Jobs: Insourcing and Outsourcing - America

There has been in recent years an influx of negative publicity for American companies outsourcing some of their job functions to foreign countries. The opponents of this form of outsourcing have been very vocal but little attention has been given to the possible long term benefits of such actions. On the same note, little attention has been given to the number of in sourced companies that provide jobs and revenue to the local economies and how those in sourced jobs are affected by outsourced jobs to foreign countries. In sourced jobs, encouraged by outsourced jobs, will provide local companies more revenue by purchasing materials and equipment for less, locally.

Outsourcing opponents tend to put the short term problems in the forefront of the overseas outsourcing debate. It is expected that there will be stumbling blocks along the way to any form of positive progress. Mark Levinson (April 2004) has said, “Why haven't developing countries benefited from increased openness to trade… Because many countries are now similarly positioned in the international economy--producing apparel, toys, and electronics for export--they must compete feverishly for investment by multinational producers” (One-sided World. The American Prospect, p61, ¶ 6). What he fails to mention is that the number of countries that are capable of supporting “investment by multinational producers”, are relatively small in numbers. Outsourcing tends to favor nations that produce acceptable levels of education and services. This reduces over expansion and provides specific nations with little need to compete for certain types of multi national investments. In his defense, not all developing nations will benefit, especially if they cannot provide investors with adequate resources at reasonable cost.

Many opponents of outsourcing also tend to complain quite a bit about the United States not taking a more active role in assisting less fortunate nations around the world. By allowing companies to outsource production and services they are assisting many less fortunate nations to become more financially stable and less dependent on foreign aid. New jobs being created by outsourcing provides higher paying jobs to those who would otherwise make much less or have no income at all. With more and higher paying jobs in these nations, the governments are provided more avenues for tax collection and at higher rates. This will assist in development and maintenance of basic infrastructure providing better roads, schools, utilities and sanitary functions. This can provide assistance with out resorting to international welfare and incurring international debt that would have to be paid back with in a certain time frame. In many cases, this debt will not be paid because the money collected at the government level seldom, if ever, makes it to the private sector where companies can build more stable income and long term economic growth can occur.

Outsourcing can provide positive return effects in the short and long term. The United States brings in more jobs from foreign companies than it loses to them. In fact, Bruce Bartlett (July 27, 2004) shows us, using information from the Organization for International Investment, that “For the past 15 years, corporations have moved jobs to the United States at a faster rate than jobs have left, for an 82 percent increase in insourced jobs compared to a 23 percent increase in outsourced jobs.” How Outsourcing Creates Jobs for Americans. National Center for Policy Analysis No. 480. In the same source it is noted that, in the same time span, there was a 117 percent increase in manufacturing jobs from in sourced companies compared to a 56 percent loss to outsourced companies. These findings counteract the popular belief that The United States is losing more by outsourcing to companies outside its boarders.

Many might say that foreign companies would pay less than indigenous companies would for workers inside The United States. This assumption has been shown to be incorrect. “Insourced jobs pay 16.5 percent more than the average domestic job, and one-third of them are in the manufacturing sector. These include plants that assemble German and Japanese automobiles and produce pharmaceuticals.” Bruce Bartlett (July 27, 2004) How Outsourcing Creates Jobs for Americans. National Center for Policy Analysis No. 480. Therefore, Workers inside The United States can benefit from in sourced jobs from foreign companies that open shop in The United States.

By utilizing lower cost labor and facilities in other countries soil, companies from The United States can direct more money locally for the research and development of products and services. These companies will still need to conduct consumer research in local areas to maintain a good understanding of what consumers of their products and services want and what demographics they will need to target their promotions. In researching, these companies will need to have development facilities and material close by their target customers so they might rapidly and more cost effectively distribute new ideas to test subjects in target areas.

Other indigenous companies will benefit from cost savings from lower labor spending on foreign soil. Marketing companies will have greater demand put on them to produce more innovations in advertisement methods because more money will be available for larger ad campaigns. Television, news papers and radio stations will benefit financially from increased advertisement revenues and consumers will have more information on what goods and services are available.

There is no doubt that—even though many will benefit—there will be others that do not fair so well at first. There would need to be plans in place to help those workers that are displaced when their jobs are moved to other locations. There have been suggestions of how this can be done in a way that will make transitions a little easier for displaced employees. Here are some ideas that an analyst has come up with that seem to be feasible to accomplish this.

In healthy economies, companies create new jobs — often with higher wages and higher value added to the economy — for most of the people who lose their old ones. Companies can make it easer for their workers to adjust by committing themselves to continual on-the-job learning and retraining programs. Policy makers can assist them by offering tax credits or other incentives for companies that hire and train displaced workers. Generous severance and relocation packages can help as well. (Diana Farrell, 2004, McKinsey Quarterly, Issue 3, p4-5, ¶4)

With some of the short-term issues involved in outsourcing as a result of global economic integration, people have to look at some of the long-term positive results to see the full benefits. Once foreign companies begin to show more sophistication and development, people are sure to see additional jobs open up in America from in sourcing. Foreign companies will eventually need to open facilities in the United States to reduce shipping costs for imported products. This will certainly provide jobs that were not there before. In addition, these companies will benefit from better educated American workers in terms of being more efficient.

Foreign companies in the United States will help produce more income for local companies. These foreign companies will take advantage of resources available to them in their immediate areas. This will increase sales of goods and services for American companies surrounding them. Even if these foreign companies send some of their higher position people to run the facilities in the United States, these people will contribute to the local economies by purchasing living goods and automobiles from local companies. More over, the local ad agencies and local media outlets will benefit from these companies through promotional needs.

After reviewing the long term benefits of outsourcing to foreign nations, we can see that stifling economic globalization might result in poor growth in the future of America and other countries. There are times during progress when you have to take a step back before you can take two steps forward. The world is in a unique position at this point in its history where people can truly make a solid, positive impact for the future of the human race. This can only be achieved if people and governments all work together toward a common goal; progress through unification.

A chance to talk

I am glad to hear that Michael Badnarik is doing well. A couple of days ago, he was hospitalized for what looks to be a heart problem. I have been keeping up with the Libertarian Party for a while now. To see the LP info on Mr. Badnarik you can just go here http://www.lp.org/yourturn/archives/000050.shtml

These guys have been doing a great job considering the size of their party. Though, they are the largest third party in America, they are still way behind in numbers when compared to the Democrats and Republicans.

I would like to talk about this for a moment. I once would primarily vote Republican because they stood for free market, lower taxes and financial freedoms. The more I look into the Republicans and see more and more building of corporatism and a less capitalism. Yes, there is a difference. Some regulation might be needed in some cases to prevent consumers from being railroaded but the Republicans tend to lean toward the rights of corporations more so than the rights of individuals. Basically, living by the alternate golden rule (Who ever has the gold, makes the rules).

The times I have voted for Democrats, it was primarily because of the individual pushing for equal rights for all. People need to have their human and constitutional rights protected and emphasized by those who are elected to do so. But, Democrats tend to select only certain groups to have civil liberties and end up leaving others out in the cold. How can you have “equal” rights if you only give certain rights and privileges to select groups? It just doesn’t make sense. And, the concept of “Robin Hood” economics in a nation known for being giving is a bit much. Why should our government steal from the rich when the rich are willing to give if there is a place to give? Non profit organizations take in a ton of money every year. Imagine if the rich were taxed so much that they could no longer give to those they want to.

Anyway, let me get on with my point. I have always considered myself to be more of a Centrist that anything. However, once I a had a chance to read through the Libertarian website (http://www.lp.org), I found that they were for most of the things I like about Republicans and Democrats. The great thing I found was, they weren’t for all the bad things I didn’t like about the Republicans and Democrats.

I am not the only one that has been converted to the Libertarian Party via their website. I ran across a guy in some political forums that was complaining about the Democratic party, even though he had voted Democrat all his voting life, and just couldn’t bring himself to vote Republican. I pointed him to the LP website. The next day, and ever sense, he was echoed the Libertarian ideas and has been very vocal on the forums against the Democrats.

For me, I have finally found the free market and civil liberties supporting party I had always wanted to find. From my point of view, the Libertarian Party presents all the good things I liked about the others and very few things I disliked about the other two main parties.

I can’t force, nor do I want to, anyone to look into this party. But, I will strongly encourage people to, at least, check them out. You might find something you have been missing.

Dying Education

Education has become a stagnate institution in the US. With stagnation comes boredom. I have worked in the public school system and have had the chance to see what this has done to our children. I was not an educator and I think this gave me a unique opportunity to see things on the inside and still maintain an outsider perspective. Many times, it is easier to find the faults of a system when you can see it first hand and not be caught up in the mix.

I have seen the effects of standardized testing and the changes in teaching structure that has taken place as a result. The structure changes incur stress to a situation that needs to be more relaxed. It is much easier to grasp information in an environment that is more relaxed and made to be interesting than it is if you feel unduly pressured.

Standardized testing has resulted in a teaching method where you simply cannot expect long term retention of the information being processed. The teach and repeat method is one that has been commonly adopted. It sounds good in theory but when watching it unfold from an out side view, you get the feeling that the student is getting frustrated and loosing interest in what is being taught. People learn in different ways and at different speeds and levels.

On the flip side, teachers lose track of their ability to get involved on a more personal level. Teachers must have a personal connection with their students if they are to get through to them. I recall three teachers that stick in my mind more than any others do.

One, Mr. Hodges, was very much into the interests of his students. He maintained a solid structure in his classroom and still found a common ground with his students. Music was that common ground. Odd thing is, he was a physical science teacher. He kept a large collection of a wide range of music in his classroom. That was his attention grabber. It was the first thing everyone noticed at the beginning of the school year. It gave the students a reason to ask him questions. He used the Q&A sessions to explain lessons and show how music and science work together. It was interesting to find that he listened to all the music that he had. He had his personal collection that he brought from home along with “contributed” music from past students. His collection grew every year and all the students loved to be in his class. We got to listen to what ever we wanted on a little radio that he kept in the corner.

Another, Mr. Koupa, (Yeah, that was his real name) teacher that I had was very open minded to a large range of things. He was an English/history teacher. He encouraged his students to think for themselves. He refused to give his opinion on anything but loved to hear everyone else’s. He also had a strong fascination with music. He told us about the time he and some friends of his went to Woodstock. They were in Houston, TX. and they were just going to pack up the “bug” and drive there. They made it just past Pasadena (About 40 miles from their starting point) before the car broke down. They spent three days camping outside the garage waiting for the car to be fixed. Obviously, they never made it to Woodstock. This story was told at the beginning of the school year. It opened up a personal side and gave the students a chance to feel comfortable with him and to open up more to what he had to say. His favorite phrase was “Think about it”. The reason he gave for not sharing his opinion on things was that he didn’t want to influence any of us to what he thought. He wanted us to be free thinkers and to figure out our own opinions and why we had them for ourselves.

The third teacher, Ms. Morris, was a bit different. I’m not sure how the other students viewed her. I saw her a strong person with a great deal respect that was demanded by her personality. She was a very short woman. In fact, this was in middle school and I could look her in the eye when I was sitting at my desk and she was standing straight up in front of me. She also was an English teacher. She took special interest in me. At the time, I was in a bit of a rut. I had a lot of things going on in my life and she either had the time or took the time to notice. My grades were slipping and I was getting to the point that I didn’t do any of my daily work or home work. I just sat in class and drew pictures on my book covers and when I ran out of space there, I started to bring a spiral note book to doodle in. She looked up my records and asked me to stay after class one day. She told me that she had pull my information and had been watching me. She said that I was a very bright young man and she didn’t want to see me toss my life away. She said that I looked bored in class all the time. She was right and that was part of the problem. She made a deal with me. I wouldn’t have to do any home work or daily work in her class for the rest of the year. Wow! That sounded pretty cool. I was in 6^th grade at the time so I was a bit young to catch of to the fact that there just might be a catch. There was. For every assignment that I missed in her class, she wanted me to write a page of a story and I had to turn the stories in by the end of each 6 week grading period. At first, I thought, “is she nuts” but I soon fell into the grove of our agreement. She wouldn’t give me a 100% grade because it was not regular class material that I was doing. She would give me a max of 80% per page based on structure, grammar and spelling. The good thing about this method of resolution is that it gave me chance to open myself up to who I was. The stories were mine. The subjects, characters, settings, spelling….everything! I barely passed her class with a 76 for the year. I have never been that great a spelling and that’s what killed me.

The point of these stories is the impact that personal interaction can have on developing minds. In education, we share information and learn from one another. Teaching methods developed from standardized testing causes that personal interaction to take a back seat in the classroom. Teachers have to concentrate more on shoving information down their students throats than they do on getting to know their students and what makes them tick. In turn, this puts the students in a high stress zone with a feeling that no one is there to help them if they don’t understand what is going on.

I'm still alive!

I just want to say that the last few months have been very difficult times for me. I have been dealing with some personal family issues. Not all is lost though. Things are beginning to calm down a bit now. I hope to become more active in my posts here and in other forums.

I have recently been invited to be a contributor to a new political website. It looks to be a good project and I have hope that it will grow into a much visited site. I am not the host but was one of few people that were requested to be one of the first contributors to the site. It is a politically neutral site with a range of political views and ideas.

People can join the site and post comments (respectfully) to the posts made. To become a contributor, you must gain respect points and have a few referrals from current contributors. The site address is http://www.newestate.org/. It is not yet complete but should be in the coming weeks. It is a very new site and has only a few articles posted now but that will change soon.

I have read things from some of the current contributors in the past and they are all strong thinkers. If you check out the site, keep in mind that people there have varying ideas. If you like what one or some of the people think, you can keep track of them and their posts.

I will be working toward more research and posts once I settle some line issues with my internet connection. I just wanted people to know that I am still alive. I look forward to working on new posts for my blogs here and articles for the forum notes above. It would be nice to get more input from viewers. If you have comments or thoughts about anything you read here or in the New Estate, please feel free to speak up. The only request is that you be tactful and courteous.

Hope to be back up to full speed soon. Talk to ya later.