Another Take on Offshore Outsourcing

Here is how corporate and government advocates (the Bush Administration) of massive offshoring of US jobs are trying to cover their tracks. They are saying that investment by foreign-owned companies in the US is the same thing as the offshoring of US jobs to foreign locations. I say maybe yes and maybe no. Read on.

Businesses worldwide have been engaged in foreign investment for years. That is not new, nor a great reason for concern. What is a concern is when the balance is off between US investment abroad and international business investment in the US. Offshoring of US jobs to foreign locations is creating an significant imbalance now because of the sheer number of jobs being shipped abroad. That is my major concern.

I just read an article about Tennessee economic development that is fodder to feed the debate out there during this tough national election year.

"During his first trip to Japan in 1987, Matt Kisber thought the governor of Hokkaido, a prefecture in the northern part of the country, might need a little help recognizing his home state of Tennessee."

"Being from Tennessee, I tried to pinpoint it for him — Jack Daniel's and Elvis," recalled Kisber, who at the time was a young member of the Tennessee General Assembly. And he said, "Oh, I know exactly where Tennessee is. You're the one taking all of our jobs."

"The reference, of course, was to the scores of Japanese companies that had set up operations in Tennessee in the previous decade. Of these, the most notable was Nissan, whose landmark decision in 1980 to build its first U.S. automotive assembly plant in Smyrna represented the largest foreign investment ever by a Japanese firm."

So, is offshoring to India and China today the same thing as Japanese investment in US production facilities over the past two decades the same thing? No, not if offshoring is basically a ploy by US companies to beam jobs anywhere anytime to get the work done in the cheapest fashion possible. And no if the outsourcing creates devastating large-scale job dislocations for domestic workers. That is where we need to be careful. It's the scale that concerns me the most.

Enough of this rant. Here for more.