Job Outsourcing: Hindering the Growth of the American Economy

Last week, the Food and Drug Administration announced a plan to begin outsourcing more than 300 jobs overseas, alarming Congressmen and informed Americans. Michigan Congressmen John Dingell and Bart Stupak spearheaded the opposition immediately after the announcement was made. While some economists feel job outsourcing actually increases wealth in the United States, outsourcing (pictured here with Mattel's toy company) in fact is hindering economic growth and fostering unethical practices among corporations.

Economists who are proponents of outsourcing stipulate that outsourcing is another form of free trade. It gives American companies a cheaper alternative to production and therefore stimulates the production of goods flowing into the United States. However, what would happen when people cannot afford the goods flowing into the country? Many of the jobs that are taken overseas could have been given to blue-collar workers inside the United States. Outsourcing "refers to the delegation of non-core operations from internal production to an external entity to perform specific tasks that the entity once performed itself." Federal Reserve Chairman Alan Greenspan believes that while the economy can recover from losing jobs overseas, it is "not without a high degree of pain for those caught in the job-losing segment of America's massive job-turnover process."

In fact, an even more frightening trend has happened in the last several years. Companies are now outsourcing white-collar jobs, as seen with the FDA's recent media storm.

Keeping this in mind, I cannot imagine how the FDA would consider transferring crucial jobs that handle the American people's safety to other nations with far inferior regulations. According to the Congressmen, the FDA has lost credibility in the last several years, including the tainted spinach scare only a year ago. "It is truly incomprehensible why the agency would again consider reducing the expertise and institutional knowledge of the FDA at a time with the FDA's credibility with the American people is at an all time low," said in a statement from Dingell and Stupak.

The National Treasury Employees Union said that the FDA came to them with a list of jobs it would be outsourcing, most likely to India. These jobs included lab technicians who handle food safety regulations. After outcries from the NTEU, the FDA suspended the closures of 13 facilities.

I believe that the Congressmen's investigation into the FDA is an interesting campaign. Both Dingell and Stupak are from the state of Michigan, a dominantly blue-collar state. Their states' interests lay in protecting the American worker and thus began their whistle-blowing probe into the FDA's outsourcing plan. Boston-based consultancy Forrester estimates that 400,000 service jobs have been lost to outsourcing since 2000, with jobs leaving at a rate of 12,000 to 15,000 per month, says John McCarthy, the company's director of research. Other estimates say up to 20,000 jobs a month may be moving overseas.

When corporations are looking to please shareholders and to increase their profit margins on their books, a cheaper alternative is always the right alternative. Having this goal is not conducive to safe and healthy regulations, nor towards a more ethical America. If the American people are buying Barbie products, are they buying a doll certified through American safety regulations or Chinese safety regulations? Profit can motivate people to do almost anything. (Pictured here is a map of the countries with the most job outsourcing).

Now that the FDA has made indications of moving jobs to other countries, whether that be actual safety jobs as Dingell and Stupak claim or administrative jobs as the FDA is now claiming, union representatives from the AFL-CIO are fighting on Capital Hill to keep labor inside the United States. One would hope that there would be a code of ethics, in the sense of stronger morals and upholding the value of each person, that all businesses would follow, where CEO's protected the little guys, working the factories and making the products.

Imagine a sort of fraternal system within the corporation where people took care of each other and looked out for everyone's best interests. This model seems unrealistic and far too ideal. Yet, what corporate America faces now is a greedy world where there is only a number one. There is not an easy answer to the outsourcing problem. If one company were to decide to keep its jobs in America, then it would be losing a lot more money compared to its competitors. It is a vicious cycle of competition.

With outsourcing, it is clear that cheaper labor makes more products. But are they better products? The old adage of quality versus quantity holds true here. If corporations held each other to higher standards of ethics, where the interests of people gained more importance than profit, then maybe Mattel, the FDA, and other companies would not have these global scandals.