Does Outsourcing Create a Social Obligation?

Opinion: At the Information Privacy Forum, former President Bill Clinton says we must help displaced workers find other jobs.

Even with talk of protectionist barriers in retreat, the topic of offshore outsourcing is still potent enough to generate intense interest. During a recent panel discussion in which I participated with former President Bill Clinton, he expressed broad support for global trade, including, in principle, offshore outsourcing.

"Its good for some companies, and, on balance, its good for the world. As to whether its good or bad for America, its fruitless to close the border to trade," Clinton told some 300 attendees recently at The Donnelley Groups fifth annual Information Privacy Forum in Aspen, Colo.

Like Clinton and many others, I dont believe that restraining international trade in products or services is either practical or good for America. After expressing this view to the audience, however, I read some e-mail messages I have received from readers who have been displaced by outsourcing—and I do get mail on the subject. Some of it has the coherence of the Unabombers rants, but theres plenty thats rational—and poignant.

Clinton, consistent with his long-standing political views regarding the less fortunate, said displaced workers ought to be given a hand in finding other work, and he suggested that rolling back tax cuts for the rich might be one way to finance programs to aid in such efforts. As a millionaire thanks to his successful speaking career, Clinton said that he doesnt need tax breaks of the kind the Bush administration has pushed through Congress and that he would be happy to have the government use the money on social programs.

"We need to take care of people who are displaced by outsourcing," Clinton told the audience. "The pain is really concentrated," and there is an "inadequate system" of helping those who are displaced by offshore outsourcing, he said. "We need to share the benefits and responsibilities. We need to get displaced people back into the job market more quickly. We need to create more jobs to replace the ones that are lost."

Clinton said U.S. citizens are not as well off after four-plus years of Republican rule as they were during his administration. "Poverty is going up, and wages are stagnating," he said. "The middle class is sliding. ... You need public policy to address this." Although the statements of an ex-president from a party that does not control the White House or either house of Congress might seem of questionable relevance, that wont be the case if tech-worker displacement continues unabated until the next election. We could see in a couple of years what the ex-presidents wife has to say about it (Sen. Hillary Rodham Clinton was in attendance at the above-mentioned event but didnt speak), should she take it up as an issue in a run for the presidency.

What do I think? I think federal training programs often create needless bureaucracy. However, I do think its a good investment to subsidize tuition at community colleges so displaced workers can learn new skills. Further, I believe some national security issues will arise should trends continue and we become a net importer of programming work.

Take a look at oil. We are a net importer, and, as such, we maintain a Strategic Petroleum Reserve in case of national emergencies—either military or economic. Similarly, I believe a case can be made for a "strategic programming reserve," which would make us self-sufficient in critical programming capabilities and not dependent on work done in foreign countries should international crises arise.

Offshoring does raise issues that arent going away any time soon, and politicians of both parties may find they need to go beyond empty rhetoric and do something.

Out and about

British telecom has signed a five-year, $127 million business process outsourcing contract with Accenture for learning services. The deal covers technical and safety training with regard to switching, data, transmission and network technologies. It also encompasses sales force and management training programs. The deal renews an existing contract and goes hand in hand with a 10-year human resources outsourcing contract signed by BT and Accenture in January.

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