The Issue: Outsourcing
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THE ISSUE Outsourcing is not a new phenomenon. Companies have scoured the globe for cheap labor unions for decades, manufacturing cars in Mexico and shirts in Malaysia. Yet the practice has never threatened U.S. sovereignty to the degree it is today. Outsourcing has ballooned in recent decades, leaving the United States uncompetitive, its citizens jobless and its future bleak. Currently, the most frequently outsourced jobs are those considered Business Process Outsourcing (BPO), which are considered more low-skilled jobs and include claims and transaction processing jobs, settlement work and, of course, call center jobs. This industry is expected to grow 20 percent, to $180 billion, by the year 2010. Knowledge Process Outsourcing jobs, or (KPO), are considered more highly skilled jobs and the market for these outsourced jobs is growing at an even greater pace than BPO jobs. These types of jobs are more knowledge intensive and include equity research work, asset management and engineering. Over the next year this market is expected to grow by 39 percent, to $16.7 billion. The way our markets are structured, it is almost impossible for any business to resist the trend of cutting American industrial jobs and shipping the work overseas. Although American corporations have laid-off millions of American workers in recent years as part of their outsourcing policies, they are not to blame. The real blame lies with the corrupt politicians and foreign trade lobbyists who push their ideals onto the American people through debilitating “free trade” deals. The North American Free Trade Agreement and the World Trade Organization make it impossible for the U.S. to place taxes or tariffs on outsourced work. U.S. businesses search the Earth to find areas where workers are underrepresented and lax environmental rules reign supreme. Since America's competitors engage in outsourcing, it is completely unavoidable for American corporations if they want to remain in business. Individual American corporations must do what they can to survive. Once their competitors start moving jobs overseas, they have no choice but to follow suit. Today even high paying jobs are being outsourced to India including doctors, mathematicians, accountants, financial analysts engineers, biologists, architects, physicists, chemists and programmers.  The typical salary for an American programmer is $70,000 a year, while a programmer in India rakes in a mere $8,000 for the same job. American corporations cannot afford to pay an annual salary that is $62,000 more than their competitors pay their employees. U.S. companies are expected to ship 200,000 jobs a year to India in the near future, in pursuit of these lower wages. While many jobs are shipped overseas in the technology industry, a significant amount of jobs in manufacturing have been outsourced as well. It is uncertain how many service jobs have been outsourced abroad, because U.S. companies are not required to maintain such statistics. However, Boston-based consultancy Forrester estimates that jobs leave the U.S. at a rate of 12,000 to 15,000 per month, according to John McCarthy, the company's director of research. While other estimates believe 20,000 jobs a month may be moving overseas. These numbers are in addition to the 2 million manufacturing jobs that moved offshore from 1983-2000. By 2015, Forrester predicts 3.3 million service jobs will have moved offshore as well. As American jobs flee the country, so are American industries. Entire industries have been transferred overseas; it seems that the only manufacturing that remains in the U.S. is final assembly. However, now even our final assembly is being outsourced to countries like Mexico and China. All America seems to export is our money in order to import finished products. Outsourcing creates a vicious cycle. As more companies outsource work, less jobs are available for Americans and the economy continues to spiral downward. EIC POSITIONOutsourcing has become an epidemic in the U.S. American corporations are forced to outsource their work offshores to remain competitive as our “free trade” market structure makes it impossible for them to resist the trend. The U.S. must provide tax incentives to companies that keep jobs in the U.S. and stop providing tax breaks to those companies that engage in outsourcing. The U.S. must also renegotiate or completely withdraw from the WTO and NAFTA in order to realign the market. WHAT THEY ARE SAYING“The exodus of jobs from our shores and the "race to the bottom" for workers around the world is an obvious result of NAFTA and the WTO, both of which make it impossible to place taxes or tariffs on outsourced work.” "We have to stop providing tax breaks for companies that are shipping jobs overseas and give those tax breaks to companies that are investing here in the United States of America." REFERENCES |
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