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Playing the Blame Game Over Outsourcing

Playing the Blame Game Over Outsourcing

Forget Finding Fault: Real Answer to Job Losses Is Retraining U.S.




I’m an Outsourcing Outlaw, I admit it. I felt enormous guilt the moment I stepped onto the Singapore Airlines plane a few weeks ago.

There I was, heading for Asia again, as I have dozens of times, and flying on a foreign carrier.

Until the recent upsurge in outsourcing rage in the United States, though, I’d never thought twice about it. The decision to fly Asian carriers such as Singapore, Cathay Pacific, and Japan Airlines seemed sensible choices, not political offenses. They simply offer a better product: better service, better food and, especially, happier crews.

The whole point of consumer choice is to maximize the freedom of choice.

Even in California, many buy French and Australian wines, notwithstanding the quality of the home-grown grape. But if we bought only American, how many additional jobs in Napa Valley would that create?

Take a gander into any California parking lot and it looks as though the Japanese and Germans actually won World War II. But think again: How many American autoworker jobs have been lost because of the popularity of the BMW, Mercedes, Lexus, and Honda?

Technically speaking, “outsourcing,” as defined in the current U.S. presidential debate, is a specific business practice. Firms may import, as it were, part of their work force by contracting jobs to foreign workers. But when those workers remain in their home countries, while employed by a U.S.-based firm, the labor is regarded as “outsourced.”

Looking For Blame

Economically speaking, there is no controversy here. Firms reduce their overhead this way, lower product cost to the consumer and remain competitive. The problem is the politics: When American workers lose jobs farmed out to foreign workers, they scream bloody murder.

And occasionally they even commit it. The most famous example occurred in 1982 in Detroit, home of America’s big three automakers. The city was in deep economic depression. Japanese cars were selling in America like mad.

Gone soft, American carmakers couldn’t compete with the quality and price of a Toyota. Autoworkers were losing jobs by the thousands as American consumers, in effect, “outsourced” their auto labor to Japan. Outside a fast food restaurant that year, a recently laid-off young autoworker and his stepfather beat a 27-year-old man to death with a baseball bat after saying: “It’s because of you little … that we’re out of work.”

The man they killed was of Chinese ethnicity, not Japanese, but no matter. They just wanted someone to blame, and any Asian would do.

That’s what’s happening today in America. We’re starting to blame the world, China and India especially. But “foreigners” who accept work from American firms are just trying to survive, like the rest of us. Instead of blaming “them” for taking away “our” jobs, we in America should be retraining our laid-off workers for better jobs instead of just throwing them to the winds of globalization.

Instead, Congress appears to be going Luddite. It would reduce outsourcing by taxing it, penalizing companies for trying to reduce costs. Over the long run, this will probably kill off at least as many U.S. jobs as outsourcing.

Job Retraining Needed

Our politicians ought to do something to help, starting with job retraining, and in many states the best place for that is the community college system.

But not in California, it seems. Gov. Arnold Schwarzenegger has just returned millions in car taxes (a campaign promise) while cutting millions in state aid to higher education. Truly concerned Californians should endorse their rebate check to their local community college to protest the governor’s shortsightedness. One estimate is that the statewide higher education squeeze has frozen out 175,000 students.

Before too long, China and India will feel their pain, too. Many of those would-be students will angrily vote for Democratic protectionism in November. So will those outsourced workers in America’s South.

Most American politicians won’t bother to tell voters the truth: that China, Japan and Brazil lost more manufacturing jobs between 1995 and 2002 than did the United States; that the low prices of imported goods has kept American consumer prices (and inflation) relatively low this past decade; that foreign workers (in China, in India, anywhere) who have an “outsourced” job from a U.S. firm have some money to buy more exported U.S. goods.

The answer to America’s outsourcing trauma isn’t to be found in brainwashing by our politicians but in retraining and further educating our citizens. Blaming “them” (in Asia or elsewhere) during our outsourcing panic attack is just as dumb as flying an inferior airline when you don’t have to, refusing to sip a foreign wine, or not buying the best car at the best price. Dollar for dollar, it makes no sense. Stop feeling guilty.

Plate is a UCLA professor, former Editorial Page Editor of the Los Angeles Times, and a member of the Pacific Council on International Policy.


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