What to do about outsourcing.......

[Dover]

DLCer, CEO of Boston Non-Profit to Address Challenge of Outsourcing


BOSTON, July 28 /U.S. Newswire/ -- As part of a Democratic Leadership Council forum, Hilary Pennington, CEO of Jobs for the Future, will propose responses to the challenge of job outsourcing and its impact on the jobs in the 21st century. Her recommendations will address the role of government and the private sector in creating opportunity for American workers by boosting skills and building career ladders to family-sustaining jobs.

The DLC forum, "How a 21st Century Party Can Create 21st Century Jobs," will focus on what the economy of the future will look like, where new jobs will be created, and what policymakers should do to help foster the development of good jobs and prepare Americans for success in these opportunities.

The forum will take place on Wednesday, July 28, 2004, 8:45 a.m.-12:30 p.m., at the Westin Copley Place Hotel, 10 Huntington Avenue, Boston. The event is open to the press.

Pennington will propose actions in four major areas:

-- Ease the pain for workers who lose their jobs due to outsourcing. These changes require an adaptive response. Two important ways to do that are to provide wage insurance and portable health insurance coverage.

-- Provide incentives for dislocated workers to learn skills that prepare them for 21st century jobs. More financial aid in needed that fits the needs of working adults with limited incomes, skills, and time for skill development. More needs to be done to provide incentives for skill development to workers, and expansion of services such as Pell grants.

-- Create public/private partnerships to support the development of career ladders and build them into the infrastructure of the nation's workforce education and training system.

-- Improve the workforce development system. In particular, provide federal funding to support "workforce intermediaries" that achieve career and skill advancement of low-wage workers, meet the needs of employers and incumbent workers, and tie workforce development to economic development at a regional level.

Other forum panelists are Progressive Policy Institute vice president Rob Atkinson, Pennsylvania Gov. Ed Rendell, U.S. Rep. Bob Menendez, Rosabeth Moss Canter of Harvard Business School, AFL-CIO Working for America Institute director Nancy Mills, and Michael Goldstein, co-founder and CEO of Boston's Match Public Charter School. More than 350 people are expected to attend, including DLC elected officials from across the country, top contributors to the DLC, party activists, and members of the national media.

MORE

http://releases.usnewswire.com/GetRelease.asp?id=157-07282004

[punpirate]

1. Hmm...

... what's not mentioned, among other things, is taking away tax incentives for moving jobs offshore, and balancing WTO and other trade agreements to account for the movement of jobs for the purely economic purposes of large corporations.

As long as the DLC promotes trade agreements which hurt the country's workers, they can kiss my ass.

[Veggie Meathead]

2. In my younger days, I used to work for a large conglomerate and had

a pretty decent boss who used to tell me that as you gain experience and become more highly paid,the sword hangs on you all the time.He told me that I should not make his mistakes and should not get used to luxuries because this is what the corporations use to control you.The words he used were "they imprison use you with luxuries and perks".One day, on a friday,he too received his pink slip as he had feared.As a proud man he never let on what had happened.The following monday everyone in my department was saddened to see him go because alone among all the bosses he had decency left in him and he treated his people with respect and kindness.

The reason I bring up this thing is I am getting the feeling that our entire middle class is going to be pinkslipped one way or another because as the leading industrial nation we can be considered the most experienced and so more highly compensated than the rest of the world.To the global corporations,a person from India or China can perform equivalent tasks at a fraction of our costs because they have "imprisoned us in our luxuries" as my old boss used to say.Iam afraid our entire country is going to be pink slipped round the clock, not just on fridays.This started with blue collar jobs, has now moved over to IT and a new wave of job losses are going to hit the medical,legal,accounting,research and other middle level professional work as India and China produce more and more professionals from their excellent universities.

When this group starts talking about training those who have lost their jobs to outsourcing, I have to ask what will we train for?

[Joy Anne]

3. ". . . what will we train for?"

Exactly. All those people who lost their manufacturing jobs and then worked hard to learn IT skills have been made fools of. Despite some layoffs as hospitals merge or are sold to Frist's outfit, nursing is probably the safest retraining bet, at least until the country's so broke we can't afford any health care.

I'm so glad I'm self-employed and can never be laid off.

[Veggie Meathead]

4. I guess one quarter of us will be "manufacturing" burgers,

another quarter will be eating the burgers and the rest will be nurses taking care of those eating these burgers.Retraining indeed!

[umass1993]

6. good one

Americans want to be aristocrats. We have built an oil-based society. We will see if it holds up under continuous fuel price increases.

[library_max]

5. Training isn't going to get it.

When engineering jobs are being outsourced, these 21st Century jobs are going to be flipping burgers and fixing transmissions (jobs that can't be done from a remote location). And we can't build an economy by providing personal services for each other while consuming goods and business services that are exclusively produced abroad.

There's no legal way to prevent corporations from moving manufacturing and remote services jobs overseas. If we make laws restricting American corporations, they'll renounce their American citizenship (some have already, for tax reasons). And we can't just shut our borders to international trade. Even if American consumers would be willing to forego foreign goods, we'd end up weak and backward like Imperial Japan, and it'd be ironic if the latter-day Commodore Perry who forced open our ports was Japanese.

Our only hope is to pull Third World labor conditions up. Use the World Bank, IMF, and WTO (which are largely still our puppets) to enforce trade agreements that guarantee living wage, decent working conditions, and the right to organize worldwide. Because as long as slave labor or wage-slave labor is available anywhere, that's where the jobs are going to go. And meanwhile I can cut your hair and you can mow my lawn, but we can't make an economy out of that. If we wait, the US will crumble as an economic superpower and won't have the clout to lead the world out of the sweatshop.

[umass1993]

7. way to go

You know about Commodore Perry?

this is like the smart people forum or something.
:wow:

[oscar111]

8. Her ideas only ease drop to starve

Nothing there. Let her go home to think some more. Just ideas to train us more, and insurance that will not last forever. Well, india is trainig too, and working for less, always.

BAN ALL OUTSOURCING. Only solution. Plus tarrif walls, plus unionize all globe.

[tritsofme]

10. Smoot-Hawley anyone?

Do you think that maybe, just maybe, the countries we trade with, that our economy depends on, might just, oh, I don't know, get a little upset if we slap up "tariff walls" on them, and maybe they might do something like....retaliate?

Yeah, that's what we need, a good old fashioned trade war, haven't had one of them since...let me think for a second...oh right, the 1930s. Because it worked out so good the last time...

[idlisambar]

13. Wake up, we are already in a trade war...

...even if U.S. policymakers don't acknowledge it. Just look at the 2003 trade figures and you will find that America's net imports of manufacturing goods is $550 billion or over 1/4th of total demand for goods.

More to the point, surely you are aware of the fact that many nations in East Asia have been taking rather extreme measures to ensure that the value of their currencies remains low against the dollar. Is there any doubt that this is designed to give their manufactured goods an advantage in the American marketplace? What is your definition of a trade war if this is not a shot across our bow?

As for Smoot-Hawley, why is it that in the long history of the use of tariffs this is the one example that keeps coming up? First of all, Smoot-Hawley played at most a minor role in the Great Depression -- remember that the speculative bubble had already burst a year before the act went into effect....

http://mirrors.korpios.org/resurgent/SmootHawley.htm

Second, people forget that Smoot-Hawley was an attempt to raise tariffs to the level they had been through most of American history to that time -- America's entire rise to economic prominence was behind a solid wall of tariffs. Up until a few years earlier, tariffs were the primary source of revenue for the federal government, but then in the 1910's the constitution was amended in to allow a federal income tax, thus enabling tariff levels to be lowered. Smoot-Hawley may not have been wise in the context of the time, but this is hardly an argument against the use of tariffs in principle. No economic tool should be applied willy-nilly, but smartly applied tariffs have their place.

[oscar111]

9. to Library:yes we CAN

we can ban outsourcing/// if they move the company overseas, tell them they cannot sell here. Or do anything here. EU must have similar wage problem.. join with EU to boot out co's who outsource.

but you are right about lifting up labor globally as best solution.

[library_max]

12. "Tell them they cannot sell here?"

The only legal way to do that is to tell all foreign companies that they cannot sell here. In other words, close off all foreign trade. That's not going to work out in our favor, even if the American people would stand for it, which they won't. Where, for one thing, would we get our oil? If we think that we can import nothing but oil and export enough miscellaneous stuff to pay for it, we can think again. If they aren't allowed to sell to us, who would buy from us?

[mhr]

11. Typical Pablum BullShit - All Sound And Fury - No Meaningful Impact

These damned talking heads are worthless!

[ramapo]

14. My suggestions

1. Eliminate or at least sharply reduce H1B and L1 visas. Save the technical jobs for citizens. We should not provide experience for non-citizens so they can later help take jobs offshore.

2. Provide tax and other incentives to keep/add jobs onshore.

3. I don't believe you can ban outsourcing. I believe you can make government contracts contingent on using all domestic labor.

That's a start.

[Alleycat]

15. Another Plant Closing in my backyard

http://www.wnep.com/Global/story.asp?S=2125515

The Techneglas plant in Pittston closed Tuesday, leaving hundreds of workers out of a job. Two other plants in Ohio were also closed.
Techneglas began cutting back operations at all its plants in 2000. In 1997, the company employed 3,400 workers. That was reduced to the 1,100 currently on the payroll, of those, 670 worked in Pittston. The company blames the closure on foreign competition and a loss of demand for glass screen televisions. Techneglas is the largest maker of television glass in North America.
One by one workers left the plant in Pittston Tuesday. They said at 9:15 plant officials gathered them around and told them to go home.
"I can't believe it. There's been talk but just to come to work to pick up a paycheck after vacation and the plant's closed!" said Carol O'Boyle of Askam.
"Right now I'm just going to take a couple of days off, then hopefully I'll figure something out. Maybe I'll go back to school, find another job, I don't know," said another worker.
"Everything was basically shut down. They told us to stop loading this, stop working on that," said David Lewis of Wilkes-Barre.
For the past year, many workers worried. The company began a series of layoffs last summer, blaming foreign competition and lack of demand for glass television screens. At the time, officials said they were trying to keep Techneglas running.
"We had a pretty good idea but we were hoping for the best," said Jim Kanarr of Stillwater. "It's been pretty bad, bad attitudes, bad moral," added David Lewis. He has three sons at home. He's glad the company will help employees go back to school or help them find new jobs.
Company Vice President Joe Schaeufele in Ohio said ,"Our employees and management have been working tirelessly to turn this situation around but these efforts have not been successful."
"They don't care at all about us up here," said worker Carol O'Boyle about the statement from management. "We put in our years here. Our body has take its toll. Who's going to hire you at 56? Too young to retire, too old to find another job. What do you do? she asked.
"I was here almost when they brought the first cinder blocks in. Now we see the end," said Jim Whispell of Dupont tearfully. For him, news of the plant closing was crushing. He's worked at the plant for 35 years. "You got people over in Malaysia, they're making the same things we do and they're getting paid $30 a week. How can you compete with that? They tried, the company did try," he said. He has a 12 year old son and wonders what he will do next, how to support his family.
Techneglas employees will get pay and benefits for the next 60 days. The company said they will be eligible for help finding other jobs or schooling.
"There is work out there. Even if you're in your 50's. Don't be discouraged because you're older. Some employers must realize a lot of older workers have a lot of value," said Ralph Edwards of Pittston optimistically.
While the plant is being closed, some workers will stay to complete the shutdown by the end of the year.

[bemildred]

16. How about ....

Let's tax the living shit out of corporations that move
US jobs overseas. If they want to sell it here, let them
provide the jobs here too. All you really need is a confiscatory
tax on US "profits" above a certain ceiling (% of operating revenue);
that will force the revenue back into "expenses", i.e. jobs and benefits to avoid the tax.

Yes, yes, I know, this is all ridiculous.

[library_max]

17. They'll just move the whole company overseas.

A lot of them are doing that anyway for tax purposes.

So what you're talking about is sky-high tariffs. Naturally, there will be retaliatory tariffs. It amounts to cutting off foreign trade, which we frankly can't do without (where would we get our oil, for one thing?).

The only thing we can actually do is to pull up Third World workers to developed world standards - living wage, right to organize, etc. The WTO, IMF, and World Bank are still largely under our thumb, so we still have the clout to get it done. Some nations might opt out, but then they and not we would be the ones out in the cold of restricted international trade. The fun thing is that it's not only our only hope of salvaging our economy and our jobs, it's also the right thing to do for everybody's sake.

[idlisambar]

18. Unfortunately, it's probably not a realistic or effective option

There are several problems with the idea that raising labor and environmental standards will help solve our trade and outsourcing problems.

One, it is not within our power to make it happen -- it is a measure that necessarily requires the participation of other national governments. If these national governments considered it in the interest of the nation to raise their labor standards they would do it on their own. The common refrain is that it is first world hypocrisy to expect third-world nations to deny themselves the same path to development that first-world nations took. Whatever our opinions on the ethics of allowing poor wages and labor standards, that many of us in the first world are genuine idealists looking out for the welfare of workers is irrelevant -- the crucial point is that most third-world governments see it differently, and it is dreaming to think this will change.

The second point is that the economic clout of the United States, including that expressed through the IMF, World Bank, WTO, etc. is limited. A nation that must borrow from its chief economic competitors (China, Japan) to keep its economy running is not operating from a position of strength. It is not that the United States has no clout, but it is on the wane, and far less than would be needed to force changes on sovereign governments who would consider the changes against their interests.

Two, even if there were some agreement on labor and environmental standards, the standards would never be high enough to change the equation in a significant way -- third-world labor would still be cheaper. It might decrease the velocity of movement out of the United States but the overall trend would not change.

Three, the problems with American industry are not fully captured just by the notion that cheap foreign labor is luring producers abroad. While this is a significant factor, it does not explain why the U.S. consistently has trade deficits with nations such as Japan and Germany that generally have higher wages, benefits, and environmental standards than the United States. The competitiveness of American industry is declining on many fronts, so placing our salvation in one false hope that only partially addresses one of these fronts is not wise industrial policy.

[library_max]

19. I'm not saying it's a cure-all.

But a look at the record will show some surprising things that the IMF and WTO and World Bank have been able to ram down the throats of Third World nations. Europe is already basically on board - they have such requirements for all EU member nations. China and others would be tougher nuts to crack, but trying will certainly accomplish more than not trying.

I agree that we need an industrial policy. I still say that pursuit of international labor standards needs to be part of that policy. What alternative would you suggest?

[idlisambar]

26. Understood

Note also that not all third-world nations are equal with respect to economic and political power. It is true that the WB and the IMF have been able to dictate terms to many African, South American, and some of the weaker East Asian countries over the years. But nations like India and especially China are on much stronger footing.

Don't get me wrong, pursuing international environmental and labor standards is a worthy endeavor (for a variety of reasons). It is good to try, and I am not saying some success is out of the question. It is a question of focusing our energies. Short of seeking international agreements, the United States can do some things to get its own house in order.


Some of these include what is in the typical liberal agenda (including Kerry's)...

Publicly funded Universal Healthcare -- not only is it good for its own sake (according to us progressives), it would increase the competitiveness of our manufacturers if the burden of providing health coverage were eased or lifted.

Enforcing our own trade laws -- Putting some teeth into our trade enforcement is critical, dumping has been a serious problem over the years -- damaging the standing of many an industry (the steel industry is an easy example).

Restructure Tax Incentives -- Kerry's plan to get rid of tax incentives for locating businesses offshore is a good step.

Invest in the Education of our People/Workforce -- no explanation necessary.


Some are in line philosophically but a little beyond what most liberals talk about..

Subsidize and Otherwise Aid Industrial Research -- One, boost public funding for new technologies and manufacturing related research. Two, increasing Government-Industry cooperation and inter-business cooperation with respect to creating standards and sharing the burden of research costs.

Regulate to make Business think Long-Term -- Our business leaders face incentives that encourge them to have a very short time horizon. There is a lot to be done here but the key is to create a regulatory environment that rewards good corporate citizenship, for example by penalizing layoffs or reigning in wasteful and exorbitant executive compensation. Again, tax incentives (or other measures)can reward good corporate citizenship. Think carrot and stick.


Finally...

Strategic use of Tariffs and other Barriers -- The tariff is a political pariah to both parties, but this is unfortunate because the tariff has its place, particularly (but not exclusively) in application to the neo-mercantilist nations of East Asia. For example, it is silly to just complain about the practices of the Chinese and Japanese central banks when they gobble up dollars to keep their currencies devalued. This is basically dumping en masse. A good use of tariffs could effectively neutralize whatever measures that these governments engage in, by bringing up the cost of their goods to what would be "market value".

In general, the tariff is a simple and powerful way to neutralize the harmful effects of industrial policies abroad on domestic industry.

[bemildred]

20. You seem confused.

You are saying they will stop doing business here,
they will abandon the US market, is that correct?
Because that is what they will have to do to avoid dealing
with the US tax system, no more US subsidiary of Toyota,
no more WalMarts, they will all move to China.

[library_max]

21. No.

Companies don't have to move to China. They can move to Tahiti or the Caymans or some place much closer and nicer. The point is that they can buy and sell in the US just like any other non-US company and we can't punish them for not hiring US workers unless we punish every non-US company likewise. And punishing non-US companies for being non-US companies is what gets us into trade wars and ends in trade isolation.

[bemildred]

22. You really do not understand.

We tax Toyota just like GM. It has nothing to do with trade
wars. It has nothing to do with punishment. It has nothing to
do with tariffs. It has to do with how much of their revenue
stream they are allowed to take out as "profits". Do US companies
refuse to do business in Germany because of their higher tax
structure? No, they adapt accordingly because they need access
to the market.

Your argument is circular, you start with the assumption that we
are impotent before the multi-nationals, and conclude that we can
do nothing about their policies. That is the reverse of the situation,
they can do nothing without our market, and we have both the right
and the means to protect the viability of our markets if we so
choose. If we coordinate our actions with those of other advanced
markets we can kick their asses for them.

[library_max]

23. So we're going to start punitive, confiscatory taxatation of Toyota

because they employ people who aren't Americans? If we don't do it to Toyota, Daimler Benz, etc., we can't do it to any American company that moves its HQ for tax reasons. Which means we can't do it, right? Toyota, etc. are not going to want to do business here if we engage in punitive, confiscatory taxation because they don't hire 100% American. So how do you write the law to accomplish what you say you're trying to accomplish?

[bemildred]

24. You said that, not me.

I said:

We tax Toyota just like GM. It has nothing to do with trade
wars. It has nothing to do with punishment. It has nothing to
do with tariffs. It has to do with how much of their revenue
stream they are allowed to take out as "profits".

But, suppose they decide not to do business here? What happens?
They sell all their local assets and leave (adios asshole ...)
and someone else addresses the market they no longer want. Do
you think nobody will sell us cars anymore? Businesses have to
have markets. WE are the largest market in the World. We also
have one of the lowest, most generous, and least protective tax
policies in the developed world. Where else are they going to sell
all that crap they sell here?

[library_max]

25. So who said this?

"Let's tax the living shit out of corporations that move
US jobs overseas. If they want to sell it here, let them
provide the jobs here too. All you really need is a confiscatory
tax on US "profits" above a certain ceiling (% of operating revenue);
that will force the revenue back into "expenses", i.e. jobs and benefits to avoid the tax."

That's what I was responding to. Wasn't that from your post? That's what I meant when I referred to punitive, confiscatory taxation. You'd have to include Toyota, for example, among the corporations that you'd "tax the living shit out of," because you can't legally punish companies for having formerly been American companies.

[bemildred]

27. You are the one that characterized it as "punitive".

the confiscatory part only applies to profits above a certain level.

You must be aware that we once had a high progressive tax
system in this country, and that that period is generally
looked back on as a sort of economic golden age? How do you
explain that?

Back then we had high taxes and lots of good jobs for US workers.
Since then we have had lower and lower taxes, fewer and fewer
good jobs, and more and more big paydays for US CEOs. Low and
unprogressive tax structures allow them to make US profits on those
cheap chinese jobs, which is why we here are being screwed now.

[library_max]

28. You know what "punitive" means, right?

When you intend to use "confiscatory" taxes to punish corporations for moving jobs overseas, that's punitive, simply as a matter of definition.

I agree that taxes should be more progressive, but please explain to me how the lack of progressivity in taxes "allows" corporations to move jobs overseas and profit by it. Wouldn't they be able to do the same thing regardless of the progressivity of US taxes?

[bemildred]

29. But I'm not trying to punish them, that is your word.

I'm trying to get them to keep jobs here. Do you care about
punishing good American workers for the benefit of asshole CEOs?

[bemildred]

30. A corporation is not even a person, do you punish rocks and

other inanimate things? What bullshit.

[bemildred]

31. WRT your question:

Do you not see that if they make a large operating profit
by moving US jobs to China, and government then confiscates
most of tha profit, there is then no incentive to move the jobs,
one might then choose instead to have lots of loyal flunkies
here in the US, or even (gasp!) reinvest in growing the business?