Mrs. have been smothered by the cries of

Mrs. have been smothered by the cries of

Mrs. PiccirilloEnglish 10111 March 2004 Outsourcing Our NationAs the 2004 Presidential election draws near, questions pertaining tothe mission to Mars, elusive weapons of mass destruction, and fallaciesconcerning military service swarm around the candidates. However, as manyof us know, a candidate’s campaign lives or dies depending on his plan forthe economy.This year a new economic challenge has arose. All otherissues have been smothered by the cries of nearly two million factory,mill, and information technology workers.

Because of outsourcing, thequestion tipping everyone’s tongue is “Where did my job go?”Also referred to as offshoring, outsourcing is the practice ofsubcontracting manufacturing work to outside and especially foreign or non-union companies. Based on the economic practice of comparative advantage-country X producing a good or service at a lower opportunity cost thancountry Y, United States corporations find cheap labor in countries such asIndia and the Philippines (Buchanan). With belief in President George W.Bush’s repeated promise of job creation fading fast, unemployed workersacross the nation have agreed: The United States government should take anactive role in protecting their jobs from outsourcing.With the creation of technological advances, including new ways toconduct business and trade, a problem has been created. The United Statesis currently consuming more than it is producing in goods and services by amargin of a million dollars a minute (Nash 15).

Fordecades, the world has been a large source of goods and energy for theUnited States; however, international labor has come to be relied upon aswell (Dobbs 40). Through outsourcing, companies have been able to obtainlarge amounts of inexpensive labor at the cost of laying off two millionAmericans. Displacement from outsourcing has affected factory workers mostseverely. In the 60’s and 70’s, “blue collar workers could earn white-collar incomes.

Organized into powerful unions, industrial workers securedregular wage increases and improved benefit packages” (Lindstrom). Now in2004, industrial work has become increasingly outsourced. Beginning in the1980’s, Mexican maquiladoras (mills) were popular because of theiroutsourcing potential. Because a good produced by low wage workers is lessexpensive than a good produced by unionized workers, these imported goodsprevent domestic producers from staying competitive (Nash 15). Evenfurther crippling domestic industries, since the United States liftedquotas on Chinese exports, textile industries have been forced to lay off37,000 workers (Forney 42).

At first only affecting blue collar workers across the nation, thereal spark of the heated political issue is the extreme loss of white-collar jobs as well (Will).The 1990’s was a decade of herding workers tothe field of technology. It was “easy street” for those who could quicklylearn the programmers’ lingo or how to manage corporate computer networks.But for programmers like Vince Kosmac of Orlando, Florida, there was nosalvation in technology. Vince is among thousands of programmers andinformation technology (IT) workers who have lost their jobs to outsourcing(Thottam 31).Though IT services outsourced account for less than 1/20th of onepercent of gross domestic production, this is sure to be a growing trend.Since 2000, United States businesses have spread information technologyjobs to countries like India, China, Ireland, Israel, and the Phillippines(Gongloff).

When calling Dell for quick help on a malfunctioning PC, thecustomer service representative answering all of your questions is mostlikely an outsourced IT worker in Bangalore or New Delhi (Thottam 36).1930’s legislation increased domestic working conditions, wages, andworkers rights for Americans. However, in the 1990’s, the roar for betterconditions for outsourced workers in developing countries challengedcompanies like Disney, Levi Strauss, Liz Clairborne, Mattel, Nike, andReebok (Vogel). Now in 2004, working conditions have improved, but thereis little increase in wages as well. The average salary for a softwareprogrammer in the United States is $66,100. The average salary for anIndian software programmer is $10,000 (Thottam 39). For an Americanproject manager, yearly income is between $13,600-$17,100.

For a Filipinoproject manager, yearly income is roughly $700-1,150 (Gongloff). Thedifferences in salaries are beyond substantial, they are enormous. Butbusinesses barely blink an eye as their profits continue to grow.Many companies are claiming that the mass amount of outsourced laboris due to a “social issue”. “Americans are not interested in low educationfactory jobs,” syndicated columnist George Will argues.

The new defensefor outsourcing is that aliens and foreigners will do jobs that Americanswill not (Dobbs 40). Sean Chou, CIO of Fieldglass, a software technologycompany with 15 developers working in India, says that programmers are tooproud to adapt to other types of work. “Programmers have an ‘I’m too goodfor that’ attitude,” Chou says. Nevertheless, this argument naturallybecomes nonsense at a time when job scarcity drives people to pick up twoor three extra “low education” jobs in order to support their families.For many companies, outsourcing is a decision reached by commonsense.

“Any start-up today, particularly a software company, that does nothave an outsourcing strategy is at a competitive disadvantage,” RobinVason, managing director of Mayfield (a venture-capital firm based in MenloPark, California) asserts. When questioned about their motives foroutsourcing, for many companies the answer is simple: the benefits justcannot be ignored (Thottam 39). Much of the hesitation for creating jobs athome is attributed to soaring healthcare and pension costs (McGinn 32). Ifgiven the choice between union and nonunion workers, businesses immediatelychoose the latter (Thottam 40).

Both arguments of American pride and common sense are nonsense in asociety where job growth is stagnate. Dubbed “Benedict Arnold Companies”by Democratic frontrunner John Kerry, businesses profiting tremendouslyfrom outsourcing do so at the expense of their former workers (Dobbs 40).”Businesses are rolling in cash,” says Mark Zandi of Economy.com, “Butthey’ve yet to step up and expand their hiring” (McGinn 32). Rosen Sharma,as a CEO of Solidcore, a back-up security system company for computers, istorn.

Though an employer of 18 Indian workers, as a father, he has begunto realize the plight of workers displaced by outsourcing. “Where will theentry-level jobs be available when my two-year old daughter graduates fromcollege?” Sharma often wonders (Thottam 26).The millennial policies of tax breaks and investment in corporationsfavor the wealthy. Today’s policies are actually a revival of PresidentRonald Reagan’s economic theories for the 1980’s. The trickle down theory,which he promoted, states that reducing taxes and allowing businesses togrow heedlessly in their profits will encourage businesses to invest athome.

Proponents of this theory believe that when the government helpscompanies, they will produce more, therefore, hire more people and giveraises. The people, in turn, will have more money to spend in the economy(“Trickle Down Trade”). In theory, the trickle-down theory is ingenious;in practice, the trickle-down theory is “nonsense.” In a new study by theFederal Reserve Bank of New York, the deficits left behind from the trickle-down policies reveal that the costs outweighed the meager benefits(Zuckermann). Privileges lavished on the rich, never quite trickled down,funneling profits into the top 1/100th of the population. CNN ProducerRonni Berke asserts that globalization is driving “a deeper wedge betweenrich and poor countries.

” Furthermore, the wedge between rich and poorAmericans is growing as well.It is necessary to acknowledge that the United States is unlike mostother countries in that a large portion of Americans have the privilege toexperience a moderately comfortable lifestyle. Supporters of outsourcingmaintain that the typical American lifestyle has been sustained, despitethe move from high paying job to lower paying job, or no job at all.Nevertheless, this statement is only held true by the increasing number oftwo wage households across the nation. It has become more a necessity thana choice for both spouses to enter the workforce in today’s homes(Zuckermann).

Another common rebuttal from outsourcing companies is that this shiftto outsourcing is like previous radical job shifts in history–forinstance, the movement from the farm to the factory in the early 20thcentury. The economy did not suffer when automobiles caused an end to jobssuch as blacksmiths and buggy makers, outsourcers argue. However, at thatpoint in time, there were jobs available. Now in 2004, the shift is goingfrom having jobs to not having jobs (McGinn 31).

Outsourcers say that likeprevious economic shifts, in the long run, jobs will be created andeveryone will benefit. But like famous economist John Maynard Keynes said,”In the long run, we’re all dead.”The Great Depression proved that individual initiative is not alwayseffective. We once again need to focus not on corporations but on workers(Zuckermann).

Recent proposed solutions are as vague as activelydiscouraging companies from outsourcing, or as specific as substantial taxinitiatives for countries that keep their work domestic. PresidentialDemocratic frontrunner John Kerry says that he would discourage outsourcingfederal contracts, but does not tell how he would be successful in hisdiscouraging (Tumulty 30). The restriction of outsourcing services thattravel via broadband and fiber-optic cable is more difficult. Requiringforeign call centers to identify their location when answering calls is theonly current proposition to limit the outsourcing of IT workers (McGinn33).

Robert Reich, former Secretary of Labor and professor of economicpolicy at Brandeis University, warned that though outsourcing may bebeneficial, “we do have to get serious about job retraining, lifetimelearning, extended unemployment insurance and wage insurance. We may alsowant to not permit companies to deduct the expense of outsourcing fromtheir income taxes and use the savings to help workers who lost jobs”(Thottam 36). Retraining, though ineffective, seems to be the onlysolution supporters of outsourcing are offering. A 2001 Labor Departmentaudit discovered that only one in five who participated in programs fordisplaced workers found jobs for which they had been retrained; almost 40%were forced to work part time or less than they worked before, and 28%still could not find employment (Tumulty 30).Nonetheless, solutions for the increased unemployment rate due tooutsourcing have yet to be acknowledged, much less endorsed by the UnitedStates government. Stories like that of Vince Kosmac, and other factory,mill, and IT workers become more numerous as our nation continues towards afuture of dependence and greed. The economic reasoning of “it’ll be okayin the long run” is not relevant in a nation where the selfishness ofbusinesses will contribute to a collapse of the middle class.

Despite thespouting of revived philosophies, the wealth will not trickle down. Toactively create an economy fair for all and not only those at the top ofthe food chain, the government must step in and create legislation limitingoverseas outsourcing. Beyond pride, Americans want the opportunity tosupport themselves and their families. Until they are able to do so, thewhispered questioning of hardworking people across the nation grows morelike a roar as more people ask each other: “Where did my job actually go?”