U.S. Workers Need Not Apply

By Marty Nemko

There’s an unspoken reason why so many job seekers are having a tough time finding a job: companies don’t like American workers. Compared with workers in such countries as India, China, and the Philippines, American workers are much more expensive and likely to sue the employer.

That’s why, according to a recent Business Week article, many leading corporations are starting to ship jobs overseas, especially if the work can be done on over the Internet or on a telephone. When you call AOL’s or Dell Computer’s technical support, you’re probably talking to someone in India—where highly skilled workers are thrilled to be earning $10,000 a year. (The average annual income in India is $500.) Bank of America recently downsized entire engineering departments—they’re shipping the work to China and India. Insurance firms are starting to outsource their back office work Ireland and to Asian countries. US architecture firms farm out projects to architects in Eastern Europe. Procter and Gamble, the quintessential American company, has its U.S. tax returns done by accountants in the Philippines.

It’s easy to understand why a company would want to ship jobs overseas. Why should a company be limited to the best talent in the Bay Area when they can get the best talent in the world at a 50+% discount? You can bet the trend will accelerate.

Implications for society

American corporations and their shareholders will enjoy increased profits.
The cost of products and services provided by US companies will decline.
The US standard of living will decline.

Our first reaction to the latter is negative, but liberals should applaud it because it applies their core principle: redistribute the wealth: in this case, from Americans, who enjoy a high standard of living, to people in nations where the average person earns less than $1,000 a year.

But our government—Republican or Democrat—is unlikely to abandon chauvinism in favor of one-world-citizenry. So I would imagine that the government will soon enact one or more of the following to make U.S. workers more competitive:

Make U.S. corporations pay a reverse tariff for each job shipped overseas.
Make U.S. corporations pay federal and state income taxes for their overseas workers.
Tort reform: Place some limits on American employees’ right to sue employers. An ever increasing number of laid-off Americans sue their employer for wrongful termination, especially if the person is in a protected class: woman, minority, or over 40. Although 90% of these claims are thrown out, the cost of defense (not to mention the stress on the accused supervisors) is great.
Invest heavily in U.S. worker training to attempt to make second- and third-tier American workers competitive with those in countries such as India and China.

Implications for job seekers

The very best American workers probably won’t be affected. Some top jobs need to be done locally, and U.S. companies don’t mind paying big bucks to a small percentage of its workforce. But average workers may need to leave the Bay Area for areas less saturated with able workers.
If you’re entrepreneurial, consider simple self-employment in which the product or service could not be done overseas: a small chain of espresso carts, oil changing in corporate parking lots, a handyperson service, etc.
Capitalize on the trend and work for (or start) an employment agency that specializes in providing US companies with overseas workers.
Look for a job in federal, state, county, or city government. Government is one of the few sectors that is hiring. Also, government is likely immune from the hire-overseas trend. No matter what the cost savings, it’s hard to imagine the government hiring foreigners, leaving Americans out of work. The government couldn’t tolerate headlines such as, “To save money and get better workers, Feds hire 10,000 in Beijing.”