. For awhile I boycotted Nike and was pissed when I learned that the actors (the child ones, who did an amazing job) were paid crappy wages (as is defined by American standards). The truth is, those were probably great jobs and gave them opportunities they never had before. How much is an opportunity worth? I am in my mid 20′s. I am an independent trader and am a partner in 2 businesses. Before I got to that point I struggled. Basically living in my car and eating ramen noodles. I remember some nights sleeping on the El or spending the weekend in the office dodging the cleaning staff. The jobs I were doing did not pay me crap, I have a college education and a good resume, so I could have gotten a “real” job. In fact I did, for a year. In my immature mind I felt like my employer took advantage of me. In some way he did, but in addition to the money I recieved “experience”.

I said all that to say this, I recieved money but most inmortantly I recieved experience. I realize not everyone is in the position where they can take experience over money but hopefully I will not have to be in that situation too many more times.

My businesses are mildly successful but I make most of my money trading. Trading to me is a the best job, I don’t have any customers or employees and I can make my own hours and make or lose as much as I want.

At first I felt guilty a little, because, to my own admission I provide a service that provides nothing for the good of human. What I do provide is tax money and I do donate money. Is it better to donate 100 hours or 10k dollars to a charity? If you think you should donate 100 hours then maybe outsourcing is bad but I believe it is most effecient in my case to donate money.

By doing well yourself, you are doing well for America. Keep up the good work, all you solo-prenuers. It is about survial of the fittest. The end does not always justify the means but live your life how you always imagined it.

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@Wes, you say: “A free economy consists of individuals making choices in the marketplace and interacting with other individuals in a consensual fashion. Agreed upon exchange for mutual advantage is the essence of doing business (absent fraud).”

However, this is not the way our economy works at all. Most entrepreneurs would shutter at the prospect of engaging in the marketplace as an individual. Can you imagine how Henry Ford would have felt about making automobiles if he were personally liable for the safety of every one of his customers?

Individuals and corporate entities (non-individuals) co-exist and interact all the time. If it weren’t for government, corporations wouldn’t and couldn’t exist. They are a legalized fiction that is for the betterment of society. In the US, legislatures are comprised of elected representatives of the citizenry. It is We the People that allow corporations to exist via laws enacted by our freely elected government. Thus, without government, the business of America would crumble.

Both the biggest benefit and drawback to corporations: they aren’t real people.

As a result corporations can’t have a conscience. The officers of a corporation are obliged to do everything legally possible to maximize profits for shareholders. But we’ve seen what happens when that where the line ends – mistreatment of workers, child labor problems, defective or dangerous products – lots of horrible, horrible abuses that fall outside of the categorization of fraud. The system cannot regulate itself, because this paradigm is built into it – a corporation has no conscience and the people running it (who presumably have a conscience) have no liability.

Since government regulation creates the rules that allow corporations to exist, there is no other way possible to ensure that corporations are acting for the best possible benefit of the people. Again, it the people who allow corporations to exist via laws enacted by their representatives.

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I’m all for keeping jobs domestic, but customers are not concerned with what a business owner’s costs are. They are concerned with keeping as much of their own money in pocket. I think that you can “in-source” some things domestically, but outsourcing is getting a bad rap.

Outsourcing isn’t new, the technology has just made it more accessible to the solopreneur. You don’t dry clean your own clothes or pick your own corn and bake it down into tasty little flakes. You don’t fly to an foreign nation, grab a shovel and dig up oil to fly back and put in your car. We outsource all of these things. It’s all perception.

The economy is changing. It’s resetting. We went from an agricultural economy to an industrial one. Now we are going from a industrial/manufacturing economy to an information economy. Labor has to retrain for the needs of the economy instead trying to force the economy to buy labor they no longer need.

I talk about all of this in my new book Stop Working In 30 Days. I’m showing business to save jobs here, lose the office space. I’m coaching businesses and creating a whole system so that businesses can be profitable by focusing on what they do and becoming a master at finding others to do the rest.

I wish the economy would allow business as usual, but those days are over. Business can’t afford not to use skills that Jay, Sterling and myself teach. It’s just no longer financially viable.

Mack B.
Author
Stop Working In 30 Days
http://www.stopworkingin30days.com

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Leslie Nicole

Wes, I really don’t want to get into what I can see becoming an endless back and forth. I just don’t have time for this right now and I’m sure I’ll never convince you of my beliefs.

Personally, I feel statements like “A stateless society is one in which individuals decide to treat each other with respect….. ” is incredibly naive if not just a warm fuzzy way to justify an anarchist, everyone for themselves mentality.

I’m somewhere in the middle of extremist ideologies. I feel we should have freedoms but I also feel we have responsibilities for the good of the whole. Government is not perfect and we should always question and prod, but it is the system we have in place to try to live in a civilized fashion.

I like Dave Kawalec’s post.

Personally, coming from a low-income family, I was lucky to be a teen-ager in the 70′s when the government had a lot of good programs. I had summer jobs funded by CETA. This gave community programs assistance and gave challenging interesting jobs to students. One of the jobs I had was working at the county council on alcoholism. I did a number of office tasks for them, but while I worked there as a young girl of 16, I also designed a logo that they still use a variation of today and I also drew a calendar for children of alcoholics that was published. I went on to become a graphic designer and this council helped the community.

I will never agree that all government is bad.

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Troy A

Ah yes, govt is protecting us from these evil corporations. Our money goes to great programs. People that are successful should give back to…

blah blah blah. The media has obviously not done its job & can be to blame for the million articulate yet ignorant (with Dave & Leslie, a million & 2) not seeing the truth. Let’s put it as simple as possible for you guys.

When you steal from Peter to pay Paul, you can always count on the support of Paul. By being a Paul, you are being a Dick. Don’t be a Dick!!!

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@ Dave

You’re right: Without government, corporations wouldn’t exist either. Amen.

I spent some time clarifying the issues about this in Complete Liberty:
http://completeliberty.com/chapter4.php#80

Corporations are part of the problem of statism, of course. Contrary to conservative belief, they do not contribute to the betterment of society; you yourself noted a list of their potentially irresponsible behaviors. “We the People” don’t allow them to exist either, unless you’re a politician or a political/legal crony. Additionally, “Freely elected government” is oxymoronic. No matter who gets gets elected, government itself still holds coercive office.

Your conception of the economic landscape sans government and corporations is distorted by your belief in the “necessity” of these illegitimate and unjust institutions. Business, rather than crumbling, would grow by leaps and bounds in a truly free marketplace that upholds justice. There are numerous books on this topic, btw, many of which can be found at http://mises.org .

It all gets back to individuals (and groups of consenting individuals) making their own choices in the marketplace–and taking responsibility for those choices. Your hypothetical about Henry Ford’s misgivings concerning the liability to his customers drops the legal context. Any businessperson operating in a just, free market legal system of customary law principles of restitution and reparations (not rampant irresponsible litigiousness in monopolistic statist courts) will have the discretion to sell products “as is,” so long as informed consent and adequate disclosure are provided. Businesspersons have economic incentives to prevent fraud charges, after all. Reputation ratings companies would also assist in informing potential customers. Freedom works, and it’s moral.

I encourage everyone who understands and embraces the trader principle of capitalism (and even those who don’t!) to peruse the following article by Frederick Mann. He advises that the free enterprise sector is the path to real economic freedom:
http://www.buildfreedom.com/economic/eco_10.html

@ Leslie

So, you believe that living “in a civilized fashion” involves violating the freedoms of rights-respecting individuals? Your middle-of-the-road political position can’t stand logical scrutiny. Either you’re naive about the nature of the evil that you’re promoting, or you’re well-aware of it and don’t care. The “good of the whole” can never be attainted at the expense of the persons and property of which it consists.

Respectful businesspersons should beware slavespeak:
http://www.buildfreedom.com/tl/tl07a.shtml

W

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Outsourcing and job shedding happens in any economy, good or bad. It becomes much more of a hot-button issue during a downturn as a less dynamic economy doesn’t create enough new jobs to offset or override the losses. In the end, survival is the name of the game. Unless we are committing charitable acts, businesses, consumers, and job seekers are looking for their own bottom line, not that of the party they are seeking or offering services to.

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Paul

Ray Massie’s comments come from his heart, but definitely lack an understanding of the relative costs of living in different countries and currencies. That rate for a Phillipino will give a much higher standard of living than the equivalent in USA. It is definitely not slave labor as he implies. That worker would be immensely grateful for that salary. Not realistic to compare two different economies.
I suggest if, hypothetically, Ray moved with a business to live and work in the Phillipines, he would pay the going fair and reasonable Phillipine rates – and not the USA rates, and he would realise that he would not be treating the local workers immorally. He would be totally in line with what is very fair there. There is a grave danger in transposing a USA environment and economy onto Non-USA countries – that is too simplistic and misguided.

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One of the biggest reasons this is such a hot topic is that there are always going to be several valid arguments from each camp. If you’re a business owner, you don’t simply need employees. Instead, it’s vital to the survival of your business that you get people who add value to your organization and help you achieve your business vision. It’s also vital that you can actually afford the people you hire on.

As a prospective employee or contractor, you’re looking for a good fit with an organization on many levels, not least of which is whether your employer will provide you with a living wage and benefits.

And there’s the rub – what constitutes a living wage varies drastically around the world. For small business owners, VAs and outsourcing are a key part of their business strategy since they are affordable, and the amount we pay constitutes a decent wage in their location. This isn’t so much a question of morality as it is a question of whether US small businesses should live or die. I prefer that they live and thrive, and in many cases, this might mean that we spend our precious working capital on foreign workers.

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Mike

Idealism is all very nice but pragmatism is the way to survive. Times have changed and other countries such as the Phillipines and India are getting their turn at the trough. Pragmatists accept this change in world order and work with it. The choice is not domestic vs foreign, the choice is outsource or do it yourself. Doing it yourself means less ability to grow the business, less profit, and less taxes paid to support your country.

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Since I was the beginning cause of this conversation, I think I’ll add a bit.

This is to all naysayers, who think this is “morally wrong”

#1. If I don’t hire someone in the Philippines, I’m not hiring anyone anywhere. It just doesn’t work in my business (either financially or just plain “fit within my business”) to hire someone in the USA). That means no jobs anywhere. Is that better?
Or, maybe I should hire someone in the USA because that contributes to “my society” and just let my business fail?

#2. Haven’t you ever stepped back and looked at it and said, no matter what your current situation was, “I’m richer than 95% of this world!” JUST because you live in the USA.
The unemployment rate in the USA is 8%??
What is it in the Philippines? Or anywhere else in the world? Or, realistically, what is the “under employment” rate?

#3. You are a human being. So am I. So are the people I hire in the Philippines. They’re HUMAN BEINGS who deserve a chance at living a healthy, productive life, just like you and I. Is it their fault they were born in the Philippines where they don’t have the same opportunity as you do in the USA? Maybe it’s morally wrong to be hiring people in the USA when they have sooooo many opportunities to better themselves and people in other countries don’t have those opportunities. Maybe it’s your moral responsibility to help other human beings. Just because they were born in less fortunate circumstances than you, doesn’t mean they don’t deserve the opportunity you got.

#4. You tell me I should let this person go, and hire someone in the USA:
“I am good but whenever my left side waist starts to sting, i mean, there’s a burning feeling there, i cannot concentrate….
My medicine costs almost 7 thousand a month…it’

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@John I knew you would get in on this sooner or later, glad to see you here! :)

@Wes You make some very solid points that I agree with.

Something needs to be understood here. Back when businesses were taking advantage of people and treating them as “labor slaves”, a very bad practice was taking place. What happened? The market worked itself out and corrected the problem by creating unions and other things to hold businesses accountable. Problem solved. Simple enough right? Exactly. The problem came in when government decided to shove its fingers into the already solved issue and take control over it. Now we have a new problem, but we already know what the solution to this is. ;)

Think back in time. Businesses weren’t known by the name that we know of today, yet they existed regardless of the government or economic condition. Businesses are an entity in and of themselves, but have a person behind them (whether a group or individual) who holds certain ideals and motivations. They will run the business as they see fit, and if the market accepts them, they will be able to prosper and continue business. If the market doesn’t accept them (lump greed, slave labor, and whatever other issue in here.), they will crash and burn. Simple enough.

Why do we have to be so selective in determining who we hire as employees/VA’s? That should be the businesses decision, not the outside world period. If they happen to find better quality work and people in another country, they will stretch across the borders to make it happen. The nice side effect is that both businesses and economies in each country will benefit and grow. If they determine to hire in their own country, both businesses will grow, and the economy in one country will grow as well. Care to know of the side effect of this “one country hiring process”? Salary and prices of everything increase. Just a thought to chew on a little.

Here’s another thought, we LIVE IN A GLOBAL ECONOMY NOW. Time to get out of the little shell of thought, and see how this world is changing before you are left drifting and helpless. The ants worked their butt off and were thusly rewarded, the grasshopper sat on his butt and paid the price.

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BobHere

What a waste of a post on a subject that everyone should make there own choices on based on their own beliefs. I take offense to anyone telling me how to run my business or who I should hire. Being Politically Correct does not pay the bills people.

Now as a matter of choice I do not consider hiring/contracting anyone from another country more because of control issues on my part than anything else.

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I’m simply amazed that anyone who is in business would argue on the side of “outsourcing to other countries is immoral”!

The bottom line here is the bottom line. Why in the world is it morally better to hire someone on this plot of land vs. a plot of land 4000 miles away? It’s simply geography, forget about all the nonsense about borders and governments, those are just legal fictions.

I hired someone in the Philippines full time who we pay $550/month. He can do lots of things including programming, design, admin work, and writing. If I were to hire those positions here in the U.S. we’d be talking 5-10 times as much. In other words, I’m hiring the guy overseas or NO ONE AT ALL. There isn’t a choice here. If I hire no one at all, I make less money, therefore, I HURT the U.S. economy because I have less disposable income to spend.

This is such a simple thing, but you have to drop your emotional ties to the American flag and use logic and reason in order to get it.

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If I have a business in California or New York and I decide to build a factory in Kentucky because wages are lower there (and they are), is that immoral? What if I live in Manhattan and I hire people from the Bronx?

Seem to me like the “country” part of this outsourcing debate is completely artificial.

Here is another issue — PI wages are a supply and demand issue. The only way to get PI wages up is for demand to increase thus limiting supply. So, arguably, we have a moral obligation to outsource.

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Last night I was chatting over Skype with our general virtual assistant who lives in the Philippines. Without any solicitation, she shared this.

I'm very blessed to have you as my employers

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Dale Hensel

While I understand the personal feelings that may go with seeing opportunity flee overseas, I am also a strong believer in creating your own opportunity.

I have started and run over 13 different businesses, even taking one of them public, and raising millions.
I have had an all American staff. including, people from India, Ireland, S. Africa, and yes, even the U.S. all us citizens.

I have had a couple of online businesses as well now, and I outsource a lot to the Philippines.

last time I checked they were all human. every last one of them.

They Thank me regularly for employing them. in several places they have an unemployment rate of 50% and underemployment even higher.

The whole point of a business is to buy something, add value, or change markets, and sell at a profit.

if you are an employee, anywhere in the world you are contributing to this cycle. you work, you get paid. your employer then takes what you do or did, and tries to make a profit from it.

so he can continue for another day to pay you.

in business, it is no different. you buy something and sell it. products/services. doesnt really matter. where you do it, is not really as important anymore either.

where is the nation of cyberspace? its boarders?

I have a very strong internal compass that directs me. and it has helped me weather great storms of indecision, or those gray areas.

Here is a measuring stick, one I use. I suggest your own.

I have reached across the street and helped a neighbor to tend his house. I have taken action and help those across town when they needed it. I have offered jobs to people all over my city, when I could, and I have hired people (who are just slightly farther neighbors) off shore, and was able to contribute Greatly to a whole village. by simply providing them an income twice what they would have made otherwise.

I consider it just extending American opportunity to them *(actually Human Opportunity)

When I have received blessings and thanks from people for changing their lives, just by providing them a job, I am humbled.

this is a complex issue, and Im sure your personal backgrounds will deeply color this topic. I am sure you will find your own compass on this topic, as I have found mine.

in short, no flag binds my eyes, in the pursuit of helping others.

Good luck with that.
Dale

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[...] the Internet Business Mastery Podcast Blog, there’s an interesting debate going on, and it involves a little bit of what I do online. [...]



Joseph O

This is very interesting reading to me, this is because this Outsourcing for/against is the topic of a current conference in an online College MAster’s class I am taking.

I have always thought the it is not a straight forward answer- I think it is a highly emotional subject and because someone out there has experienced or know someone who lost a job due to offshore outsourcing hence people are bound to see it from the perspective of being patriotic or not.

However, business are not setup just be patriotic, the goal of business is t make profit and as long as no law is broken there is no qualms.

However, personally, I think there should be a balance, businesses must strike a balance between profit making and consideration of the impact their offshore strategy will have on those they are likely to take away their jobs. Hence it should be done when absoultely necessary. How will it affect bottom line? Is the company is dire problem and must save money in order to survive? These I believe should be some of the questions to ask.

No doubt this is going to be a fiery topic in our country for a long time to come. I love Jay and Sterling’s answers though.

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Matt D

I designed my business to rely on outsourcing. After a few weeks someone made a similar argument to me. “I was sending jobs overseas.”

I wasn’t quite sure which jobs I was sending overseas, because none of the jobs existed a few weeks ago. In fact I had created one new job in the US and it was by far the highest paying one … mine. I pay taxes on what I make, and I continue to pay more and more taxes because my business is successful.

Secondly I don’t understand why people think that economics is a zero sum game. That if I create a job in the Philippines or India that it hurts the US. That makes no sense. Would you advocate that you only buy products made by people in your own town? If everyone did that the whole economy would be worse because no one from another town would buy your products. Borders don’t matter … they are in your head. A job created anywhere is good for everyone everywhere.

Greater productivity per $1 helps everyone everywhere. When I can automate my VA’s job with software, I will, and that will benefit everyone because she will then start working on something that is more productive. Automation is progress … it’s the reason we are not all still farmers. Outsourcing commodity skills is the first step towards automation.

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Did you hire the outsourcing directly or using some site like Odesk?, I have been using rentacoder with some good works and not so good and I want to change to something with more freedom to do the things and work with less stress regarding the end dates.

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@Hector,

We hire directly. The site that we use to search and hire is http://www.GetReplaceMyself.com

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Tom

I personally believe that Outsourcing may be good for an individual company but in the long run it is very bad for the economy as a whole. Sure your company will make more profit due to decreased labour cost but your nation stands to lose.

If you hired a local then the employee would pay income tax and would spend their hard earned money in the local economy.

If the job is outsourced then the employee pays foreign taxes and spends money in their local economy. You are effectively taking money out of our economy in placing it in the foreign one. Unless you do business outside of the country in excess of what you saving by outsourcing then there will be a net loss to the economy. This might be the case for some businesses that outsource but not all of them.

To illustrate this better think of what would happen if EVERY job were outsourced…

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Connie

I know this is late in coming and slightly off-topic, but I just listened to John Jonas’ podcasts again and realized it is so lame for him to say that all he does is play with his kids and play golf all day.

It is so misleading to act as though he doesn’t work at all and it will really give people the wrong idea. It’s impossible in this type of business when you’re trying to brand yourself to do nothing.

I get a newsletter from him once a week … does someone else write that? Did someone from the Phillipines do that long interview with you? Does someone else come up with new product ideas and he has nothing to do with it? No. He is the brains behind is company and he may not work the 40 hour week, but there’s no way he works the zero hour week.

I can’t believe you guys fall for his BS and arrogance! Really, I prefer the more honest approach that you guys have.

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Hi Jay,

I totally agree with how outsourcing keeps entrepreneurs responsible not only to outsource because it saves them costs to pay for the tasks they transfer and to manage all their team’s taxes but it also pertains to how we are able to ensure quality outputs under our guidance. We surely can prevent being totally involved in the business as we target to save more time on other priorities and much important ones although training them and paying attention to staff’s questions, updates can still be of concern.

Additionally, this makes everything a lot easier when we have a program that keeps all the documents, information and accesses through a management system. Nothing to worry at all as well because you have trained them beforehand and now, you’ll just have to sit and see for yourself the good results. It takes a lot of time at the start but once you’ve gathered your team in place, outsourcing stays effective.

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