By Elliot Clark
I love politicians. They mean well. There is no systemic problem that cannot be fixed with a stage and, of course, a microphone if you simply identify it, call it out and have at it. Today we are after the evil nemesis of American prosperity; dare I name that which shall not be spoken: OUTSOURCING. Yesterday President Obama announced the Insourcing American Jobs Forum on “insourcing” and a program to reward companies that bring jobs back to the land of the free and the home of the brave. Yes, in an evil attempt to stay competitive US businesses sent jobs overseas. They did this to enhance profits and then, watch this, they distributed the profits to shareholders in the form of dividends. Why would they do this?
How about they had no choice? Particularly, in the tech sector America is running out of technical talent.
I am not speaking for all outsourcing, but a great deal of outsourcing is related to product development and engineering. Some is customer service support and infrastructure. We need to look at this as it does, in fact relate to unemployment. In February 2011 according to the U.S. Department of Labor, unemployment among college graduates was 4.2%. Nowhere near the national average of 9% reported at the time. Unemployment amongst people who did not have a high school diploma was 14.2%. So there was a very high rate of employment among America’s most educated. There is worker displacement in any economy as technology changes but for the most part the educated are working. In technology professions the unemployment rate is below 4.2% approaching 2% in some areas of the country. The level of graduates from U.S engineering schools have dropped in the last twenty years while China and India have increased their educational graduation rates and focused on teaching their graduates English. They do this to attract Western companies desperate for talent to their countries.
Hmm, interesting strategy. These countries are trying to be competitive in a way that gives potential labor markets resources that they need. Maybe China and India have figured out that vilifying outsourcing providers and companies that outsource is too negative and, instead, they should adapt their educational systems to global needs and focus on the workforce to meet the requirements of global businesses. Lenovo and Infosys have thousands of workers around the world but have not been slammed by their governments recently. In fact, they are held up as examples of a new global world order.
It used to be that students came from all of over the globe to train in America and stayed for the lifestyle and freedom we offered. Now they either do not come or they train here and return to their native country. This brain drain is part of the trend as well.
You can reward companies for “insourcing” but it is no more effective in the long run than trying to command the tide. Either we have the talent or we do not. It would be better to work with companies on how to optimize the productivity of the workforces they have in place right now as one issue and take the issue of education and improvement as a separate issue. That will be how it debated at the upcoming Workforce Congress April 30 to May 2 in Washington, D.C. at the HRO Today Forum at the Gaylord National. They are not one issue and treating it as one is a classic oversimplification. I welcome the administration to show up and argue the numbers. We have been “outsourcing” education far longer than jobs. That is where the epidemic started.