OpEd: The Outsourcing Debate, or lack of one
The current silence in the media today regarding outsourcing is horrifying. A sound and reasoned debate is desperately needed, and tragically short. The only voice in the media is entirely one-sided and not at all useful. The fallacy of this debate as proposed by Corporate America is that it’s somehow good for America. This proposal rests on three premises that are essentially false.
The first premise is that there are insufficient professionals – engineers and scientists – to supply American business demands. American universities do not graduate enough math and science majors to supply corporate interests. Thus, corporations must look overseas for their supply of professionals. If one understands the nature of capitalism, anytime there is a supply shortage demand increases and costs escalate. What is not generally understood is that this is good for America. By increasing salaries, more students are likely to study math and science to guaranty their future career success. However, by outsourcing companies have managed to subvert capitalism by acquiring their personnel overseas at a fraction of the cost. By doing this, they manage to drive down the costs of professional salaries to those commensurate with the third world, where professionals do not have nearly the same education costs as those in the U.S. Further, by driving down professional salaries corporations have reduced the likelihood that prospective students would go to the trouble of studying key subject areas – if there is no reward in doing so, they are not likely to do it. This further reduces the amount of students studying math and science, which is the basis of the argument.
The second premise is that by outsourcing corporations claim that they are able to reduce costs and pass those savings on to the consumer in the form of low cost products – thus pushing that money into the economy. This proposition is actually laughable. By firing three million workers this is somehow good because now those people could buy cheaper products, if they had jobs. Further, the rest of us who managed to maintain employment are now given the privilege of paying more for services – for providing healthcare for those now uninsured, for sustaining higher taxes or a higher debt burden as a result of a lower tax base, or for providing city services for those not able to pay.
Finally, corporate leadership claims that by outsourcing profits are maintained and American interests are somehow served. This argument rests on the notion that American business is somehow intrinsically American because it originated in the U.S. or serves the U.S. consumer. This, however, is not necessarily the case. Many “U.S.” corporations now register in the Caribbean islands – to reduce their tax liability. They produce their products, if they produce a product, in overseas markets in So. East Asia or Latin America. And, with outsourcing, any professional services required to design and package a product or service is additionally accomplished overseas. Given these conditions, what could be said about a “U.S.” corporation that makes it more American than a foreign corporation that sells products in the U.S?
The sociological terminology associated with this situation is “the tragedy of the commons” – where increasing numbers of users attempt to gain an unfair advantage at the expense of the system that sustains them. Unfortunately, more and more companies are taking advantage of their American association in order to reap the rewards of the American consumer market. At the same time, fewer and fewer companies are concerned with contributing to the economy they so clearly benefit from. If there is no penalty in non-contribution, this kind of behavior will only get worse. In the end, what is to happen when none of them are willing to contribute?