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"Wrong," this guy replied, "Because if the work had cost $200,000 to begin with, my client would never have hired us at all. It only made sense for them to upgrade their inventory control system because the cost was $75,000 and not $200,000."

BS. If an upgrade is needed it is done.

In other words, the net effect on the U.S. labor pool was zero. The client wasn't going to have Americans do the work for $75,000 (because the U.S. market rate for the work was $200,000), he wasn't going to have Americans (or Russians, for that matter) do the work for $200,000 either (because the cost would have been prohibitive).

The net effect was jobs lost in America and gained in Russia.

BS. If an upgrade is needed it is done.

BS. In the case in question, the company spent the $75,000 to upgrade their system because they were able to realize a savings of $125,000 (I'm guessing at these numbers, BTW) in their business with the new system in place. Nobody with an IQ over 40 is going to spend $200,000 for a system upgrade to realize a savings of $125,000.