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6 Practical MATLAB
®
Basics for Engineers
l. Statistical data and economic studies indicate that foreign competition and
outsourcing (from China, India, etc.) are having a growing impact on the U.S.
global economy and will surely affect the job markets in the coming decades.
m. According to the Kaiser Foundation “globalization of manufacturing means that
more manufacturing and service related industries are outsourced.” Obviously,
the reason for outsourcing and moving abroad is not just to nd lower wages and
keep operating costs down, but also to get smart, dedicated workers and in many
cases better infrastructure.
The overseas worker is generally well educated and trained, focused and ef -
cient, and receives generally a lower salary and little or no bene ts.
Why should any employer, anywhere in the world, hire American workers if
other people, just as well educated, are available for half the wages or less?
n. No one knows with precision how many jobs are leaving the United States.
Government estimates are
i. 102,000 in 2003
ii. 143,000 in 2004
Unless someone abolishes the Internet and global economic integration, it will
be hard to stop and reverse this trend.
o. A few words about foreign competition using India as an example. India’s service
industry posted $12.3 billion in export revenues in the year ending 2004, a 30%
rise over the previous year. India’s outsourcing industry employed over 800,000
employees and its growth is estimated to be 30–40% per year. General Electric
and City Group are some of the American corporations that use India’s outsourc-
ing industry. The leading outsourcing companies in India earned as much as
two-thirds of their revenues from U.S. customers (The New York Times, November 4,
2004). Of course, India is not an isolated case. Identical problems are faced by the
U.S. economy from competing countries in all ve continents.
p. According to the Bureau of Labor Statistics, outsourcing is responsible for 1.9% of
layoffs in the United States. Economic experts predict that the ef ciencies due to
outsourcing will create more jobs at better wages than the ones destroyed (Brooks,
2007; Lohr, 2007). Over the years, the H-1 visa that allows a person to work in
the United States for 3 years and be renewed for an additional 3 years has been
used by U.S. companies to recruit the brightest workers from around the world.
The current visa cap (2007) is 65,000, which poses a serious challenge to the U.S.
job market. Meanwhile, the outsourcing market is estimated to be in the order
of $386 billion in 2007 and growing with high-quality talents from eastern and
central Europe like Poland, Hungary, the Czech Republic, and Slovakia with an
estimated outsourcing business of $2 billion in 2007 and an expected growth rate
of 30% by 2010, compared with 25% for the global market (Tagliabue, 2007).
q. The old line of U.S. companies, the last bastion of fully paid employee bene ts are
struggling in the global market, and few can afford to pay 100% of worker’s health
insurance premiums. The number of individual premiums plummeted from 29%
in 2000 to 17% in 2004, and family health coverage premiums paid by private com-
panies dropped from 11% in 2000 to 6% in 2004.
r. Some gures about costs of health bene ts are provided as follows to give some
insight to the magnitude of the problem facing the American manufacturing
and service industries. For example, General Motors (GM), the largest private
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