A Greater Threat Than Terrorism: Outsourcing The American Economy

[Itsthetruth]

CounterPunch
April 19, 2005

A Greater Threat Than Terrorism
Outsourcing the American Economy
By PAUL CRAIG ROBERTS

Paul Craig Roberts was Assistant Secretary of the Treasury in the Reagan administration. He was Associate Editor of the Wall Street Journal editorial page and Contributing Editor of National Review. He is coauthor of The Tyranny of Good Intentions.

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In what might be an underestimate, a University of California study concludes that 14 million white-collar jobs are vulnerable to being outsourced offshore. These are not only call-center operators, customer service and back-office jobs, but also information technology, accounting, architecture, advanced engineering design, news reporting, stock analysis, and medical and legal services. The authors note that these are the jobs of the American Dream, the jobs of upward mobility that generate the bulk of the tax revenues that fund our education, health, infrastructure, and social security systems.

The loss of these jobs "is fool's gold for companies." Corporate America's short-term mentality, stemming from bonuses tied to quarterly results, is causing US companies to lose not only their best employees-their human capital-but also the consumers who buy their products. Employees displaced by foreigners and left unemployed or in lower paid work have a reduced presence in the consumer market. They provide fewer retirement savings for new investment.

Nothink economists assume that new, better jobs are on the way for displaced Americans, but no economists can identify these jobs. The authors point out that "the track record for the re-employment of displaced US workers is abysmal: "The Department of Labor reports that more than one in three workers who are displaced remains unemployed, and many of those who are lucky enough to find jobs take major pay cuts. Many former manufacturing workers who were displaced a decade ago because of manufacturing that went offshore took training courses and found jobs in the information technology sector. They are now facing the unenviable situation of having their second career disappear overseas."

The result is a lose-lose situation for American employees, American businesses, and the American government. Outsourcing has brought about record unemployment in engineering fields and a major drop in university enrollments in technical and scientific disciplines. Even many of the remaining jobs are being filled by lower paid foreigners brought in on H-1b and L-1 visas. American employees are discharged after being forced to train their foreign replacements.

http://www.counterpunch.org/roberts04192005.html

[notadmblnd]

1. I agree, the corporate greed monsters are the real terrorists

terrorizing this country.

[LongTomH]

2. Outsourcing "The Next Big Thing"

I notice the article made reference to the manufacturing workers, whose jobs went overseas, who found work in IT, and are now losing those jobs to cheaper offshore labor. At every step, we've been told it's OK, we just need to concentrate on "The Next Big Thing." First, the next big thing was Information Technology - which is rapidly being offshored. Now, we're told that The Next Big Thing is Nanotechnology - which is a buzzword for engineering on a scale of less than 100 nanometers.

The bad news is: That's going overseas already! Check out this article: http://www.indiadaily.com/editorial/2176.asp

India and China both are poised to make rapid gains in nanotechnology. A couple of years ago, at a conference on nanotechnology, I mentioned to a young Chinese-American lady that we would probably end up outsourcing nanotechnology development to China (I wasn't thinking of India right then.). The response she gave me was a report on China's nanotechnology programs; they're ready and eager to attract nanotech development from the USA.

I think we should be worried about the national security aspects of this, as well as the jobs lost to the U.S. economy.