Add it up
This outsourcing stuff is exasperating, and there’s a lot out there to be exasperated by.
Among the latest wrinkles: a class on outsourcing rushed together at the Massachusetts Institute of Technology to answer student demand; and more wrongheaded justifications from New York Times weirdo Thomas L. Friedman, who says it’s “inevitable in a networked world that our economy is going to shed certain low-wage, low-prestige jobs.”
Friedman ignores the fact that the whole reason the topic is so explosive right now is that higher-wage, higher-prestige jobs are also heading overseas. Forrester Research, of Cambridge, says the United States can wave goodbye to a minimum of 3.3 million white-collar jobs and $136 billion in wages by 2015. They’re off to their new home in lower-wage countries such as India.
The cover story used to be that low-wage jobs would go overseas and free the newly unemployed for higher-wage jobs. The story now is that as our higher-wage jobs go overseas, it will free all of the newly unemployed folks to take on even better jobs. Nonsense. Does anyone really think all those unemployed low-wage workers climbed the ladder, especially in a nation with about 4 million jobs less than needed for full employment, even far enough to lose their jobs again to outsourcing?
Most defenders of “offshoring” say it will eventually benefit the United States, because it creates markets for our goods. This, too, is nonsense: Foreign workers earning less money than U.S. workers may be buying more U.S. products, but also more products from everywhere else in the world, and with less money, because they have less earning power. The money they spend will go back to companies whose work forces have been outsourced around the world, anyway. And U.S. workers — who had more earning power — will have less money to spend. How does that math work out?
It probably doesn’t, which means it comes from the same math textbook as the argument behind the Bush tax cuts: Giving money to the richest means more business investment.
But where will the investment money go? (Overseas, apparently.) Why hasn’t it meant a surge in U.S. jobs? (Because they’re going overseas.)
Furthermore, how does the effort differ from the failed trickle-down policies of the Reagan years? And why give money to the wealthy when it’s been consumer spending propping up the economy for three years? Especially since the effect of the Bush tax cuts would be the same, as one-time Cambridge magazine Dollars & Sense says, if “instead of cutting taxes, the government spent $1.5 trillion on highways or national defense or schools or, for that matter, if it trimmed $1.5 trillion from the tax liability of low- and middle-income households. All tax cuts become income, are re-spent, and taxed.”
Madness. Nonsense and madness.