Psychology of Outsourcing

Chuck writes about outsourcing and jobs.

Here's a great article by Virginia Postrel, pointing out how the "outsourcing" problem is supported by faulty numbers and an inability to record new independent contractor type jobs.

I agree with all the economic arguments of comparative advantage, but we ought to also address the psychological as well. I used to consult for PG&E, a gigantic company plagued with union rules and unhappy, but protectionist employees. Some employees would purposefully make their jobs ten times more difficult than they needed to be, ignore technological advances, and refuse to train others simply to maintain their own importance. This cult of protectionism within the company severely damaged their ability to provide electricity and uphold contracts to current and new customers. It is one reason they were succeptible to bankrupty. My father said to me it sounded like fundamentally a management problem, which I think is true, but when the sentiment amongst a certain generation is that the company owes to them a job and a living because they've devoted their lives to that company, it's tough to stay competitive.

As for candidates cowtowing to protectionist job folks - a bunch of wusses. They know the long term benefits and are too afraid to say to a group of factory workers - get off your ass and learn a new trade. Why people think they are entitled to any job is beyond me. You earn it, you create a temporary business relationship between parties that dissolves when it is no longer necessary. Save your money for a rainy day.