Tuesday, March 30, 2004

If outsourcing is good for the US economy, where's the jobs to sustain it?

I am sure that everyone that reads this blog (which I suspect is not all that many anymore) has either heard about outsourcing or experienced it firsthand. It seems to be part of everyday life these days. Just a few minutes ago I read this . It seems that the US Treasury Secretary believes that it is beneficial the economy. He may very well be right...to a point. I can see it very well. Unless the jobs that are being outsourced are replaced with jobs of similar wages, the majority of the populous will be pushed out of the way in favor of the people with money.

How could this possibly happen? Here's an example. Let's say you are the creator of sprockets. You start out as a small business and as the popularity of sprockets grows. As your demand grows, you start hiring more people. At first you simply hire people to make them. As your workforce grows you add managers and marketing to the mix. After that you add custodial etc. Now let's say for a moment that you figure, "I can make more money by shipping my base force out of the US and pay them less" (as one US dollar might be worth two to three times theirs, they would still be paid a decent wage) so you start by shipping the lower part-making aspect overseas and keeping the marketing and custodial for the last part of the assembling. A few of the people that used to be managers of the assembling staff might very well find other jobs within your own company. Then you decide, I don't need this big of a marketing staff, I'll just outsource to another company. That company may or may not necessarily be a US based company.

You're probably trying to figure out my point. Originally when outsourcing first began, it was simply the assemblers that were outsourced. Those people were told, look, there's the computer industry that is still here and kicking, why doing you go there? Well, now even those jobs have been outsourced to countries like India and Russia. Sometimes it really doesn't work to the benefit of the head programmers for a company as they would have to go back through their coding to figure out point by point what they created so that they can tell their programmers overseas "this needs to go there" and so on.

The pitfall of the outsourcing is lost jobs. The upside, the economy's great. The companies that are based in the US are thriving and surviving...but how long can this last when there aren't enough people to buy what they sell? People need real money to afford things like internet access (which customer service for it is generally outsourced) of cable services, cars, etc.

My own job at the museum where I work could be outsourced, but only to a degree. I mainly do reservations, cashiering, ticket-taking at the parking lot and greeting the visitors as they come in the door. Reservations could be outsourced to other companies (some of which may be overseas) but a majority of my position requires direct contact with the visitor in some form. Even direct people service is being replaced to a degree-only it's not outsourced as much as it is replacement by automation. Five to ten years ago it was unheard of to get an e-mailed ticket which you could take directly to the concourse. Now that is standard practice, cutting out about 1/4 of the employee base. Where do those people go?

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