This story is part of our U.S. Election 2012: Canadians in America series – expats talking about life and politics south of the border.
This week our Canadian expats debate the hot-button issue of ‘outsourcing’ which has dominated U.S. presidential campaiging, as Barack Obama and Mitt Romney accuse each other of sending jobs and business functions overseas. Our expats try to cut through campaign bluster and get to the truth about American manufacturing and outsourcing.
Colleen Pendergast, self-employed and former teacher in Nantucket, Mass.:
Both Mr. Obama and Mitt Romney point to each other as betrayers of the American people, but the truth is, outsourcing makes good business sense.
Americans do not want to hear it, but manufacturing is a dead industry. Politicians keep trying to revive it, but it is over. I feel for those who are middle-aged or older and have put years into the manufacturing industry, but those who are younger must think ahead and choose other, more relevant industries.
I am a tiny business owner and I plan to manufacture abroad in the near future simply because it makes financial sense.
Robert Slaven, actuarial living in Camarillo, California:
Here in the U.S., people have a very Jekyll-and-Hyde view of outsourcing from what I’ve seen.
Yes, they would like to see jobs stay in the U.S. But on the other hand, they flock to Wal-Mart so they can buy cheap products that were made in China or Vietnam or Bangladesh or Nicaragua.
If there are equivalent American-made products, they’re more expensive; and with things being so difficult economically for most Americans, they’ll buy the $10 Chinese-made T-shirt over the $30 American-made one.
Dennis Sifton, physician in Williamsburg, Virginia:
This term [outsourcing] has become, over the last week, a buzz-word that was created to try to denigrate Mitt Romney as being un-American.
The Obama administration has given loan guarantees and grants to many companies that have “outsourced” work to foreign countries.
The whole issue of “outsourcing” as it applies to this election does not have the legs to last through the campaign. It is merely a diversion from discussing the real issues such as unemployment, economic growth, budget deficits and out of control spending.
Stefan Neata, Wall Street investment banker in New York City:
If companies are not willing to outsource when the economic conditions dictate that they do so, they eventually lose market share to a more nimble competitor, and jobs that would have been outsourced would still be lost in the longer term.
In addition, we all benefiting from outsourcing every day by being able to buy cheaper products. To counteract the negative impact of outsourcing on those individuals that lose their jobs, the government should invest in education and training to ensure that Americans have the right skill-set to successfully compete with their Indian, Chinese or even Canadian counterparts.
Ultimately, the best and only long-term defence against outsourcing is having a skill-set that can’t be outsourced. This is not to say that a government has no role in protecting communities that are hard-hit by outsourcing (and, even, occasionally stemming off outsourcing by using various tax incentives), but Obama’s attacks against Romney are not about a government’s rightful role in helping Americans cope with outsourcing, but about whether it is “right” for a private company to outsource jobs in an attempt to stay competitive.
A competitive and successful American company, whether or not it outsources jobs, is good for America and good for the economy. President Obama should know this and, generally, I’ve found him to be more nuanced and honest in his views than most other American politicians. However, on this particular issue, he disappoints.
Jenny Zhang, advertising professional in Greenville, North Carolina:
Much has been written about the conditions at foreign-owned manufacturing plants and call-centres, little of it favourable.
Yet these jobs are having a pretty significant effect on the urbanization of the local population. Are these jobs actually sustainable? Or are they creating an subclass of manufacturing workers who had to leave their rural homes but who do not earn enough to truly ameliorate their situations?
Furthermore, if the experiences of my relatives still living in China are anything to go by, the influx of foreign capital and a stronger currency have led to a rise in cost of living without a corresponding rise in income.
Danielle Donovan lives and works in Birmingham, Alabama:
My fiance (an American) works for Oracle here in the U.S. When he started some thirteen years ago the bulk of his work was being a code monkey, but over the years more and more of that has been outsourced to India.
His dad is a computer programmer from back in the days when mainframes took entire rooms, and together they have been known to gripe about the fact that what used to be pages of beautifully written code has become a butchered mess they can hardly decipher all in the name of cheaper labour.
[Over the long-term] Americans are losing the ability to perform these skills and with that loss they are losing the ability to compete on a global scale. Regardless of party lines, both parties are equally guilty about enabling companies who outsource and neither party is particularly interested in actually solving the issue.
American politics is like a shell game, each candidate tries to distract the voter by pointing out the others shortcomings but in reality they are both just trying to hide the same crummy plastic ball.
Sherry Halfyard, business consultant in Tempe, Arizona:
The work search project I am connected with [the AARP Foundation, once known as the American Association of Retired Persons] is shifting to contracting an American call centre company for client management and support services.
In addition, one of our partner organizations, Tree Rings (seniors serving seniors) is hiring nationally, on a large scale, people age 50+ to work in regionally based call centres.
Although, customer service representatives in India and the Philippines earn on average $2,400 a year while North American equivalents earn $20,000 to $40,000 annually with potential to earn upwards of $90,000. Rationale is that an American operator can answer the calls quickly and potentially sell extra services. Due to cultural and language challenges most overseas calls take much longer and even with the labour costs are proving to be less effective.
Perhaps manufacturing will continue to be outsourced, however, the trend is that customer service jobs are coming home.
Meredith Nelson lives in Raleigh, North Carolina:
Outsourcing has been of serious concern in North Carolina: a major portion of the furniture making business has moved overseas.
Today, there is a resurgence of high-end furniture being made in the state. While the industry is by no means booming, it is certainly starting to hold its own.
Herein lies the conundrum: the North Carolina furniture industry is hiring, yet despite substantial retraining programs many jobs remain vacant – employers are having trouble finding people with the skills needed to fill vacant posts.
Outsourcing has changed the economic landscape. Even as jobs start coming back there is no guarantee that the work force, as it exists today, will be able to fill them.
Jeff Gebhart, IT manager in Oak Ridge, Tennessee:
[My] presence in the United States is, in large part, an “insourcing.”
I’ve worked for my present employer since 2002 in various capacities (as a contract consultant, later as an employee). I worked in our Calgary office until mid-2007, at which time I relocated to Tennessee. My job didn’t really change in any appreciable way, but my local address did.
So, instead of shipping my salary and benefits money up to Canada to pay for me, they now pay that money here in Tennessee. The money they were spending on me (my company is U.S.- based) is now put to work in the U.S. economy.
Brian Monkman, technology project manager in Mechanicsburg, Pennsylvania:
I originally entered the United States under a temporary visa (TN visa) that was a result of the North American Free Trade Agreement (NAFTA) treaty. So, to a number of folks I work with, and that live in the rather conservative part of Pennsylvania I live in, the job was awarded to someone who was not originally a resident of the U.S. Not the same as the job being outsourced, but not a very distant second.
In my job I deal with a significant number of companies that manufacture products. A significant majority of these companies ship the manufacturing process offshore as well as the software development process. This obviously impacts the U.S. job force.
The big question for me, and one that will prompt (I predict) contentious discussion, is: has globalization been a net positive or a net negative thing for the U.S.? It is important for all of us who are here as a result of a NAFTA-related visa or an H1-B [temporary foreign workers visa] to not forget that we are here as a direct result of the forces of globalization.
Some quotes have been edited and condensed.