The political and economic elite tell us that there is not much outsourcing of jobs and retraining will improve the welfare of those that are laid off. In any event, those with good educations, need not worry. Not so. Not so. Not so.
Outsourcing is affecting or will affect almost everyone who works for a living. Skilled as well as unskilled jobs are fleeing overseas. White-collar jobs dealing with computers, art, architecture, business, law, life sciences, management, office work and sales are among those that are vanishing from American life and enhancing life in low-wage countries. Many others will follow in the future. The author presents an estimate of 3.4 million American white-collar jobs lost by 2015.
Who's doing the outsourcing? Solid American companies such as IBM, Hewlett Packard, Bank of America, Capital One and Intel. They claim that outsourcing is inevitable and they must do it in order to compete. Why pay an American programmer $70,000 per year when you can get an Indian programmer for $13,580 per year? One is as good as the other, they say.
Multinational corporations treat workers like commodities. If you need a commodity like cotton, you look for the cheapest price. If you need a commodity like a programmer, you pick the cheapest you can find. Corporations have the gall to get workers to train their foreign replacements before they are fired! This is what is called human relations.
We see how outsourcing is hurting workers. After they lose their jobs, 35% don't find new jobs and 40% locate new jobs that pay significantly less than they made before. Competition, indeed:
"Instead of U.S. companies competing with overseas companies, as we had in the 1980s, it is now U.S. workers who are competing head-to-head with foreign workers."
The situation of workers is bad. So the elite suggest retraining. To which the authors ask, Are you going to make a laid-off 58-year old electrical engineer go to nursing school for 4 years? Training is not the answer, at least not the training that has been provided so far.
Some say better education is the answer. Well look at these numbers:
- Chinese undergraduate engineers per year - 195,354
- American undergraduate engineers per year - 60,914
As a matter of fact, American engineering schools are getting fewer applicants today because young people realize the competition will be tough.
We keep hearing that America is on the verge of the "next big thing," that will produce lots of high-wage jobs. Yes, this is what has kept America at the economic forefront up to now. But no longer. How can we come up with the "next big thing" if our technical people are not the best, and how can they be the best if corporations downgrade them to commodities? Corporations are outsourcing research jobs too. They are engaged in "knowledge transfer" operations with offshore companies.
Multinational corporations don't worry about their employees, only about their bottom line. The authors state that over the long run their bottom line may suffer too. After dealing a knockout blow to the wage-earner, Americans, who previously comprised their best market, will not be able to buy the products of these corporations. The entire economy will suffer because very little manufacturing or R & D will take place here.
The authors make several recommendations to encourage trade policies that support our national interest. Most fall into 2 categories:
- REDUCE POWER OF BUSINESS - Big Business has so much power, that they alone decide what sort of trade agreements we make; introduce labor (our agreement with Jordan does this) and environmental issues. Change the tax structure so that outsourcing is not encouraged, but discouraged. Similarly, restrict H1-B and L-1 visas for technical "guest workers."
- INCREASE POWER OF WORKERS - Workers have no power. At the very least, we must help workers who are displaced with unemployment relief, health care and preparing for another job. We must build institutions to increase the power of workers. We must also change our education system and dwell much more on "learning how to learn."
The authors pull their punches quite a bit. If you read the book, however, you will see that if we continue to allow Big Business to call all the shots without challenge from labor, we will all suffer.
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