Am I the only one who is getting sick to death of all the outsourcing-bashing going on in today's local and national political campaigns?
First of all, I wish someone would explain to the American public that “outsourcing” and “offshoring” are not the same thing. Maybe it is just semantics, but it bugs me!
Now to the meat of the issue. America is not just a democracy, but an industrialized society. We have gotten to the place we are today — whether or not it is actually a “good” place is up for debate — in large part due to the industrial and technological advances made by business pioneers like Henry Ford, J.P. Morgan, John D. Rockefeller, etc. These individuals built businesses and industries to provide products and services that promoted growth, convenience, luxury, and wealth. And they succeeded, perhaps even beyond their own expectations, because they traded value for value. A desired product or service in return for a fair, and profitable, compensation.
But somewhere along the line, things changed. Consumers began to demand more value for less, while workers and unions demanded greater compensation for the same or even fewer man hours of labor. After squeezing as much efficiency as possible out of their processes and suppliers and paring profits to a barely sustainable level, manufacturers were left with little choice but to seek alternative means of supporting their bottom line. This was not — and is not — a matter of greed, but simple economics. A business cannot survive if it is not profitable.
For decades now, American consumers have been more than happy to look the other way and ignore where products were made just as long as they got what they wanted — cheaply. I remember as a kid, there was just about no electronics product that wasn't “Made in Taiwan.” Today, it's “Made in China,” often for US-based businesses. Is it really so different? Why, now, is this being treated as some form of economic treason?
People lament the lost manufacturing jobs. Yes, the unemployment rate in the US is at tragic levels. But, that is not the fault of those who sent manufacturing offshore. What is their option? Maintain their manufacturing in the US and pay wages four to five times higher than in low-cost regions, pay exorbitant fuel and tax rates, and maintain huge legal teams to navigate the mire of regulations imposed by the government? Where do people expect that money to come from? There are only two options: off the bottom line or from the consumer's pocket in the form of higher prices.
If manufacturers carry the loss internally, they fail to live up to their fiduciary responsibilities to shareholders, fall behind in innovation because they do not have the resources to invest in R&D, and eventually go out of business. If they pass it along to the consumer, their sales plummet, profits decline, and they eventually go out of business. Which one of these scenarios serves the US economy or its workers? No wages, no tax revenue, and no product.
Instead of playing the role of victim and blaming those businesses that have “followed the money” offshore for the decline in US manufacturing dominance, perhaps it's time for the US worker and government to step up and admit the role they have played in forcing manufacturers to abandon their homeland.
Labor unions, once the defenders of the blue-collar worker, have grown so big, powerful, and demanding that they put a stranglehold on manufacturing management. The government's corporate tax structure, lopsided import/export policies, and inaction in the face of currency manipulation by our economic competitors have further disenfranchised the nation's largest manufacturing enterprises.
We reap what we sow; if you take away a business's ability to make money, you remove the incentive to innovate and produce. I can't say exactly what can be done to bring manufacturing back to the US, but I do believe that if you make it profitable, they will come.