Outsourcing and the lure of Money, money, money / by kevin murray

In comparison to most of the world, the cost of labor is considerably more expensive in America than it is in most countries, especially in countries that are in their developmental phase.  Additionally, although labor unions have been in freefall in America for a number of years, there is still within America, some negotiation strength from unions as well as in general, the American worker has on the whole, more rights in the marketplace, in comparison to most of other workers around the world.  Although the International Monetary Fund ranks the United States as only the tenth highest in the world on a per capita basis, if you were to combine the population of all the countries that sit above the United States in per capita income, their population in aggregate would not even match the United States, meaning that America is in reality, the richest meaningful nation in the world.  Additionally, and most importantly, more than 2/3rd of the countries in the world do not have a per capita income of even half of the United States and many countries are considerably below that number.  This means, in short, that the United States labor costs, by definition, must be and are considerably higher than the majority of the countries in the world.

 

Although, CEOs and CFOs, directors and the like, want to desperately believe that they are the smartest guys in the room, any person with even an elementary level education, can easily tell the difference between a higher number and a lower one.  The fact of the matter is, that labor is a huge component, in most every business in America, and that the reduction of such, especially the reduction of such with little or no lost in skill-set or productivity, is something that most high executives desire.  The reason that high executives desire to put a lid on labor costs is quite obviously so that they will either directly or indirectly benefit when it comes to making budget, competition, quarterly stock numbers, bonuses, options, and salaries.

 

This means that when America makes it a policy not to punish or tax or prevent the outsourcing of jobs from America to foreign countries, you will get exactly the type of benign neglect policy that you might expect, which is that thousands upon thousands of jobs each and every year, are taken from American workers that are qualified and willing to do the work, and instead outsourced to countries that also have workers that are qualified and willing to do the work, with the fundamental difference between them being that the foreign workers are paid considerably less than domestic workers and that the foreign workers get the outsourced work.

 

I suppose those that believe in the invisible hand of entrepreneurship would applaud such a development as being a boon for America and its constituents, but in fact, the basic problem with this type of thinking is that it is more of a case of American companies exploiting cheap labor overseas, while eviscerating domestic labor at home, leaving those that formerly were employed, having to be taken care of by charitable as well as governmental organizations, while the bigwigs at these multi-national corporations reap the lion-share of these additional profits for their own aggrandizement while dragging the flag of our country into the mud of material greed no matter the true cost to its citizens.