Tuesday, January 25, 2005

Job Outsourcing, Are We Dying?

An article by CNN’s Lou Dobbs called, “Is Outsourcing Killing Jobs” in Optimize Magazine (http://www.optimizemag.com/showArticle.jhtml?articleID=30000295 ) starts with the premise that the American middle class is being forced to compete with cheap foreign labor which will result in systemic job loss and a reduction in our standard of living. I beg to differ.

What has been overlooked in the midst of the outsourcing debate has been the consumer. Both the American consumer and the international consumer. The American middle class consumer, the very people who are claimed to be at greatest risk for losing their jobs are the very same people who reap the advantage of lower cost goods. The international consumer, who is not having world class goods being made in or near their own markets are now more able to afford and consume those goods as their costs are reduced.

We all know that the movement of manufacturing is about reducing cost, but not much is said about that movement with reduced cost is about supplying the markets in to which the production is moved. Having worked with several global companies who have moved some of their production to China, those companies have realized that the Chinese market is able to absorb a majority of the production created there.

That is not true in all cases but is a critical point in the discussion. It is likened to the 'postponement' process in supply chain as you postpone the final assembly or configuration of your good until it is as close to the consumer as possible. Outsourcing in a large part is purely that. This is NOT to say that another large part of outsourcing is about lowering operating costs for goods to be sent back into the US and other industrialized countries.

Further, Americans have had a lot to do with this phenomenon themselves. How many Americans are driving Toyotas, Nissans, Hondas and listen to Sony's and play on Play Stations?

If those who seriously want to make noise about losing American jobs, ask them how many goods they have in their homes and what cars they drive that do not have "Made in America" stamped on them.

If you want jobs in your community, then shop in your community (and that does NOT include some of the large box stores that claim to promote American goods). If those who are genuinely concerned about this issue from a pure job loss perspective are willing to take action, the only message that can be sent is to have people buy nothing but American made for a day or a week or a month...that would send a message that was credible.

But globalization has a momentum that not even the nay-sayers can stop at this point, and they should not for it is a good thing. Spreading jobs and economic growth is likened to the President speaking about spreading liberty. It's only with economic growth and liberty that people begin to build lives and families and futures that will remove the "I have nothing to lose" situations that breed hate and terrorism around the world.

Those like Lou Dobbs, who are still trying to ring this alarm for all of us do not realize the reality of the situation. They have not been in China, Malaysia, Thailand, India recently or if they have they were to busy talking to really see what is going on.

Have any of the falling-sky callers actually been in the factories? If they had, they would know that the majority of the JOBS ARE ALREADY GONE!.

Most Chinese factories in the last five years have been running at between 20% and 50% of capacity as their workers and their management come up the learning curve. In the next five years they will move up to 80%-85% and what then? What then is not only will the factories supply the export market, but they will be gearing up to meet the needs of the largest growing consumer market in the world, their own. India is doing the same thing. Get over it, its already done, the jobs are gone (in the most part).

As for America, we must educate and train our people so that innovation and growth again are the foundation of our economy. American history is all about transition from one era to the next, we have endured pain in each of those transitions and we need to offer training and support to those most affected. But bringing back jobs already gone is senseless.

We need to take advantage of our graying workforce and use them as mentors, teachers and counselors to the new generations that will continue our world leadership in creativity, productivity and innovation. These tenets are the core of American business and have sustained us as world leaders many generations before and will many generations after the current transition.

Globalization is not a risk, but a wonderful opportunity to continue the course that has kept us who we are, Americans. Transition is the American way and there is no reason to believe that our skills in dealing with this challenge will be any less to the task than they have been for several hundred years.

Without risk, we are not at our best, so bring it on; who we are will not desert us now.



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