The Case Against Offshore Outsourcing

by: Zachary T. Brink

How would one feel if they showed up at work and found out that they no longer had a job? You would have to go home, tell your husband or wife that you have been fired because you cost the company too much to employ.  Is that fair to you, someone who has worked there for the majority of his/her career? Most companies that are outsourcing jobs are not thinking about the families that are now left helpless because they have been replaced by someone cheaper.

Companies must not be making enough money these days. Since we have laws that establish a minimum wage to protect American workers, these corporations decided that they would just outsource the work to another country, so that they did not have to worry about those laws and could cut the costs by paying foreigners dirt cheap wages to do the same job. They would rather fire someone who has been developed in the company and trained in every situation of the job for years, just to hire someone who is cheaper to employ. In Outsource Outrage (2005) it states “while America has lost 1 million jobs since 2001, employers have been outsourcing hundreds of thousand of jobs to other countries in order to lower their costs.” Corporate greed is what it should truly be called. There is no excuse for having someone train his or her replacement, that is just cruel and chalice. I believe there should be some sort of severance package involved when employment is terminated for such reasons.

With unemployment rates up, and the minimum wage at a plateau, the quality of life has gone down considerably. Many people have lowered their living standards due to earning a lot less money. Outsourcing overseas has caused thousands of families to re-think their financial abilities due to unexpected job loss. And with the number of jobs missing in America, it has become very hard for a number of them to find something they are good at that covers the expenses. Most American workers that have been victims to this terrible new trend have taken along time to recover, if they have already. The truth is, for every single job opening there are three unemployed workers. So how is it there are still being jobs sent overseas? In 2003 the president promised more jobs from the upcoming tax cut. “The council of Economic Advisers predicted that this alone would give work to 510,000 people by the end of 2003 and an additional million or so in 2004. Never Happened. Total job creation was supposed to average out at 306,000 a month, but only about 30% has been achieved (Zuckerman 2004 p.1). American jobs have truly reached a state of crisis, and can almost surely be blamed on the companies who are continuing to outsource overseas.  Since 2001, an estimated 1 million of the 3 million jobs lost have been sent overseas (Sweeney 2004). Some professions have been hit very hard by this new international outsourcing competition. Most production jobs have been sent to China. “India is becoming the world’s back office” (Zuckerman 2004 p.1). The internet has allowed companies to access a never ending supply of English speaking, educated and highly motivated workers who are happily willing to take these jobs for 10 to 20% of an Americans wages. “Offshoring” is taking over more professions also. Not only are they controlling the majority of the high tech careers (Dell, AT&T, MCI, General Electric, etc.) but they are now climbing up the food chain to jobs like financial analysis, engineering, legal work, design, medical services, and accounting (Zuckerman 2004). This is why of the jobs that were created towards the end of 2003; most were created in more secure job fields.

Many American companies are continually off-shoring jobs as a way to cut costs and compete with other companies. This search around the world for cheap labor has represented at least $19.7 billion in lost U.S. wages in 2003 alone. So you can imagine how much money our economy has lost by now. It makes me wonder if there are going to be any jobs left in the United States when our children graduate from college, and whether or not they will be able to benefit from the expensive degree program they just completed. With all the jobs being sent overseas, they may just end up there as well! The top 10 offshoring companies in America combined have sent a total of 100,000 jobs in 2005 alone (Outsource Outrage 2005). So many companies have jumped on the “band-wagon” that you can very much guarantee that the national minimum wage will not go up for a while. With the number of foreigners working for 10 to 20% less than we do, why would a company want to pay us what we deserve if they can just offshore the position, and get the job done for less. It is surely just robbing the U.S. of jobs. So many companies are now off-shoring that they are no longer just competing internationally, but now with the rest of the world. With that said, you can guarantee that more professions these days will start to diminish before our eyes.

If you have made a phone call to pay a bill recently, you may have had a hard time understanding who is on the other end of the line. Who knows who has access to your birth records, credit card numbers, medical records, police records, and your social security number. Many companies ensure that they would never offshore their own data security operations. I truly doubt they care to ask for our permission to offshore our own personal security information. In one case, some Indian workers were caught trying to extort money from an American company who deals with medical transcriptions. In another, a Pakistani sub-contractor threatened to post private medical records on the Internet from the medical center at U.C.S.F. unless the person who hired her paid her what she was owed (Who’s Reading Your Medical Records? 2005). Your information can and will soon be used for reasons beyond you, and since American privacy laws do not extend over our own borders, it will be hard if not impossible to do anything about it.

Some companies have found ways to outsource within our borders to cut costs as well as supply jobs to our own citizens.  A small company out of Tennessee called Healthcare Management Resources (HMR), who is a hospital business office outsourcing company, has opened up a facility in a small rural area of Tennessee. The president of HMR Dennis Schwartz  says that  “hiring rural Americans can save money, keep costs low, and keep the U.S. economy strong”. Another company named Alpine Access, a call center provider based out of Colorado, has also found their own way around offshore outsourcing. They have created a virtual call center with employees working from home, taking calls over the Internet. This has reduced costs and increased revenue per call offered, per sale, and customer satisfaction has gone way up. Schwartz of HMR say that “every company who’s even thinking of outsourcing abroad should be required to reevaluated their plans and look at rural American options”(Alternatives to Offshore Outsourcing 2004).  So it just goes to show that there are other ways to effectively cut costs other than sending jobs overseas. It just takes some critical thinking from above. Some companies have decided to do this through union representation. This alone gives the choice to workers, whether or not they want to unionize, and how to secure their future by fighting together. This strategy has proven to be single handedly the most effective way to curb outsourcing and secure the workers future and quality of living (What Do We Do About Outsourcing? 2005).

Some companies are outsourcing without taking money away from Americans. Others have followed the leader. Some have fell into bankruptcy because they simply cannot compete. Most companies are not even thinking twice about who is on the other end of the chopping block. They see an opportunity to save money, and they take it. They see someone cheaper to employ, consider them hired! They are not even remotely worried about those of us who have families. They are worried about their own families, and are just completely overwhelmed with the greed of making more money. They say money is the root of all evil. What do you think?

References

What Do We Do About Outsourcing? (2005).  Retrieved  June 10, 2006 from      www.outsourceoutrage.com

Who’s Reading Your Medical Records? (2005) Retrieved June 10, 2006 from www.outsourceoutrage.com

Zuckerman, M.B.  (Feb. 9 2004) The Case of the Missing Jobs.  U.S. News & World Report, Vol.136 Issue 5,  67-68

Sweeney,  J.J. (Mar. 31, 2004) Outsourcing robs U.S. jobs. USA Today 22a

Alternatives to Offshore Outsourcing.  (2004) Leader to Leader, Vol. 2004 Issue 34, 60-61. Hoboken, New Jersey: 
John Wiley and Sons Inc.