The 15% Solution

I read today that Oracle’s profits were up 15% for Q2.
Oracle is one of the companies that is “Exporting America”, according to CNN’s Lou Dobbs.
In other words, part of that 15% profit resulted from firing “highly paid” American workers and exporting those jobs overseas.

Mr. Dobbs is doing a great public service – every night, he displays a list of companies that are outsourcing jobs, and he’s promised to add this to his website.
His speakers talk about some of the long-term implications. Some comments and theories are sensible, and others are off-the-wall, like the apologists who say this trend is “healthy” because it “creates jobs” for people like project managers and other pukka sahibs.
But here’s some questions that I haven’t seen answered yet:
– At what point will further reduction in payroll expenses be impossible to achieve? In other words, what happens to the “bottom line” when ALL available jobs are outsourced? What will be the next “quick fix” to increase profitability by 15%?
– What are the security implications of developing software projects without a proper Q/A infrastructure in countries like Russia, China, and the Philippines? Is anyone looking for “back doors”? How is quality being evaluated?
– What are the implications of losing technical skills in our own population? That’s not just programming, it’s engineering, metallurgy, etc. Does that mean we become permanently dependent on other countries to supply this expertise?
– If our “middle class” becomes fodder for the low-paying service industry, what implications does this have for future tax revenues, especially as we notorious “Boomers” reach retirement age? Does this imply a further deterioration of public services, safety nets and public insurance programs like Social Security and Medicare?
– How much of the savings companies claim to have achieved by outsourcing jobs could have been realized with a restructuring of executive pay and perks? In other words, does this trend have less to do with remaining competitive and more to do with simple greed?
– How will the shifting of jobs play in relationship to changes in corporate governance? As shareholders are now insisting that Boards of Directors be more independent and critical of CEO excesses, will there be a similar movement to pressure Boards to stop the outflow of jobs?
What do you think?