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What Is Outsourcing?

Once upon a time in America, virtually anyone with a high school education and the willingness to work hard could get a good job.  Fifty years ago a “good job” would enable someone to own a home, buy a car, take a couple of vacations a year and retire with a decent pension.  Unfortunately, those days are long gone.  Every single year the number of “good jobs” in the United States actually shrinks even as our population continues to grow.  Where in the world did all of those good jobs go?  Economists toss around terms such as “outsourcing” and “offshoring” to describe what is happening, but most ordinary Americans don’t really grasp what those terms mean.  So what is outsourcing?  Well, it essentially means sending work somewhere else.  In the context of this article I will be using those terms to describe the thousands of manufacturing facilities and the millions of jobs that have been sent overseas.  Over the past several decades, the U.S. economy has become increasingly merged into the emerging “one world economy”.  Thanks to the WTO, NAFTA and a whole host of other “free trade” agreements, the internationalist dream of a truly “global marketplace” is closer than ever before.

But for American workers, a “global marketplace” is really bad news.  In the United States, businesses are subject to a vast array of very complex laws, rules and regulations that make it very difficult to operate in this country.  That makes it very tempting for corporations to simply move out of the U.S. in order to avoid all of the hassle.

In addition, the United States now has the highest corporate tax rate in the entire world.  This also provides great motivation for corporations to move operations outside of the country.

The biggest thing affecting American workers, however, is the fact that labor has now become a global commodity.  U.S. workers have now been merged into a global labor pool.  Americans must now directly compete for jobs with hundreds of millions of desperate people willing to work for slave labor wages on the other side of the globe.

So exactly how is an American worker supposed to compete with a highly motivated person on the other side of the planet that makes $1.50 an hour with essentially no benefits?

Just think about it.

If you were a big global corporation, would you want to hire American workers which would cost you 10 or 20 times more after everything is factored in?

It doesn’t take a rocket scientist to figure out why millions of jobs have been leaving the United States.

Corporations love to make more money.  Many of them will not hesitate for an instant to pay slave labor wages if they can get away with it.  The bottom line for most corporations is to maximize shareholder wealth.

Slowly but surely the number of good jobs in the United States is shrinking and those jobs are being sent to places where labor is cheaper.

According to the U.S. Commerce Department, U.S. multinational corporations added 2.4 million new jobs overseas during the first decade of this century.  But during that same time frame U.S. multinational corporations cut a total of 2.9 million jobs inside the United States.

So where are all of our jobs going?

They are going to places like China.

The United States has lost an average of 50,000 manufacturing jobs per month since China joined the World Trade Organization in 2001.

In addition, over 40,000 manufacturing facilities in the United States have been closed permanently during the past decade.

What do you think is eventually going to happen if the U.S. economy continues to bleed jobs and factories so badly?

As the U.S. has faltered, China has become an absolute economic powerhouse.

Ten years ago, the U.S. economy was three times as large as the Chinese economy.  At the turn of the century the United States accounted for well over 20 percent of global GDP and China accounted for significantly less than 10 percent of global GDP.  But since that time our share of global GDP has been steadily declining and China’s share has been steadily rising.

According to the IMF, China will pass the United States and will become the largest economy in the world in 2016.

Should we all celebrate when that happens?

Should we all chant “We’re Number 2″?

Our economy is falling to pieces and the competition for the few remaining good jobs has become super intense.

The average American family is having a really tough time right now.  Only 45.4% of Americans had a job during 2010.  The last time the employment level was that low was back in 1983.

Not only that, only 66.8% of American men had a job last year.  That was the lowest level that has ever been recorded in all of U.S. history.

Just think about that.

33.2% of American men do not have jobs.

And that figure is going to continue to rise unless something is done about these economic trends.

Today, there are 10% fewer “middle class jobs” in the United States than there were a decade ago.  Tens of millions of Americans have been forced to take “whatever they can get”.  A lot of very hard working people are basically working for peanuts at this point.  In fact, half of all American workers now earn $505 or less per week.

Things have gotten so bad that tens of thousands of people showed up for the National Hiring Day that McDonald’s just held.  With the economy such a mess, flipping burgers or welcoming people to Wal-Mart are jobs that suddenly don’t look so bad.

Right now America is rapidly losing high paying jobs and they are being replaced by low paying jobs.  According to a recent report from the National Employment Law Project, higher wage industries accounted for 40 percent of the job losses over the past 12 months but only 14 percent of the job growth.  Lower wage industries accounted for just 23 percent of the job losses over the past 12 months and a whopping 49 percent of the job growth.

Thanks to the emerging one world economy, the U.S. is “transitioning” from a manufacturing economy to a service economy.

But it certainly doesn’t help that China is using every trick in the book to steal our industries.  China openly subsidizes domestic industries, they brazenly steal technology and they manipulate currency rates.

A recent article on Economy In Crisis described how the Chinese paper industry has been able to grow by threefold over the past decade while the U.S. paper industry has fallen apart….

From 2002 to 2009, the Chinese government poured $33.1 billion into what should be an unproductive industry. But, with the help of government subsidies, China was able to ride export-driven growth to become the world’s leading producer of paper products.

In the same time frame that China pumped $33 billion into its paper industry, U.S. employment in the industry fell 29 percent, from 557,000 workers to just 398,000.

So why should we be concerned about all of this?

Well, just open up your eyes.  As I have written about previously, our formerly great cities are being transformed into post-apocalyptic hellholes.

In a comment to a recent article, Trucker Mark described what he has seen happen to the “rust belt” over the past several decades….

I am a product of Detroit’s northwest suburbs and the Cleveland, OH area, where together I lived almost 2/3rds of my 54 years. As a 30-year semi driver, I am intimately familiar with large areas of the industrial Midwest, the Northeast, and even much of central and southern California, and everything in-between. I am also college-educated, in Urban Planning and Economics. What has happened to not just Detroit, but to virtually every city in the southern half of Lower Michigan and northern Ohio is mind-boggling. When I was 18, it was quite common to head over to a car plant and get hired immediately into a middle-class job. At one time I had dozens of friends from school working at car plants, dozens more in other large factories, dozens more in major grocery warehousing and distribution, and me, I was a semi driver delivering to all of those places. Between 1979, when I started driving semis, and now, I must have seen 10s of thousands of factories across just the southern Great Lakes region close their doors. Some of them were small, and some of them employed 10,000 workers or more.

The former Packard plant from your photo closed in 1957, and at one time it employed 12,000 workers, and my roommate in 1982 in Birmingham, MI had been laid-off from the old Dodge Main plant in Hamtramck, which once employed over 20,000 workers, which closed in 1981. In 1970 just Chrysler had over 40 plants in the Detroit-area, and now there are just 11 left open. The Willow Run plant, which at one time turned-out a brand-new B-29 bomber every 40 minutes, and employed 50,000 workers, is long dead too, as is the tank plant north of town too. Even fairly new car plants like Novi Assembly are closed, Pontiac’s ultra-modern robotic car assembly plant too. In Cleveland 100 or more huge old plants stand empty, car plants, steel mills, and machine tool builders, in Akron dozens of rubber plants are long gone, Sharon, Warren, and Youngstown have all lost huge numbers of industrial jobs, Canton and Massillon too, where the NFL started, have been reduced to mere shells of their former selves. Along with the plant closings have gone the hopes and dreams of many thousands of retail operators, restaurant owners, and thousands of other small businesses too. Hundreds of entire major shopping malls stand vacant, as seas of potholes consume local roads. The city of Hamtramck, MI a Detroit suburb of 40,000 people, is bankrupt and has had to layoff all but two employees, one of whom works part-time. The traffic lights are shut-off and stop signs now appear at those intersections instead, as the city can’t even pay its power bill. I could go on & on & on for days but I don’t have the time.

I haven’t driven a semi in almost 2 years as my eyesight has begun giving out early. My last 10 years in the industry was spent delivering fresh and frozen meat on a regular multi-stop route through the Chicago-area and throughout southern Michigan. Between 2001 and 2009, my boss lost 14 of 19 major weekly customers in Michigan to bankruptcy, including three major grocery chains, plus numerous less-frequent customers. The Detroit News reported before Christmas of 2007 a 29% unemployment rate within the city limits of Detroit, with an estimated 44% of the total adult population not working, and another news story reported a 1 in 200 chance of selling a house across the entire metropolitan area, which still has 4 million people total. Since 2003, home prices within the city limits of Detroit have fallen by 90%, and today there are thousands of houses in move-in condition on the market there for $5K to $10K. The suburbs are not immune either.

You know what?  Detroit and Cleveland used to be two of the greatest cities in the entire world.

Today very few people would call them great.  They are just shells of their former glory.

Sadly, this cruel economy is causing “ghost towns” to appear all across the United States.  There are quite a few counties across the nation that now have home vacancy rates of over 50%.

Another reader, Flubadub, also remembers how things used to be….

I am also a product of that generation and remember well the opportunities that existed for anyone with even a high school diploma in those days. Just within a reasonable commute to where I grew up we had US Steel, 3M, General Motors Fisher Body, Nabisco, The Budd Co., Strick Trailer and others providing thousands of jobs that enabled you to provide a decent living for your family. There were also plenty of part time jobs to keep high school students busy enough to avoid the pratfalls of idle youth and afford the 28 cent/ gallon gas for their used cars. Most of it is gone now and I don’t blame the Mexicans or the Chinese for stealing it. I blame the greed of the globalists and their flunkies, the phony free trade advocates in office, who’ve spent the last twenty years giving it all away.

Our jobs are being shipped overseas so that greedy corporate executives can pad their bonuses and our politicians are allowing them to get away with it.

According to a new report from the AFL-CIO, the average CEO made 343 times more money than the average American did last year.

Life is great if you are a CEO.

Life is not so great if you are an average American worker trying to raise a family.

Another reader, Itsjustme, says that things are also quite depressing In New Jersey….

I live in northern NJ in a suburb a very short ride from NYC.

Our region was hit very hard — we once had a very prosperous and booming industrial area; mixed use with many warehouses and commercial buildings, hirise and lowrise.

The majority of companies that were in those buildings are gone. Long vacant; the signage is left and nobody is inside them.

One large commercical building with 15 floors now is home to 2 tenants: a law firm and a Korean shipping company.

It’s very sad what’s happened out here.

The only “companies” moving into these buildings are small change tenants that that are usually Chinese or Middle Eastern; you’ll see them subletting out 2 or 3 offices in these buildings and they operate out of those offices. They’re mostly importers of apparel or soft goods.

My guess is that they are there on very short term leases.

This will benefit our local and state economy not. These groups usually send the money home.

If this is the shape of things to come, we can hang it up right now. No viable companies are moving into our area; if anything new is being built it is retail and service industry garbage, like crummy fast food chain restaurants. No livable wage jobs are entering our local economy.

As I have written about previously, the standard of living of the middle class is being pushed down to third world levels.  We have been merged into a “global labor pool”, and what that means is that the standard of living of all workers all over the world is going to be slowly equalized over time.

Our politicians never told us that all of these “free trade” agreements would mean that soon we would be living like the rest of the world.

America used to be the greatest economic machine on the planet.  But now we are just another region of the one world economy that has workers that are too expensive to be useful.

In the end, there is not some great mystery as to why we are experiencing economic decline as a nation.

If millions of our jobs are being shipped overseas, it was basically inevitable that we were going to experience a housing crisis.  Without good jobs the American people simply cannot afford high mortgage payments.

Today we consume far more wealth as a nation than we produce.  We have tried to make up the difference by indulging in the greatest debt binge that the world has ever seen.

We have lived like kings and queens, but our debt-fueled prosperity is not sustainable.  In fact, the collapse of our financial system is a lot closer than most people would like to believe.

Things did not have to turn out like this, but we bought into the lies and the propaganda that our leaders were feeding us.

Now our economy lies in tatters and our children have no economic future.

  • bobcat

    Why should the people who say they don’t care start caring? Because when a third of men don’t have a job they’ll find other things to do that those who claim not to care will find objectionable.

    What is to become of them? Nothing good. Their activities will likely help grow the hellholes.

    We all do better when we all do better. That’s why everyone should worry about the plight of the legions of unemployed and underemployed.

    Dean Baker wrote that the invisible hand is fast becoming a visible fist.

  • http://www.infowars.com Frank

    Great article! Keep those articles coming like i have mentioned before.

  • http://www.planorperish.com/ Gutter Economist

    ” The bottom line for most corporations is to maximize shareholder wealth.”

    The bottom line for most corporations is to maximize executive compensation. Shareholders and direct labor employees are both getting screwed.

    The definition of Outsourcing should also include hiring non US citizens to work in the USA.

  • Terry

    USA allows foreign companies to come here ahd do pretty much what they want, but other countries always have numerous roadblocks in the way of US companies. Most of our politicians from both major parties are to blame. We allowed ourselves (as a nation) to be bribed by politicians using our own money. We were happy to take the goodies as long as we thought someone else was paying. We could tax “the rich” at 100% and it would not be eough. We have to face the truth and that is that we have literally gotten fat, dumb, and happy.
    This is what happens when you count votes from the takers among us. “We have met the enemy and he is us”.

  • Paul

    Just ask yourself this: whould you ever buy the product you are producing or do you think it is way too expensive for your budget?

  • Paul

    China doesn’t steal your jobs. You give it to them, because their products are cheaper.
    Instead of buying that longlasting quality product from around the corner, you buy cheap cheap so you can throw it away when you move house.
    Instead of building a solid brick or even concrete house in hurricane and tornado area you have matchstick houses that blow away every other year, together woith all those appliances and possession. THAT’s where your wealth goes.

    Have you seen how mini tornados form over barren land, but never inside a forest? Maybe it’s time to get more hedgerows in between those wheat fields in Kansas?

    You can’t expect that your actions and omissions won’t have any effect.

  • DM

    You do a great job of describing the problems of our country. Do you have any solutions? This country needs intelligent solutions.

  • BlacKat

    ‘Our politicians never told us that all of these “free trade” agreements would mean that soon we would be living like the rest of the world’!!!!

    Sorry, but the above quoted phrase is just a plain example of American hybris, and just another reason why we, the rest of the world, cannot be sympathetic with you.

    I strongly recommned you to read an excellent book written by a great American economist back in 1972 and republished recently: Super Imperialism by Michael Hudson. It will literally open your eyes.

    And always remember: The Fed is NOT a federal institution. You brought the distruction upon us all (because only an imbecile rejoices when USA is in trouble, as you can easily bring all us down with you ) by allowing these FED fat cats do as they’ve pleased for far too long.

  • http://moneyedpoliticians.net Jack Lohman

    Absolutely *NOTHING* will fix our system without getting to the root: political corruption. Politicians sharing in the booty by taking campaign bribes, and then rolling over to the industry that wants in the taxpayer’s pockets. The recent “crisis commission” blamed everyone except the nation’s board of directors — our CONGRESS — even when the politicians are 100% to blame.

    The key problem is the way we finance elections. There are only two kinds of money: public and private. Private money got us here and nothing will change until we get these legal bribes out of politics. But a fix is vigorously opposed by the political elite that benefit from the existing corruption.

    Nothing else matters, regardless of your issue. Nothing is going to change until we have public funding of campaigns. Politicians spend taxpayer dollars because they ARE PAID to spend taxpayer dollars, and robbing the SSI fund and Medicare (as just two examples) gives them the cash needed to attract campaign dollars.

    Our problem is NOT government, and it is not R’s or D’s. It *IS* that government is owned by CEOs and corporate interests that want in the taxpayer’s pockets. The 2010 elections were funded by just 1% of Americans, when they should be financed by 100% of taxpayers. And at $5 per taxpayer it would be a bargain. Even at 100 times that.

    CEOs want short-term profits to increase their already massive salaries, and are willing to share those profits with the politicians that made it all happen. Thus NAFTA and other laws are passed that enable outsourcing to countries with wage scales one-tenth ours. Or are repealed (like Glass-Seagall) to enable the Fat Cat bankers to rip off the public. And all while deregulation crashes our country, China and India flourish.

    In addition to public funding of campaigns, politicians must also (a) be put on a pay-for-performance basis, where if deficits or pork barrel and special interest spending go up, their pay goes down, and (b) they must put their own wealth in a blind trust that blocks political insider trading (which today is rampant). They must also get their health care from Medicare and their retirement from Social Security, and receive it only when they reach 67 or 69 or whatever age the rest of us qualify.

    As a former CEO my company would not have survived if I had an employee or board of directors who took money on the side and gave away company assets in return. Our country can’t survive this corruption either.

    So the voters change nothing. We elect a new group of politicians and the Fat Cats simply re-direct their bribes as we continue down our spiral. But the problem is that all of these changes must be made by the foxes themselves (congress).

    The public’s choices are simple: a 100% turnover of politicians until the above fixes are made, or a national revolution is inevitable. And all because our politicians refuse to stop the bribery they benefit from, and the public refused to stop it.

    If politicians are going to be beholden to their funders, those funders should be the taxpayers. We MUST demand that our senators and representative pass the bill at: http://fairelectionsnow.org/about-bill

    Jack Lohman …
    http://MoneyedPoliticians.net

  • LC

    Treason within has ruined this once great country.

  • how bout that hopey changey?

    Those good paying jobs will never return. The golden goose the taxpayer is going the way of the dodo bird. I guess the smartest guys in the room (politicians) didn’t stop to think about shrinking tax revenues from outsourcing and all these bravo sierra trade agreements.

  • Just Me

    here’s the jobs left as they can’t be outsorced
    fast food,home repairs,lawn and garden,medical field, state,county town or fed gov.which includes intrastructure,store clerck,car salesman and repairs, drug dealer,pimp,prositute.

  • Matt

    Gary2,

    “the United States now has the highest corporate tax rate in the entire world. This also provides great motivation for corporations to move operations outside of the country.”

    Taxing the rich has driven your job overseas. Like it?

  • Gary2

    An ABC News/Washington Post poll found 72 percent of Americans support tax hikes for the wealthy — with even a majority of Republicans in agreement. TAX THE RICH HARD AND SPREAD THEIR ILL GOTTEN WEALTH. ITS COMING VERY SOON ONE WAY OR ANOTHER.

  • Matt

    If you want to blame someone, blame govt – all of govt – not just Democrats, not just Republicans – all of them. Govt writes and approves the laws and regulations – not businesses. Want to solve the problem? Then get rid of govt – and what I mean is shrink it greatly, by 80%. Govt should only provide basic protection and basic law. Throw out the current laws and start over from scratch making new ones or keeping only the absolute necessary ones. No one is attacking us so bring home our military and defend the homeland only. And that’s all the govt should do – create the basic rules & laws of an orderly and fair society and defend the homeland. Get rid of all the other junk – all of it. Raise enough taxes to defend the homeland and write & enforce the basic laws of society – that’s all that taxes should pay for – nothing more.

    This will solve the problem. Business will thrive in the U.S. under these conditions.

  • http://EconomicCollapse David

    50 years ago, most women also stayed home to raise the children. Now most of them work. Not only do we have half the jobs, but twice the people trying to fill them. Somewhere along the way, someone really messed up. The light is at the end of the tunnel, and I can hear the whistle blowing!

  • Snoopy-the-economist

    I have read hundreds of articles like this and agree that America is falling apart. The federal reserve should be abolished and most politicians belong in prison.

    WHAT CAN BE DONE? Even the republican congress budget plan is far short of what’s needed. Do we just watch as America spirals down the drain????????!!!!!!

  • liberranter

    Should we all chant “We’re Number 2″?

    Actually, it would be pretty foolish to assume that we’re even that high on the economic ladder anymore. In addition to China, there is the continuing rise of the other Asian tigers (South Korea, Singapore, India, etc.), as well as the emerging competitive industrialization of non-Asian nations such as Brazil, Russia, etc. In terms of industrial output for any products other than the useless and bankruptcy-inducing “defense” industry, I’d say we’re lucky to make number 10 on the list.

  • John S

    Here’s an idea: Change the tax laws so it is financially impossible for U.S. companies to have overseas employees. Say a 10,000 percent income tax. If the management decides to move the company’s headquarters out of the U.S., confiscate all their U.S. assets, and deport them. (Or lock them in a room with 50,000 laid off employees, their choice.)

  • mondobeyondo

    I tried the “live on 5 dollars a day like many people do in the world” challenge… needless to say, I didn’t get far at all.

    One meal at McDonald’s pretty much wiped out my daily allowance. Yikes! And you really expect Americans to get used to that kind of lifestyle?! Do I have to work an entire week to buy a Playstation game? Not to mention important stuff like gas, electricity, water, etc? And oh gosh, my CABLE TV!! I can’t live without cable! And my big screen TV for watching the royal wedding this Friday! And what about my SUV? And my dinners at Red Lobster?

    I can’t live like this!!! I can’t.. I CAN’T!!!

    (spoken like a true spoiled self centered American!)

  • Robert

    The Willow Run plant manufactured B-24 bombers.
    The B-29 was manufactured by the Boeing plant in the west.

  • VegasBob

    Michael wrote: The bottom line for most corporations is to maximize shareholder wealth.

    I’m a retiree from Fortune 500 America. I worked in Corporate Finance. I saw what was coming so I got out in 2007, just before the US economy really headed south.

    I can tell you categorically that my personal experience is that the bottom line for most corporations is not maximizing shareholder wealth. The bottom line is maximizing management’s wealth, while tossing enough crumbs to stockholders to keep them from looking too closely while management loots the company.

  • Bobby Smith

    “Our jobs are being shipped overseas so that greedy corporate executives can pad their bonuses and our politicians are allowing them to get away with it.”

    It appears that our “smart guys” are being outsmarted by the Chinese. What will the smart guys do when it is all taken? Perhaps relax in China or (less likely) contemplate the damage done by them to the USA.

  • BillyBob

    I live in Reno and things here are absolutely bad. We used to thrive off our tourism but it seems that there isn’t anybody touring anymore. Tour or eat?!?! Pretty easy answer. As you drive around town you see completely empty strip malls, you see “For Lease” everywhere you go. The housing market in Nevada is absolutely terrible, we truly live in a “Boom or Bust” state. There are people that say “we are coming out of the recession”,…..YEA RIGHT! I believe that we are in the beginning phases right now. We are going to see many bad bad years ahead. An age like we have never seen before.

    I truly hope we can come out of this, but when you take all the water(money) out of the fish tank(economy), the fish always die!!!!!!!!!!!!!!

  • onecansay

    “We have lived like kings and queens, but……”

    You did say this.

    We are not the Kings and Queens of the world. We have conquered in THEIR NAME and then THEY took possession by OUR blood, sweat and tears. WE let them.

    Yes, with their millennium of control through religion and ‘with holding of knowledge’, THEY have led all by the collective nose.

    The masses have been retarded to such an extent that all we have are very confused souls. This saddens me greatly.

    The only middle class that has ever existed is that which constitutes the merchant. You may know them now as business owners. Many have allowed themselves to be led to despair.

    Greed all around. Looking down on your fellow man, sometimes in disgust. How many still look down, even in these VERY troubling times.

    Our children have been given a death sentence. Their souls are wanting. We were told that YOU MUST leave a better future for your children. Unfortunately, MOST thought this meant a better material world.

    How has that worked out for ya’?

    The unemployed will have very little to choose from.

    “Service leads to Citizenship”. Welcome to the ultimate military indoctrination of all time. Serving 25 years in the Roman military before one could get their “citizen freedom card” and one acre of land will only seem like a trip to Disney World. If, and a BIG IF, you survived!!!!

    History is once again repeating itself. We have yet to reach the bottom of the trough.

    In the future there will be no ‘rainbow’ of ‘citizenship’.

    “Row you pure excuse for a stench, ROW”.

    America is NOT the only country in the world. All are being led to destruction.

    Once again, “Greed All Around”.

    Maybe it is time to look within, not without.

    Regards.

  • Margaret Bartley

    There is a difference between Outsourcing and Offshoring.

    Outsourcing is contracting the work out – it could be to US citizens.

    Off-shoring is moving the work overseas.

    It’s super-important that explanatory articles be clear, because although they are both used to destroy the American middle class, they are using two different weapons.

    By confusing them, you are making it more difficult for people to fight back,since that confusion fuzzes peoples’ brains, and makes them want to quit reading.

    When the U.S.P.A.T.R.I.O.T. Act was passed, after 9/11 attacks, one of the sticking points was that the Republicans wanted to require that the government lay off 700,000 government workers, and replace them with contract workers. These contact workers are “temps”. They have no job security, benefits and make very little money – just the opposite of the government workers who were laid off.

    I’ve handled outsourcing invoices. Although the $45K jobs are now being done by workers with no benefits and making $20, the agency that is charging the government is charging $60K per worker, and more! I was handling invoices where the agency was charging $125/hour for work that had been done by IT people making $65K! That’s $250,000 a year for a contractor!

    No wonder they wanted to outsource government work – they charge the taxpayers through the nose.

    Then, when the WTO rules are finished, they’ll bring in workers from the Philippines and Bulgaria, and pay them $10K a year!

    This is outsourcing.

    Offshoring is when the corporations decide to cite their new generation of factories overseas instead of the US, like the Steel companies did in the 80s and the high tech sectors did in the 90s.

    It takes a generation or two for that to pay off. “American” businesses have invested hundreds of billions of dollars moving the industrial sector overseas. It started with the Lima Accords signed in 1974. It’s a Done Deal. Any attempt to change that is doomed. It’s done.

    There’s no way to win a Race to the Bottom.

    We need to make sure we have sovereignty over our own resources.

    That’s why it’s important to clearly differentiate between outsourcing and offshoring- this battle is not over, not by a long shot, and we need to be prepared to see clearly what is being offered up for our consideration, and to identify the lies that are presented to us.

  • Maria

    Michael,

    Your article is so true.

    Now, our country is also experiencing the results of apathy.

    Too many people want to blame America’s catastrophic failure on one person or one party. That just proves how immature and irresponsible we are as a nation.

    Nobody did this to us. We did it to ourselves by being apathetic.

    Yes, the Federal Reserve has been a key player in orchestrating this collapse, but we allowed them to exist all these years. It took decades for them to succeed.

    We contented ourselves with the fake, cheap money they doled out never really asking ourselves where it was coming from, how we would pay it back or what effects it would have on our economy. Like Pinocchio, we blindly went along to enjoy the fun at Pleasure Island. Now we are paying the price.

    Unfortunately, we don’t have a blue fairy, and nobody and no political party is going to rescue us from our stupid mistakes.

    We turned ourselves into a nation of jackasses.

    Mea culpa, mea culpa, mea maxima culpa!

  • David Kane

    When will you figure out that those `good`jobs don`t exist anymore. The Chinese and other workers are not earning great salaries. The golden age of the `50s was an historical accident resulting from the consequences of WWII. It was all over by the end of the`60s.

    In 2007, I prepared a paper which sets this all out in detail. I did it simply as a way of sorting out my own thoughts. If you let me have an e-mail address I will send you a copy. I am not a crank, I am a retired academic, I taught political economy at 2 universities in Canada.

  • Fed Up

    And WORSE news is that we are outsourcing good jobs right here in America to illegal aliens:

    http://www.examiner.com/immigration-reform-in-national/majority-of-americans-now-see-illegal-aliens-as-detrimental-to-the-economy

    Quote:
    “A 2010 study by the Pew Hispanic Center found that while every demographic of native-born workers has lost millions of jobs during this deep recession, foreign-born workers have actually increased their employment numbers.”

    “The Fiscal Policy Institute study also found that illegal aliens are filling certain jobs in New York City in the following numbers:

    -Painters, construction & maintenance…7,000 (34 percent of workforce)

    -Cooks…21,000 (33 percent of workforce)

    -Construction laborers…17,000 (32 percent of workforce)

    -Automotive service technicians & mechanics…5,000 (26 percent of workforce)

    -Carpenters…9,000 (26 percent of workforce)

    -Taxi drivers & chauffeurs…11,000 (20 percent of workforce)

    -Truck drivers…9,000 (15 percent of workforce)

    According to U.S. Census data, Mexican immigrants (both legal and illegal) are more likely to have a job than those who were born in New York City. About 75 percent of all Mexican nationals in New York between ages 16 and 65 are employed in the civilian work force.”

    And recently an Alaskan cop was found to be an illegal alien who had stolen someone’s identity and worked on the taxpayers dole as a police officer for 6 years. But I guess he was just taking another job that “Americans don’t want to do.”

  • http://moneyedpoliticians.net Jack Lohman
  • Gabrial Singh

    well, the horse ran out of the barn about 15 years ago on this issue, and you good tea party types just noticed??? Nice! Nothing like a little common sense to come out of this site from time to time. I have been fighting for American jobs for over 15 years now, WHERE have you all been???

  • The Unicorn

    The 1st experience of off-shoring or outsourcing of my job came in the 90’s when I was an aircraft mechanic working in the fuel tank of a wide body plane that 2 weeks before had come back from China where they had preformed a major C-check and engine torque box/wingbox mod.There was a fuel leak so we opened up the the wing tank.After removing the panels and crawling into the wing tank I found a large amount of bubble wrap and a 1.5ft.X6ft. piece of plywood that had been left in the tank.Then I went to inspect where the leak was coming from and found a large area covered in a thick layer of sealant.I removed the sealant to have access to the -.002min. tolerance fit bolts.What I found were several bolts which had holes several .001’s larger than they should of been.There was no way a leak could of been avoided due to the poor workmanship its amazing the work had been signed off.So knowing this was beyond a simple repair I had an A/C inspector take a look at it to see what it would take to get the work signed off.This is the 1st and only time I’ve ever seen this type of reaction.The inspector climbed down from the ladder and started walking away then just clocked out and left.The guy decided it was safer to take a loss in pay instead of being asked to sign of the work to put the plane back in service.Anyways it took several days to repair the “repair”.The next plane sent to China for a C-check was accompanied by several top,experienced mechanics.The knowledge must have transfered because after that there was a 100% improvement in workmanship.The experience the mechanics passed on was priceless.I feel the USA can compete but when you give away the whole store lock,stock,barrel and brains basiclly whoever will work for the least gets the job.

  • mondobeyondo

    Classic Catch-22 situation.

    We buy products made overseas, because we can’t afford, or can’t find, American made products. Buying American made products would keep American workers employed, but a lot of those American workers are buying Chinese goods from Wal-Mart because they are cheaper than the goods they make with their own hands and tools!

    So China has us beat to a pulp in the price department. Where can we improve? Quality, for starters. Make the best products. Yes, they’ll cost twice as more as the garbage sold at Wally World, but American products last 3 times as long. Our toys don’t break 15 minutes after the kids start playing with them.

    Quality used to be a priority… used to be.

    Ford used to have a commercial on TV that said “Quality is Job One”. It should be our mantra. Zenith’s commercial was “The quality goes in before the name goes on”. We must raise our manufacturing standards — what’s left of our manufacturing base, that is. It’s about the last hope we have left.

    Long after the Mercedes and Toyota are broken down on the side of the road, that Timex will still take a licking and keep on ticking. THAT is what we have to get back to!!

    (p.s. Is Timex still made in the USA? Hmmmm.)

  • http://TheEconomicCollapse Dave

    Hey, I just listened today to our modern equivalent of Churchill during the late 30’s on CNN. They were interviewing Ron Paul. He says all the right things; I know he has a snowball’s chance in hell in this political climate, but once this economic collapse has run its course, and the nation realizes that he was right. Mark my words, either in 2012, if the SHTF happens soon, or 2016 for sure, if the world allows us to dally into the 2012 political season to see if we are going to change or ways.

    This nation’s problems could be solved in one signing of the right law. A corporation can go anywhere in the world to produce a product that it chooses to make, but understand one thing corporate CEO’s. The congress will put a tariff on every product not produced in the U.S. (including oil), enough tariff to bring it up to what it would cost to produce that product in the United States. The revenue from the tariff, would bring the nation out of it spiraling debt. Sure products would cost more in the U.S. (sorry Walmart) but we all would have jobs to pay for the increase.

  • Antonio Gonzalez

    You can tax the rich, but they have the police and the army.

  • El Pollo de Oro

    I live in Philadelphia, a city that used to have a ton of blue-collar manufacturing jobs as well as a great deal of white-collar employment, but the blue-collar manufacturing jobs have disappeared–and on the white-collar side, a college degree isn’t necessarily the ticket to prosperity it once was. Philly has its share of nasty, dangerous ghetto areas as well as ritzy, upscale areas like Rittenhouse Square. But then, there are parts of Mexico City that look like Beverly Hills except that the signs are en español. A minority of Chilangos are filthy rich, which is what you expect in a Third World country: an uber-rich minority and a poor majority. And when The Banana Republic of America (formerly the USA) signed on for globalism and ignored Ross Perot’s warning, it opted to become a Third World country—which means that you can kiss the American middle class goodbye.

    But there will be some growth industries in The Banana Republic of America: kidnapping, drug smuggling, murder for hire, carjacking, armed robbery. And if you want a taste of what life will be like in American cities in the future, just spend a few weeks in Guatemala City, Johannesburg or Caracas—all of which have the type of horrible crime rates that BRA cities can look forward to in the future. Desperate people do desperate things, and hardcore desperation will be in the norm in the BRA. It won’t be fun (unless, of course, being robbed at gunpoint in broad daylight is one’s idea of a good time).

    Welcome to life in a rotting, decaying Third World hellhole. Welcome to the collapse of the Roman Empire. Welcome to life in The Banana Republic of America, formerly the USA.

  • http://www.danielrevelationbiblestudies.com Robert Stout

    Excellent article!!! Really enjoyed your post Margaret Bartley, it is true!!! Looks like you have a lot of experience in this field!!! Keep up the good work of sharing your expertise with all of us!!! My expertise is also getting to the bottom of our country’s problems and checking and investigating sources to make sure they are true!!
    Hold on to your chair, here are a few things you may have not considered before from the Global Elite:
    1) Foment such revolt in North Africa and the Middle East that it will be impossible to get oil from the region.
    2) The Global elite intend to destroy the dollar by the end of 2012.
    3) The Arabs will be infuriated that all of their trillions of dollar holdings in American T-bills will be worthless when the dollar is dead.
    4) America is too be reduced to Third World nation status, as China is elevated.
    5) The Elite – the Rothschild/Illuminati/Jesuit power will buy up all mortgaged property in America for pennies on the dollar.
    6) Oil is to go to $150-$200 a barrel, with gas going to $6-$12 a gallon, if you can get it-resulting in skyrocketing prices for food and all goods.
    7) Massive North American oil fields will be brought on line when oil reaches $150-$200 a barrel. This will all be taking place very quickly, so prepare today!!!

  • Gary2

    We may have a high stated tax rate that these scum bag corporations do not pay-GE etc. I say we simply confiscate their wealth and spread it around. Corporations are sitting on record levels of cash. Time the government taxed it away and redistribute to the people.

  • timo44

    These articles are very good but very depressing. I just get so upset at how we are letting this sorry Government and big business just step on use like we are nothing. Where is the anger, where are the people protesting in the streets. The only way thing will ever change is if we Americans get on the horse and ride it right up the butts of our Government. Ron Paul is running again, don’t look at these sorry 2 parties that are runing the country look at the person. He wants to remove the fed we should be 1oo% behind him. We have to do something or it’s just going to be so painfull in the future.

  • Terry

    Where do you live, Gary2? I want to spread your wealth around.

  • savage

    china is not in the clear. We are bound at the hip and if one of us falls, we both fall. China needs to find a way to sustain its 1billion+ population. Good luck making sure they all have jobs lmao

  • http://www.pathtoasia.com rhea

    This is like trade war in 3…2…1… Obviously they’d rather blame China for our problems rather than admit their own responsibility. When China allows the yuan to rise, it will mean higher prices for all of the Chinese goods we have become addicted to. In addition, we will be competing with Chinese consumers for goods produced around the world – from raw materials to food. While we may gain some jobs, I fear that it will come at a much higher price than the average jingoistic Congressman realizes.

    We help Americans find jobs and prosperity in Asia. Visit http://www.pathtoasia.com/jobs1/ for details.

  • JD

    These times we live in are truly hard like the first Great Depression. My grandfather used to eat chicken feet soup during that time. I never imagined that we are facing the same challanges. I loved that movie Cinderella Man when it first came out. The scenes where Jim Braddock had to beg for money to keep the power on was truly heartwrenching. Now im feeling that same sence of desperation. I was laid off from my construction job almost 2 yrs ago was on unenjoyment for over a yr they cut me off last september so i lost my apartment. Since then ive been couch surfing and hotel hopping. Now i occaisonally sleep in my car. I was lucky enough to have a friend with a lawn care business so i can at least put ever increasing gas in my car\house. I hate to say it but i think we will see hoovervilles in the major cities soon. When the welfare & food stamps & all the other govt. programs end the anarchy begins. I started beliving in God again after all this started. If all there is is this hard life and nothing else i would have shot myself during Christmas. I hate that commericial holiday more than ever now. Nothing but a guilt trip anyways. Well i said enough. Mike keep up the blog dont change. I need it as we sit upon the end of the world.

    • Michael

      JD:

      Keep hanging in there. It has got to be hard but keep hanging in there.

      Michael

  • http://canspeccy.blogspot.com CanSpeccy

    An excellent post.

    And a solution?

    “We have minimum wage laws. We have workplace health and safety standards, we have strict environmental protection laws.

    Then we say capital can move to where the costs of production are lowest, i.e., where none of the above laws apply.

    Then we say goods can be moved to wherever they can be sold at the highest price, i.e., where all of the above laws apply.

    Result: unemployment here in Canada, where folks are denied the opportunity to do what they always used to do, which was to make shoes and shirts and cars and washing machines for one another.

    Solution: abolish minimum wage laws and introduce a revenue-department-administered income supplement for those earning less than what used to be the minimum wage. …”

    Read more

  • Kevin

    Free Trade and it’s close relative outsourcing starts at the bottom and works it’s way up. When NAFTA was passed we we’re discussing it at work an a mechanical engineer gave his two bits how good it was to have Free Trade. Free trade will lower prices and raise our standard of living. A decade later the same guy was reading some engineering magazine complaining that engineers are being outsourced on line and how that is unfair!

    As the industries that provided good jobs at good wages flee everyone eventually takes the hit. When thousands loose benefits the dentist and physician feel it too; just a bit later.

    To all of those that think US workers we’re overpaid and that unions were bad; well your about to see real poverty as it’s replacement. Oh, if you think unions were the cause or at least the catalyst remember that the low paying traditionally non union US textile industry has fled to the developing world chasing slave labor. Paying minimum wage in the US was just too damn expensive.

    China actually needs a Walter Reuther. He would last about five minuets after he first spoke the words, “Organized labor” outside of it’s context.

  • bob

    I keep seeing Gary2 post comments about taxing the rich and spreading the wealth. Gary do you actually believe that our corrupt government will give YOU or anyone else all of this wealth? You might get lucky enough to qualify for a GOV’MENT cell phone so the democraps can buy your vote. OR you might get some of that GOV’MENT cheese. Maybe you can sell your food stamps to help pay for your BMW like so many people I know do. By the way I hate republicans too. I just wish we has some decent people who respects our constitution run for office. I also wish we more people could see the REALITY of our downhill situation with our economy and government.

  • eiremax

    Here’s something else happening right under our noses. The government is buying millions of acres of land in the United States with taxpayers dollars and turning the land over to China. China is not sustainable, it’s overpopulated and polluted. They plan to move tens of millions of communist Chinese to the US.

    Google Foreign Trade Zones. Over 200 FTZs are planned and being built within the USA. FTZs will be governed, staffed and inhabited by communist Chinese. FTZs are foreign military bases disguised as ‘trade zones.’ Read up on it because two FTZs have already been planned for every state, with more sure to follow.

  • James

    We all need a reality check, Jobs are gone and never coming back. Unless, we all band together and create an economy that caters to just Americans. No corporations would be allowed to do anything in this country again unless they provide good jobs at good pay rates in this country. The other alternative would be for Americans to realize that the American Industrial Revolution is over. That been said, unemployed workers should explore the possibility of a “Reverse Industrial Revolution” where the unemployed return to the farm, or small cities and revive a agrarian economy that is local and provides goods and services to local economies. Bring back Mom and Pop businesses. Farms would provide food and fiber for the local community, and provide services that serve the farms with seeds, tools, machines, Etc. Railroads would interconnect these small communities and transport their products.

  • Martin

    In Europe its not much better we also have have had of of compagnies moving to Eastern Asia so called low wage countries.
    But we have to remember its our goverments who allowed these policy`s to continiu en thrive.
    Goverments and CEO`s of big compagnies are to blame they only look at profits and not at the human level and tragedy`s.
    Remember what goes around comes around it is for the people by the people trough the people that makes economies grow and prosper.
    If we don`t protect our local markets were doomed in the end.
    You think that the Chinese care if Americans of Europeans have a very hard time to makes ends meet? Well think again!
    People need to wake up and demand our rights to
    work and being able to buy a decent house and provide for ones family.

  • Michael A. Banak

    So many good points have been made. But the fundamental problem is that we do not know what sin is. How else can you explain the lack of National Consensus on who the bad guys are? We cannot even agree on what the bad deeds are.

    When we cannot muster the will to finger the sins of our buddies, then we are unable to fix the society and the economy based on it. Pass all the laws you want. It will avail nothing.

    The vast majority of our social ills can be solved through families. families willing to sacrifice for their own, rather than off-load their problems to others far away.

  • Rick

    Combine this with the other great lie that automation and computer advancement creates jobs and we’re really screwed. What isn’t being outsourced is being eliminated by machines.

    Every job that’s created in the design and manufacturing of machines to increase productivity eliminates 3 or more in the field it’s “benefiting”. Between outsourcing and technology designed to eliminate the need of human workers the gap between the few at the top and the many at the bottom can only grow.

  • Nexus

    To some extent Rick that may be true but what is happening is that manufacturing facilities have closed down and industry segments have been lost (the US simply does not manufacture some things anymore) and ALL these jobs have gone. If the manufacturing facilities had remained in the US jobs would have diminished as capital investment substituted labour but productivity would have risen. In a healthy productive economy workers would have more chance to find roles in other manufacturing facilities.

    The US model of ‘debt finance’ is one of two routes that the US could have followed – debt finance is based on the the chase lowest input cost – hence the race to the bottom – lowest labour, lowest capital costs, etc.

    The other path that the US could have taken would have to build an ‘innovation economy’ that focused on building competitive advantage through technological advancement. A strategy recommended by ‘Project Socrates’ which was commissioned by President Regan but then cancelled by the older Bush – then the rot started in earnest and the rest is history as they say.

  • Craig

    TARIFFS! TARIFFS! TARIFFS! This country was not built on “free trade” as the International Banker controlled economists and Mass Media would have you believe, but upon TARIFFS.

    The U.S. is the largest single market in the world. If a country or a corporation wants to sell its foreign produced products here, it should have to PAY for the PRIVILEGE. THIS IS OUR COUNTRY! TARIFFS capture the corporation’s FOREIGN PROFIT for OUR use. If it doesn’t want to pay the TARIFF, then it will have to build a factory here and hire AMERICANS. As AMERICANS we want to live in an AMERICAN ECONOMY, not a poverty stricken INTERNATIONAL BANKER SLAVE LABOR ECONOMY. This is the only way to GET CONTROL of our economic destiny. History has shown TARIFFS AND NON-TARIFF BARRIERS work remarkably quickly — Japan and China are two recent examples of the effectiveness of this method to rapidly power up economies.

    The International Bankers and their Corporate Controlled Media will WAIL and CRY DOOM. It’s CLEARLY A MATTER OF SURVIVAL –EITHER US OR THEM — I SAY TO HELL WITH THEM! WE ARE AMERICANS!

    SHOUT THE SOLUTION FAR AND WIDE!!!! DEFEAT THE FREE-“TRAITORS” !!!

  • Morpheus

    The problems we have in this country are not simple or easy to fix. Our biggest problem are the people. We sat around and did nothing while our country crumbled. It’s time to stand up.

    “JOIN THE REVOLUTION”

    Read “Common Sense 3.1” at ( http://www.revolution2.osixs.org )
    We don’t have to live like this anymore. “Spread the News”

    FIGHT THE CAUSE – NOT THE SYMPTOM

    You have nothing lose because you’ve lost it. Now go and get it back

  • http://theeconomiccollapseblog.com/archives/young-girls-banned-from-selling-girl-scout-cookies-on-their-own-front-lawn Haalen

    When all this began happening people didn’t care because any American who wanted a job had one or could get one. I’m a high school drop-out and I made a good living and am comfortably retired. However, during the 80’s I began to see a change. The Regan trickle down program; we owe everything to wall-street; they trickle down on us. The more we give wall-street: tax breaks, privileges, do away with “necessary regulation”, and they will trickle down on us more and more. Well, how did that work for us? The above article says it all.

    One reason we don’t get much complaint from the upper middle class is because they have been shifted into the investor class. We all tend to support the hand that feeds us. The investor class, and retirement class has become dependent on corporate dividends and stock appreciation to survive and live their comfortable lives so they support their corporations. This isn’t sustainable. There are basically 7 economic classes: government class, professional class, service class, corporate class, investor class, welfare class and production class. All of these classes are parasites on the production class. Parasites tend to destroy the host, and we can see that happening all around us.

    The God of the Bible said “I set before you this day a blessing and a curse. A blessing if you keep my commandments and a curse if you don’t”. What we have operating in America is a curse. We have given all praise and glory to wall-street as our benefactor, to our detriment, and America is losing its blessing. The curses will intensify until we as a nation stop rebelling.

    Remember, all the people who are doing this to us have been voted into office. So voting isn’t working. What about the T-party revolution? That hasn’t worked either. Rebelling will only intensify the curses.

    My only problem with government employees is that they didn’t care when the private industry was under attack and jobs were being outsourced. Now, government employees are under attack and they are going to get what’s coming to them, the same thing private industry got. These high pay government jobs are unsustainable without private industry production jobs to pay for it.

    Those who have an eye to see and an ear to hear will notice that all of this is being done on purpose.

    Another fine and enlightening article.

  • http://moneycrisisgameplan.com Money Crisis Game Plan

    People need to move away for the Job/Employer mentality. Employees pay the highest tax rates with few deductions.

    You can potentially SAVE THOUSANDS every year with home business tax deductions.

    Get financial education with the
    Elevation Group and leverage the current financial crisis to generate wealth.

  • CoronaBunny

    Yet America seems more than happy to accept this state of affairs.

    The Tea Party was a little hick-up, and was then betrayed by nearly everyone it helped get elected.

    All this is the inevitable result of not HATING the hippies… no, we can’t all just get along. This is what happens when you ‘compromise’, or ‘negotiate’, or ‘seek common ground’, with hippies. They are liars, deceivers, manipulators: they are inherently anti-civilization.

  • http://www.ihavebeenoutsourced.com Stuart

    Get your I have been outsourced car magnet. Show the world who is being impacted.

  • Maxwell Horse

    Does anyone go to the popular “humor” website Cracked? After you read a few articles, you realize it’s the most pro-establishment piece of garbage propoganda site there is.

    Recently there was an article posted by the resident deity and guru John Cheese. This guy really prides himself on knowing what life is all about. And this article was called “5 Ways We Ruined the Occupy Wall Street Generation.” He seems to think that anyone with a beef about the way big business and government is run must be some kind of spoiled trust fund baby. And of course, all the hipster folks that flock to that site couldn’t help but smirk and repeat internet memes in agreement.

    Someone needs to send John Cheese this article. It’s just the simple truth. Anyone who has been conscious for the past decade (which may exclude a good portion of the populace) knows it’s true. And yet he seems to have had his head in the sand for the past decade. He seems to have this 1950’s view of America in which anyone with a job at Burger King can support a family of four.

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