John Turner 3
Member
When specialization allowed companies to downsize, focus on their core businesses and hire out their accounting, payroll, HR, and other ancillary activities, they got better services at lower costs, and passed those savings on to the consumer.
If you think things have gotten better, you might want to read this newsletter edition, titled "Shadow Statistics":
http://www.caseyresearch.com/displayArchiveArticleWwnk.php?id=205
Here's the latest:
http://www.caseyresearch.com/displayArchiveArticleWwnk.php?id=208
In short, the US Dollar has lost more than 13% of its value over the last two years, and prices have increased 16% in the same time period. That's an annualized rate of inflation of almost 8%. If you've been getting 3%-4% raises, you've been taking an actual pay cut.
I don't know about you, but I haven't seen any "savings". I've been tracking my expenses, income and budgets to the penny for over 7 years and if it weren't for my own self-imposed cutbacks on expenses, I'd be a lot worse off than I am now.
Re: outsourcing/offshoring. It is up to each worker to manage their own career. Nothing can be taken for granted, every worker must act as if they could be fired at any time on any day. This means living within your means. If you can't cut back your expenses because of family obligations, debt, whatever then you have to increase your means. It is a simple equation, and there's no way around it.
I know it sounds harsh...I was laid off not once but twice in 2001 from two separate companies...I learned my lesson the hard way. Six months net income in the bank, untouchable, monthly expenses no more than 70% of monthly net income, no debt except real estate or student loans, and don't count on any sort of corporate pension or Social Security for retirement. You have to look out for yourself in today's world...you simply cannot take things for granted or relax your vigilance and get complacent.
One issue many people ignore when it comes to offshoring/outsourcing is security. For example, your state DMV might have an offshore data processing contract...that means all of your information is shipped to a foreign country. Do they protect your data? Your identity? How do you know? When your accounting firm, or HR department, ships your personal data overseas to save money, how is it protected? Do you know what happens to your medical data when it goes overseas to be processed? Tax info? It is a scary situation, that's for sure.