[lbo-talk] Roach: Productivity in the New Economy

[Christian Gregory]

> Now, if I'm understanding correctly, Dell's productivity in selling
> computers is the total number of units they move divided by the total
> number of people they employ.  Tech support is part of that equation, no?
> Insofar if you reduce it too far, you move fewer computers.  So if they
> outsource 2000 jobs, aren't they moving the same number of units but
> having it divided by that many fewer people they officially employ?  And
> nationally, that many fewer people that the country employs?

It's true, but GDP subtracts all of the payments to foreign subsidiaries--ie
to the outsourced labor--from income. So, if they moved the same number of
computers but outsourced 2000 service jobs, then all of the payments to
capital, labor, etc. overseas are subtracted from the income due the number
of units they sold, which decreases the measure of output. Moreover, on the
product side, the price paid by the customer in the US for the service is
also deducted from GDP as imports.

Christian