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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.

Become A Teacher? 10 Examples That Show Why Becoming A Teacher Is A Dead End In This Economy

Today budget cutters are on the rampage from coast to coast and often one of their first targets is public school teachers. What we have witnessed recently in Wisconsin is just one example of this. The truth is that you do not want to become a teacher if you want to have financial security in America today. Teacher salaries are being slashed from sea to shining sea. But to a certain extent the teachers that are having their wages cut are the fortunate ones. There are thousands upon thousands of teachers that have already been laid off, and there are tens of thousands more that are about to be laid off. It is absolutely brutal out there right now. So if you are thinking about becoming a teacher you might want to think twice. Not that there are a whole lot of other jobs that are more secure right now. The truth is that there is no such thing as a “safe job” in America today.

It is very unfortunate that what is going on right now is going to scare so many young people away from becoming a teacher because the next generation could definitely use some quality teachers.

But the truth is that it is getting really hard to honestly recommend that anyone become a teacher at this point. Just consider some of the following news stories that we have seen around the nation recently….

#1 In Providence, Rhode Island the school district plans to send out dismissal notices to every single one of its 1,926 teachers.

#2 Michigan has just approved a plan to shut down nearly half of the public schools in Detroit.  Under the plan, 70 schools will be closed and 72 will continue operating.

#3 In New Jersey, Governor Chris Christie has laid off thousands of teachers and he cut a billion dollars from the state education budget.

#4 Bills in Wisconsin, Ohio, Tennessee, Indiana and Idaho would either significantly alter or completely take away the collective bargaining rights of public school teachers.

#5 The eyes of the whole country are on Wisconsin right now.  Teachers there are very alarmed about the $900 million in cuts to school funding over the next two years that are being proposed.

#6 Clay Robison, a spokesman for the Texas State Teachers Association, recently said that his organization is projecting that 100,000 school employees in the state of Texas could lose their jobs.

#7 The current plan is for more than 4,500 New York City school teachers to be laid off after this current school years ends.  This will be the most significant teacher layoffs in New York since the 1970s.

#8 In Los Angeles, more than 5,000 teachers will be receiving preliminary layoff notices due to budget cuts.

#9 Nevada Governor Brian Sandoval is being deeply criticized for the teacher pay cuts that he is proposing.

#10 StudentsFirst.org is projecting that 161,000 teachers across the United States are in danger of losing their jobs this year alone.

So in light of the facts above, should we advise any of our young people to try to become a teacher?

The worst thing about all this for young teachers is that in many areas of the country there is a rule that says the last teachers hired are the first ones that get laid off.

That is another huge incentive for young people not to choose teaching as a profession.

So why are so many teacher layoffs happening?

Well, the truth is that most of our state and local governments are very deep in debt and have run out of money.

State and local government debt has reached at an all-time high of 22 percent of U.S. GDP, and hordes of state and local governments are teetering on the brink of insolvency at this point.

When there is no more money, the cuts have to come from somewhere.  It is just really unfortunate that so many teachers are going to be put out onto the street.

People that have gone into the teaching profession have all spent a lot of time and money to get the education that they need to teach.  If they are told that they can’t do that anymore, what are they supposed to do?

Most of the time when teachers are forced out of the profession they end up having to take jobs that pay much less.  In this economy, many ex-teachers will not be able to find jobs at all.  Today, one out of every seven Americans is on food stamps, and sadly many teachers may soon be joining them.

So why don’t we just raise taxes so that all of these teachers can keep their jobs?  Well, the truth is that middle class Americans are already being taxed into oblivion.  When you add up the dozens and dozens of different taxes that Americans pay each year the overall tax burden is absolutely frightening.  There is only so much that you can squeeze out of the American people.

No, the truth is that the American people are taxed way too much already, and the big corporations and the ultra-wealthy have become experts at avoiding taxation.  Our current tax system needs to be completely scrapped and replaced with something entirely new.

If our state and local governments had not been so addicted to debt, and if our economy had been managed correctly and if about a hundred other things had been done differently we would not be having these problems.

But here we are.

Unfortunately, there does not seem to be any easy answers.

Or are there some solutions that most of us have been overlooking?  What do you all think?  What should be done about all of the teacher layoffs that are taking place all over the country?  Please feel free to leave a comment with your thoughts below….

18 Signs That America Is Rotting Right In Front Of Our Eyes

Sometimes it isn’t necessary to quote facts and figures about government debt, unemployment and the trade deficit in order to convey how badly America is decaying.  The truth is that millions of Americans can watch America rotting right in front of their eyes by stepping out on their front porches.  Record numbers of homes have been foreclosed on and in some of the most run down cities as many as a third of all houses have been abandoned.  Unemployment remains at depressingly high levels and the number of Americans on food stamps continues to set new records month after month.  Due to severe budget cuts, class sizes are exploding and school programs are being eliminated.  In some areas of the U.S. schools are even going to four day weeks.  With little to no funding available, bridges are crumbling and street lights are being turned off in many communities.  In some areas, asphalt roads are actually being ground up and turned back into gravel roads because they are less expensive to maintain.  There aren’t even as many police available to patrol America’s decaying cities because budget problems have forced local communities across the U.S. to lay off tens of thousands of officers.

Once upon a time, the American people worked feverishly to construct beautiful, shining communities from coast to coast.  But now we get to watch those communities literally crumble and decay in slow motion.  Nothing lasts forever, but for those of us who truly love America it is an incredibly sad thing to witness what is now happening to the great nation that our forefathers built.

The following are 18 signs that America is rotting right in front of our eyes….

1 – Due to extreme budget cuts, school systems across the United States are requiring their students to bring more supplies with them than ever this year.  In Moody, Alabama elementary school students are being told to bring paper towels, garbage bags and liquid soap with them to school.  At Pauoa Elementary School in Honolulu, Hawaii all students are being required to show up with a four-pack of toilet paper.

2 – According to the American Association of School Administrators, 48 percent of all U.S. school districts are reporting budget cuts of 10 percent or less for the upcoming school year, and 30 percent of all U.S. school districts are reporting cuts of 11 to 25 percent.

3 – In Chicago, drastic budget cuts could result in an average class size of 37 students.

4 – The governor of Hawaii has completely shut down that state’s schools on Fridays – moving teachers and students to a four day week.

5 – According to the Federal Highway Administration, approximately a third of America’s major roadways are already in substandard condition.

6 – All over the United States, asphalt roads are being ground up and are being replaced with gravel because it is cheaper to maintain.  The state of South Dakota has transformed over 100 miles of asphalt road into gravel over the past year, and 38 out of the 83 counties in the state of Michigan have now turned some of their asphalt roads into gravel roads.

7 – According to the U.S. Department of Transportation, more than 25 percent of America’s nearly 600,000 bridges need significant repairs or are burdened with more traffic than they were designed to carry.

8 – In a desperate attempt to save money, the city of Colorado Springs turned off a third of its streetlights and put its police helicopters up for auction.

9 – The state of Arizona has eliminated funding for full-day kindergarten and has shut down a number of state parks.

10 – Over the past year, approximately 100 of New York’s state parks and historic sites have had to cut services and reduce hours.

11 – In Georgia, the county of Clayton recently eliminated its entire public bus system in order to save 8 million dollars.

12 – Elsewhere in Georgia, 30,000 people recently turned out to pick up only 13,000 applications for government-subsidized housing.   A near-riot ensued and 62 people were left injured.  The amazing thing is that all of this commotion was just to get on a waiting list.  There are no aid vouchers even available at this time.

13– In the city of Philadelphia, rolling fire station “brown outs” recently cost a 12 year old autistic boy named Frank Marasco his life.

14– Oakland, California Police Chief Anthony Batts says that due to severe budget cuts there are a number of crimes that his department will simply not be able to respond to any longer.  The crimes that the Oakland police will no longer be responding to include grand theft, burglary, car wrecks, identity theft and vandalism.

15– The sheriff’s department in Ashtabula County, Ohio has been slashed from 112 to 49 deputies, and there is now just one vehicle remaining to patrol all 720 square miles of the county.

16 – Of 315 municipalities the New Jersey State Policemen’s union recently canvassed, more than half indicated that they were planning to lay off police officers.

17 – Not that the criminals are doing that much better.  Things have gotten so bad in Camden, New Jersey that not even the drug dealers are spending their money anymore.

18 – Almost everyone knows someone who has been severely impacted by this economic downturn.  A new Rasmussen Reports national telephone survey has found that 81 percent of American adults know someone who is out of work and looking for a job.

So can’t the states just step up and start spending more money and fix these things?

Well, no.  The truth is that the states are absolutely broke.  Quite a few of the states are actually on the verge of default, and there is no getting around the fact that budget cuts that are much more severe are going to be required in the years ahead.

So can’t the U.S. government step in and bail out the states?

Well, yes, but as we have detailed previously, the U.S. government is literally drowning in a sea of red ink.  The U.S. government is already spending an amount of money equivalent to approximately 25.4 percent of GDP this year.

How much more money can the U.S. government possibly spend?

To get an idea of just how bad things are already, the IMF says that in order to fix the U.S. government budget deficit, taxes need to be doubled on every single U.S. citizen.

Are you ready to pay double the taxes?

No matter how you slice it, the U.S. is in a massive amount of financial trouble and the American people are starting to realize this fact.  In fact, one new poll found that nearly two-thirds of Americans believe that the U.S. economy will get worse before it gets better.

But unfortunately things are not going to get “better” – at least in the long-term.  The decay and the rot that have already set in are only going to get worse.

These problems did not appear overnight and they are not going to be solved overnight.  Our leaders have been making very bad decisions for decades, and all of those bad decisions are starting to catch up with us.

But perhaps you disagree.  Feel free to tell us what you think in the comments section below….

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