Outsourcing & Insourcing: Left of Center View
Downsizing, outsourcing, layoffs, greencards, work visas, whenever the subject of immigration comes up so does the issue of employment and the economy. "They're taking our jobs", comes before, "They're learning in our schools". And to some extent that's true immigrants do make up a significant portion of the American workforce, but they aren't always the one's to blame when an American worker is displaced. American employers are, they are the one's who go out of their way to save money by not hiring American workers.
The readiest example of this is the outsourcing by American industry of thousands of jobs to other, cheaper countries. From call centers in India to the factories of China, American corporations have found a giant loophole that allows them to circumnavigate many of the labor safeguards that can only be enforced by American courts, on American soil. They don't have to pay for employee benefits, they don't even have to pay minimum wage. No overtime and no costly safety laws, sure customer service goes in the toilet, but in the short term it's very profitable, and it's short term profits that pay for the bonuses of America's corporate elite.
Everytime an American service call rings in India, there is one less American worker being paid to answer it and our economy as a whole suffers. While it may be true a a foreign national has taken a position previously held by an American worker, the replacement is not an immigrant. The person answering the phone never left their own country. Someone didn't come into the country and take your job, your job left without you.
So you can't work a deskjob any more, at least you can always get work down at the factory. What the factory closed last summer!?! Now before you start yelling about the damn foreigners take a look at the little American flag stuck in the gill of your Ford truck, well there's at least a 70% chance it's got "made in China" stamped somewhere on it. While you're at it take a look at the truck itself, in 2006 the Ford motor company decided to outsource most of its IT, engineering and components to India and China.
"Sources in the industry are indicating that Ford is likely to increase its purchasing power of components from outside the domestic market by six times. Currently, the company purchases are worth $80 million.
A component maker has said that manufacturing of critical engine and forged cold parts would be outsourced to India while glass components will be outsourced to China."
With the jobs and revenue going overseas from even the most stalwart of American company's, American buying power is way down. It's so bad in fact that Toyota is considering not building any more factories here for a while.
A lot of the immigration debate is a distraction. While the American worker is busy blaming the South American dishwasher making 7.50 an hour, American executives are closing down factories left and right and pocketing the short term savings as "retention incentives" and "performance bonuses". Two things the executives at PG&E got extremely upset about when the bankruptcy judge stopped their multimillion payout. Ken Lay anyone.
Look, the so called Global Free Economy isn't. Other countries offer both incentives and penalties to grow their economies, it's time we started doing both as well. With five to ten percent of its labor source, private contractors included, overseas a business should no longer be able to qualify for government assistance. With thirty-five percent or more of the labor being done overseas a corporation should be considered foreign and taxed heavily for the right to do business in America. All items manufactured overseas should be taxed, regardless of the country of origin of the manufacture. Sure American corporations will continue to attempt to exploit the loopholes, but isn't that what we're accusing illegal immigrants of. So why spend our limited resources and energies pressing them while the real damage goes on unchecked.
The only way to stop the flow of capital and jobs out of the country is to make it more economically feasible to do business in the US as opposed to outside of it. Since incentives and tax breaks obviously don't work, those quickly get converted to executive incentives, it's time to enter the penalty phase, remove all funding and protections from companies moving overseas and increase taxes and tariff to the point that a little plastic flag made in China costs roughly the same amount as one manufactured in Iowa. Maybe then the Canadians will stop worrying about Americans sneaking across the border to get their jobs and health benefits.
Kyle Pesonen - Staff Writer | E-mail Comments on this column.
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