Job Exporting: Is There Any End to It?

Called anywhere to get technical support for any kind of computer technical problem you’ve been having lately? Been the recipient of long distance telephone rate offers, lately? If so, have you been under the distinct impression that the person on the other end of the line, was not a US citizen? If you feel this way, you’re most probably right.

But not only are communication-based services being shunted overseas, certain medical scanning procedures are also. More and more service jobs that used to be filled here in the US, are being shunted off to places like India, where the native population has a more or less pretty decent command of the English language.

The reason this is happening isn’t exactly rocket science. Service and manufacturing jobs are being sent outside the US because the cost of labor in places like India and (say) Central America is so much lower than it is in the US. Not to mention the ordinary social overhead involved in things like social security taxes, unemployment taxes, worker’s compensation costs and the like. It makes a lot more sense to pay some child in southeast Asia 25 cents and hour with no benefits than pay minimum wage with benefits to an adult here in the US.

Job outsourcing has some benefits to some people. Those who happen to have investments in businesses moving their operations overseas benefit. Companies which employ overseas labor can show larger domestic US profits on their books because of lower labor costs. So certain companies benefit. Their stock values increase, making money more easily available for expansion. That’s another benefit.

Ordinary Americans (including, presumably those laid off because of outsourcing) are supposed to benefit because of lower prices on foreign made products and services.

Unfortunately all these so-called benefits come at a serious social cost. Look at the textile industry. The bulk of the textile mills that used to employ thousands of workers in places like North Carolina have simply moved to various nations in Central America where men women and yes, children, can be employed at the rate of as little as 25 cents and hour, to make clothing for American markets, with little or no concern for the well-being of foreign workers, or the costs to American workers in the form or large-scale unemployment.

It seems to me that the free traders who push outsourcing have too much of a free hand. My question is: Just where, exactly, will job exportation end?

Outsourcing is going on and will go on, until presumably the that part of the job market that can be relocated overseas, will be relocated; lock, stock and barrel. Unemployed or underemployed American workers will be faced with few options except very low paying domestic personal service jobs which cannot (for whatever reason) be easily sent outside the country. Which means low pay and little or few benefits including health insurance.

Some have tried to show that jobs are disappearing in America because of technical change. But they have not made their case. Take, for example, the case of Honduras, where some textile mills have gone. Can it be that, somehow or another there is some sort of advanced textile technology that somehow or another works better in Honduras than it does in the US?. Technological displacement might sometimes exist, but it hardly explains away the bulk of the problem. The same goes for the telephone and computer and medical imaging services now in use in India. Yes, the Indians produce these services cheaper, but they do not produce these services on technology any more advanced than that available in the US.

Is there something I’m missing here?

It’s not technology that takes away jobs, it’s the bottom line. Those companies who can keep their labor costs low survive, those who cannot , do not. It’s that simple.

Which means that it’s time to review free-trade policies. American workers deserve at least some measure of protection against the outsourcing of their jobs. Free-trade policies are beneficial in the long run, but people have to pay the rent and buy groceries and feed and cloth their children on a daily basis. The “long run” is a just a meaningless abstraction to those faced with the prospect of long-term unemployment (or underemployment) due to outsourcing.

It’s time to demand of companies that are determined to move their operations out of the US, that they be required to pay at least 6 months wages to those who are about to lose their jobs. Workers who are gong to be turned out on the street should be given at least three months warning of any decision to do so by management. And management must not be allowed to make these decisions in secret. Secrecy damages working people who have little to say once a US company decides to leave the country. Working people do not have high-paid lobbyists to protect their interests. Manufacturers and investors do.

Someone’s got to come down hard on the free traders in both parties. It seems to me that there should be some sort of commission appointed to study the long term effects of outsourcing and make some sort of determination whether or not unregulated job exportation is really a good thing.

Punditwalla--