Tuesday, July 6, 2010

Immigration and Offshoring

So I got called back to work, starting tomorrow. I had a lovely week off, although without pay. That was due to my job being sent to India. Knowing that my last two jobs with this company have been transfered to India, at some point this one probably will go too. I was thinking about the situation we are in. Where I work, the company continues its plan to send as many jobs as possible overseas, where they can hire people cheaper than they can in the US.

Because of this I have seen more people come and go at work than I can name. Turnover is beyond ridiculous. It used to be a management philosophy that if you can keep reliable employees and train them to do different tasks over time, that would be the road to being profitable long term. But that was before execs started celebrating the joys of finding cheaper labor and showering themselves with money like it was confetti, congratulating themselves on the genius of this strategy.

In the facility where I work, the janitors are all Mexican and many of them have outlasted a great many computer techs and customer service agents, which shows some of the current concerns about immigration from Mexico as misplaced. After all Mexicans have been coming here to work on farms and as laborers for the better part of a hundred years.

Looking at it from where I work, it is not the Mexicans who are causing unemployment. It is the American execs who send wave after wave of jobs overseas, laying off wave after wave of American workers at the plant in Colorado. The Mexicans are doing the same janitorial jobs they have done for years.

So when you add up all the decent paying jobs that American execs have shipped to countries like China, India, Brazil, Argentina, Indonesia and so on, there is a far more sinister and devastating effect on us, on the whole economy, than any influx of Mexicans coming here to be farm workers, slaughterhouse workers, janitors, busboys, gardeners, maids and construction laborers.

When these large corporations ship jobs to India, for example, they do not pay any taxes to the US on the money they make over there. So that is one loss of revenue to our economy. The second loss to our economy is that when people lose their jobs to offshoring, many who end up working at some lesser paying job that is not in their field will be paying less in income taxes, so that is a second hit to our economy. Third, offshoring sends ripple effects through the economy. When people have less money to spend, it drives down sales at retail stores, cars, appliances and durable goods, entertainment, contributes to defaults on home loans, car loans and consumer credit cards.

So when you factor all that in, is our economy hurting because Mexicans have come here looking for work? Or is it that executive decisions to "outsource" more has really damaged the American economy?

I think that they Mexicans became a convenient scapegoat. It was easy for corporate spin masters to get their talk radio mouthpieces to gin up the talk about the wave of Mexican immigrants taking our jobs. I don't see that as true. I think it is a classic case of misdirection.

We were sold a bill of goods by the politicians who told these lies about how Chinese people, for example, had all this pent up demand and were eager to buy American goods. But is that what has happened since we signed off on all those free trade agreements?

No, exactly the reverse is true. The Chinese did not have enough income to buy our goods. After our jobs were exported over there, they developed more of a consumer economy, because only after that could they afford to go shopping for more than the bare necessities.

Meanwhile, over here, we have towns and cities that were built around various businesses, and now that those businesses are gone, there are a lot of unemployed people and towns that are having to cut back on basic services people expect from a town, city or county.

So when you are thinking about why our economy is down, and why people have a hard time finding decent paying jobs that utilize their knowledge and skills, don't look at the Mexican janitors as the cause of the problem. Look at the people in the executive suites who are giddy over the fact that they replaced thousands of Americans with thousands of employees in some third world country working for peanuts.

Is the quality of the product or service the same once it is done in some other country? Even the execs will admit that it is not, but they are happy anyway, because the people over there work cheaper, giving them a greater profit margin. I think we could all name some product that we used because it was a good quality and performed well, yet the Americans who made it are now out of work because the product is now made overseas, and we have noticed that the new versions of the product do not last as long or work quite as well. Think about clothing that used to have double stitched seams that now has single stitched seams. Did you ever hear anyone say that they are having a problem with their computer and they would rather speak to someone in India about it?

I don't know if it is possible to get data like this, but consider what it would look like if we could count all the jobs that have been outsourced and offshored and compare that number to the jobs that Mexican immigrants have taken. In that process, we would also have to factor in not just the number of jobs, but the pay ranges of those jobs. So, for example, one janitorial job would not equal in pay one computer tech or programmer job. And certainly, one busboy, gardener or construction laborer job would not equal one machinist job.

So whenever you hear some radio or TV blowhard talking or read some article about how these immigrants are hurting our economy, ask yourself, is this really true? Have Mexican laborers hurt our economy more than corporate execs closing American businesses and sending our jobs overseas?

I think that influxes of immigrants are a far better development than offshoring.

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