Offshoring: Good for Business, Bad for America

Think about the offshoring issue for too long, with too open a mind, and I promise youll go nuts. This in not a simple issue, no matter how much the bumper stickers, politicians and some corporate CEOs would like it to be.

The nationalistic American viewpoint seems to be that anything—NAFTA, guest worker visas, offshoring—that takes jobs away from native-born U.S. citizens is at the very least unpatriotic and may border on subversion.

The unfettered capitalist view is that free markets work out best for everyone, at least in the end. The corporate ruling class looks at offshoring as a less-expensive way to do business, resulting in some combination of lower costs to customers and higher profits to shareholders.

There are also people who are anti-globalization for any number of reasons and want to resign from global humanity. On the other hand, there are people who look at globalization as a means of sharing the wealth with poor nations. They call that economic justice.

As I said, in this issue you can find pretty much anything you want.

What bugs me about offshoring is how it allows greedy, short-term business interests to have their cake and eat it, too. Having starved the American public education system, these rich fat cats now want to export jobs to “better trained” workers overseas. Sometimes its just less-expensive workers overseas, but often there is at least a hint that there arent enough Americans qualified for the jobs, regardless of price.

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If thats the case, perhaps we should require American businesses to offer, say, 75 percent of the prevailing American wage when hiring overseas. We could send the income and Social Security taxes paid by that worker, collected at U.S. rates, to their home government to support local social programs. The remaining 25 percent would go to the U.S. government to support unemployment and educational programs for Americans.

That, of course, is fantasy. But heres something that isnt: Tax the value of software developed and services provided overseas as the imports they are.

For example, if the testing for Windows Longhorn is done in China, lets figure out what the value of that work is to the total project and then slap an import tax on every copy of Longhorn that Microsoft sells.

This would be easier on coding projects, where you might determine that 25 percent of a program was written overseas, making 25 percent of that products revenue subject to the import duty.

This tax wouldnt be collected just from software publishers but from corporate IT departments as well. The goal would be to make sending U.S. jobs overseas just a little bit more expensive. OK, maybe a lot more expensive.

Next page: The long-term cost to America.

Page Two

Offshoring makes my liberal bleeding heart beat in two directions at once, confusing me, my cardiologist and my readers.

On one level, I support creating more jobs in underdeveloped countries. Economic injustice and underdevelopment was one of the key motivators for World War II as well as the current turmoil in the Arab world. It is in our best interest to spread the wealth, at least enough to keep the peace.

But there is also the fact that the American educational system, perhaps at its strongest when fueled by Cold War fears of Russian scientific and engineering superiority, has been allowed to go to seed. American business leadership didnt stand up for better education because the quarter-to-quarter mentality makes the problem easier to ignore than to solve. Especially when a “solution” (like offshoring) arrives just in the nick of time. But at what long-term cost to America?

My bottom line: Offshoring is unpatriotic and customers should be willing to pay a bit more not to purchase offshored products and services. I also believe that some sort of tax needs to be levied on the value of work done overseas that should been done onshore by American citizens.

Business and government must get serious about supporting scientific and technology education at all levels. There are lots of dimensions to this issue, like funding, daycare, working moms, teacher pay, the role of public schools in social policy and curriculum, just to name a few.

But sending American jobs overseas only works if we can create enough new, high-paid jobs at home and have people with the skills necessary to fill them. Were not doing that and people are upset to see good American jobs sent to places where they can be done supposedly for 25 percent of the wages an American would be paid.

I understand why this is attractive to business. I hope business understands why it is bad for America.

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