Can we afford to ship jobs overseas?
In 1990, I returned to college full time to obtain an undergraduate degree at Eastern Michigan University. In 1991, I was then able to go to graduate school with the help of student loans through the government-sponsored loan program commonly known as Sallie Mae.
Six months after graduation, I faithfully paid on my loan the specified amount each month. Then in 2001, I lost my job and decided to take forbearance. This allowed putting off paying on my loan until I could get my finances more stable. The interested still accumulated. I understood what I was doing, but finances were tight, so it was a calculated decision. I restarted paying my loan after about a year and again made regular payments. All the time, I was thinking that this was a federal guaranteed program that helped Americans and employed Americans.
MIchael Patterson: if we first don't take care of our family, then how can we take care of others?
Now I know that in this day and age it is not unusual to find yourself speaking to someone in a Far East Asian country to resolve a problem with a product you recently bought. But it got me to thinking. Why is the United States government insuring loans from a for-profit corporation that has a policy to ship valuable jobs to another country? I mean, this not an undesirable way to make a living. And it’s not because we don’t have an intelligent workforce to fill these jobs.
About a year or so ago, I had to call my cell phone company to resolve a technical issue. It took a couple of calls. In the first call I spoke with someone in India. The problem was not resolved so I called again and spoke with a very nice woman who worked in West Virginia. Once we resolved the problem I said to her that she should be aware that her company is shipping her job overseas.
Today I called LL Bean to check on an order I had placed on their website. It turned out that I had not completed the order process on the computer so the order was never placed. I first spoke to Judy, then Robin. Robin took the time to help me find the product I wanted, give me the order numbers and then wait until I went to my car to get my credit card (I hate to carry my wallet).
I asked Robin where she was located. She said she is about a mile from the main headquarters of LL Bean in Maine. She then told me that they had consultants come in to evaluate their business. The No. 1 priority this consulting company told them is to NOT ship their call and order center overseas.
I know why they came to that conclusion. It’s because of the excellent service you receive when you talk to someone that is paid a decent wage, has some level of job security, and has a management that looks after their employees versus the bottom line. I will continue to do business with LL Bean, but the cell company that shipped its call center overseas is on my Do Not Call list.
So what does all of this have to do with Sallie Mae? In my humble opinion the government should not be backing for-profit corporations that ship jobs overseas. I don’t think this is rocket science. It just wise for our government to support corporations that creates jobs in our country.
Now some would say that I am for big government. Or the government over regulates now. Or if the government put restrictions on companies they do business with by demanding that they do not ship jobs overseas then this is protectionism.
I once talked with an economics professor from the University of Michigan who stated it was the right thing to ship jobs overseas because those countries have a lower standard of living and they should share in the economic pie. I must admit that I could agree with her except when I drive to Jackson, Flint, or Detroit and see cities that are turning into third world countries, then I must take pause and think,
You may know that recently a bill to offer tax incentives to companies that create jobs in our country was stalled because of politics, or protectionism of big corporations, or both. Now maybe I’m not as smart as most when it comes to economics. But when I look around Ann Arbor and see so many houses up for sale, or look in the paper at the notices of foreclosure, or look at my brother-in-law who had 25 years in at GM and was laid off with one-third of his pension taken away, then I can’t seem to understand how what we have done in the recent past has worked.
Maybe someone out there can help me. Because I just don’t get it.
Michael J. Patterson is a licensed psychotherapist based out of Chelsea. He received his graduate degree from the University of Michigan. He is married and has a 10-year-old daughter.
Comments
AlphaAlpha
Mon, Oct 18, 2010 : 7:57 p.m.
Right on RayA2. It is a shame that so many are clueless about the realities of world trade; politics, economics. Evidently these topics are not addressed in most schools today; it's a shame because our wealth is ours to lose, and it's being lost now. The average Yankee is clueless as to how well off they are; regrettably, ignorance generally breeds poverty.
RayA2
Mon, Oct 18, 2010 : 12:14 p.m.
The U.S. has a very large trade deficit with countries like China and India. That is simply because they sell us a great deal more than we sell them. Anyone, like myself, who has worked with international trade laws knows how especially China, which is NOT a market economy, manipulates every facit of its production to make certain that they export more than they import. They are completely unscrupulous and will circumvent any international trade agreement that doesn't work in their favor. So many of the commenters to this article seem to think that the international market for products and services is the best match of supply and demand and theoretically this might be true. The problem with that line of thinking however is that it assumes every country is willing to accept what the market provides, and this is grossly mistaken.
a2parentof4
Mon, Oct 18, 2010 : 7:09 a.m.
This is not a simple issue and it's a bit insulting to see opinions that "all we have to do is stop outsourcing and America's problems will go away". Or even trying to pin Rick Snyder for the woes of this state. This is a very complex issue involving domestic policy, monetary policies, global economics and even human rights issues, just to name a few. America isn't the center of the universe and yet at the same time corporations should be held to a certain standard for support of their products. I certainly don't have "the answer" nor do I expect it to pop up in these comments, but it would be nice to have more actual discourse instead of more mud slinging. Most of you have made comments that are helpful to sort things out, but please stop spewing anger instead of information and logic. (Here's another side of the story: http://online.wsj.com/article/SB10001424052748704696304575537983245805688.html)
trespass
Mon, Oct 18, 2010 : 6:13 a.m.
The University of Michigan and Rick Snyder's company Discera are also sending jobs to China. Although Discera's China office is small, the companys own literature says that the market for Discera's technology is $3.5 billion. They are a "fabless" semiconductor company, which means they don't fabricate (produce) their own chips. They will make money by convincing companies that produce chips, or integrated circuits, to use their technology rather than using quartz crystal technology or other technologies. Thus, the engineers that are "sales people" are showing Chinese companies how to integrate Discera's technology into their products and compete with American companies. Even if a particular company doesn't have an American competitor, currently, if the technology were kept in America it would make our semiconductor companies more competitive. The Discera technology is described as "disruptive" (i.e. such a breakthrough that it will disrupt the current market). Thus, the decision to market the technology to Chinese companies will impact jobs in Ameica. This is only one of many technologies that have been developed at the University of Michigan, funded by federal grants paid for by US taxpayers that have been transferred to Chinese companies. Since Snyder has set the precedent with his company, he would be in no position to tell the University of Michigan that they should stop sending American technology to China. I would also make the point that Discera's technology has important military applications. One of the first deals that Discera announced was for a subsidiary of Tyco to produce an important component of telemetry systems for smart munitions.
Speechless
Sun, Oct 17, 2010 : 10:17 p.m.
From the article: "... I once talked with an economics professor from the University of Michigan who stated it was the right thing to ship jobs overseas because those countries have a lower standard of living and they should share in the economic pie...." There is a certain amount of truth that can be parsed from that professor's attempt to rationalize a moral basis for human exploitation. First, we do now live in a global society, and cannot hope to cordon off our own little region or our country from the rest of the world. Second, the considerable poverty in the world should be directly addressed with practical, economic solutions. In a world becoming more interconnected, security and material well-being for our region is increasingly linked to that of every other region on the planet. The big lie within the professor's rationalization is the unspoken assumption that job outsourcing can effectively address economic imbalances between different regions of the world. What's missing is a global social contract or international framework that directs economic activity toward the highest common denominator in ethical business behavior and egalitarian values. International agreements such as NAFTA increase exploitation by explicitly legislating the lowest common denominator, making third-world squalor a desirable feature for neo-colonialist corporations seeking windfalll profits through dirt-cheap labor with few, if any, environmental regulations to follow. NAFTA would be a very different creature if, for example, it required Mexico to follow Canadian labor and environmental standards, rather than placing pressure on Canada to lower those standards out of "fairness" to Mexico.
djacks24
Sun, Oct 17, 2010 : 9:50 p.m.
"I mean, this not an undesirable way to make a living. And its not because we dont have an intelligent workforce to fill these jobs." I did local tech support at a 400 person call center and it absolutely sucks! I'd get calls all the time even for things they knew we didn't support just so they could talk to someone in the US. But forgive me if I'm not as appalled to see these jobs go. But on the contrary, if I didn't have something more desirable to go to, I'd gladly go back to doing it over unemployment! The pay was not great but surprisingly the benefits were good. But not good enough to be tethered to that phone taking call after call of mostly pissed off people. It made me realize in large part how rude Americans are to customer service people, especially over the phone when we can't see the persons face. On the other hand, 20 years and still paying back student loans? I'm glad my undergrad is paid in full. I was considering grad school but I would need to incur loans for that, so in this economy I haven't been able to justify the return on investment. Thanks for reinforcing that decision for me.
AlphaAlpha
Sun, Oct 17, 2010 : 6:57 p.m.
It's a simple question. It's OK if you don't have an answer. It's easy to showboat and spew catchy slogans.
Milton Shift
Sun, Oct 17, 2010 : 6:46 p.m.
Join a suicide cult and await the coming of the mothership. What do you think?
AlphaAlpha
Sun, Oct 17, 2010 : 6:25 p.m.
Then what?
Milton Shift
Sun, Oct 17, 2010 : 4:59 p.m.
Step one is not demanding that any worker outside of your place of employment take wage cuts. Not demanding that Chinese workers be stomped because they're bad "commies" etc.
AlphaAlpha
Sun, Oct 17, 2010 : 3:51 p.m.
So, Mr. Shift, do you have any suggestions as to how we can "stand together"?
Milton Shift
Sun, Oct 17, 2010 : 3:35 p.m.
We have to stand in solidarity with the Chinese workers in their fight for better wages. Their loss is our loss - we can expect nothing but fewer and crappier jobs. Internationalism is the only solution to this problem. The economy is irreversibly globalized, for better or for worse, and capital is approaching complete fluidity. It flows to wherever has the lowest corporate taxes, the highest worker taxes, and the lowest wages/benefits/protections. We MUST stand together or we will be picked apart, turned against each other, and crushed by each other. Guess who benefits when this happens?
5c0++ H4d13y
Sun, Oct 17, 2010 : 3:35 p.m.
I think at the same time that India and China stop buying software from the US... other countries should stop buying GE gas turbine power generation systems from the US. That way my brother who currently derives some of his income by making gas turbines for other countries can feel good that he lost his job when those countries decided to "buy euro" or "by sino" or whatever. Every country should be a little fiefdom unto itself! It's the clear way to prosperity!
talker
Sun, Oct 17, 2010 : 2:57 p.m.
Unless someone has specific information that the writer still has student loans outstanding, then attacking him for shopping at LL Bean isn't warranted. It's good to support workers in Maine. It's even better to support workers in Ann Arbor. Yesterday I was looking at winter jackets at TJ Maxx. Several had labels listing the place and year the company was founded. It's sad to read that a U.S. company proudly listing its roots also lists "Made in China" on labels. It's outrageous that company officers want the praise of longevity, but have eliminated the jobs of American workers. This trend has been accelerating over the past 20 years. We have structural unemployment and underemployment that hurts rank and file workers while those who make outsourcing decisions earn generous bonuses for eliminating American jobs. When I hear people who complain about unemployment benefit extensions and who insist that the unemployed can find work, I wonder if they believe in work for any earnings, even if it means eliminating the minimum wage, as some politicians this year have stated should be done. The structural problems we have go far beyond any one politician. Changing who's in office won't solve the problem for those hurting the most. Some of the t.v. ads aimed at replacing politicians are paid for by overseas corporations and governments who gain from more outsourcing from America and more unemployment and underemployment in America. This is a serious issue.
Mr.Scientist
Sun, Oct 17, 2010 : 2:26 p.m.
Milton is right on - the world has changed and we have to think globally. I don't care very much where the customer service representative sits - next door or in India. But what I do care about is customer service and unfortunately I have had similar experiences as Patterson. I found myself talking to a very rude person in India when calling a US company and he ended up cursing me and after I hung up on him he had the audacity to call back and threaten me! But we should not confuse two very distinct issues: one being customer service and the other being the global economy. I do believe there is a way to provide good customer service from outside the US.
Bablat
Sun, Oct 17, 2010 : 2:02 p.m.
Maybe instead of placing orders with LL Bean you should pay your student loans first so the rest of us would not have to pay them. Sallie Mae will be able then to afford to keep their customer service in the US.
5c0++ H4d13y
Sun, Oct 17, 2010 : 11:33 a.m.
I think India and China should insource all their own software development and stop buying Microsoft Windows and Office and Exchange and the rest of it.
AlphaAlpha
Sun, Oct 17, 2010 : 10:45 a.m.
It's interesting that the WTO is rarely mentioned in this context. They are largely responsible for writing trade laws encouraging offshoring; the globalization we are experiencing is a direct result of those laws. Is it a coincidence that both major parties fully support WTO goals? It would seem so, until campaign contributions are considered.
AnnArBo
Sun, Oct 17, 2010 : 9:24 a.m.
Maybe this will help you understand some facts and part of the reason for companies going overseas; http://www.factcheck.org/askfactcheck/what_kind_of_tax_breaks_does_the.html
Milton Shift
Sun, Oct 17, 2010 : 6:58 a.m.
This is the case for internationalism. What happens to workers in China, Honduras, etc. affects us directly. When their labor rights are crushed, and their wages forced down, it puts downward pressure on our wages as our jobs disappear overseas. In this globalized world it is no longer possible to only think of our local community. Somehow, we must find a way to work together, as we are now all in the same boat.