Jobs Killers Hurt America and Americans

Outsourcing has been with the world for thousands of years.  The sale of food, tools, and other goods from one community to another is a form of outsourcing. If you don't grow your own food then you outsource its acquisition. Outsourcing is a necessary facet of every business and it is practiced by every company because nobody can do it all.  Offshore Outsourcing as practiced by American corporations, or as it is simply called, Offshoring is simply anti-American.  It happens when the business believes it is so important that the workers and the country in which it is franchised, no longer matter.  

There were US companies in the 1800s and 1900s who were vertically integrated and thus, they did it all. There was little outsourcing in these companies. Rugged individualism was the credo of the day, and if you could not do it all, you could not compete.  These companies took care of their own production, mining, manufacturing from raw materials, building finished goods, shipping the goods, and they sold the end products in their own stores. Many of these companies even went so far as insuring themselves; handled their own bookkeeping and taxes; had their own lawyers etc.  Some even designed and built their own buildings as it was viewed as the proper way to expand their enterprises.  To do that, they required a major diversity of talent.

Eventually, in American History, it no longer was a matter of pride that a company did it all.  It became very difficult to have all the talent required in one business and so companies began to concentrate on what are called their core competencies.  For example, furniture manufacturers began to get their wood from loggers rather than maintain their own forests. Other manufacturers began to bring in raw materials that were in a more finished state from contractors -- steel sheets rather than iron ore.  This is how it began.

As service companies began to emerge, the manufacturing companies found it more productive to do business with these firms and gain a number of other services.  Firms could never be the best in specific areas that were adjunct to their core businesses by relying only on in-house expertise.  In the industrial revolution, there was a large growth in the service sector as manufacturers began to purchase needed skills from companies who were experts in the field. This was the first form of outsourcing.

Companies needed insurance services, architecture and engineering services, legal and accounting services, and many others. At this time in the U.S., the companies performing the outsourced work were almost always located in the U.S., and most often in the same city, just like their customers. Therefore it was not against national interests to outsource parts of the business to such domestic firms.

Corporate Globalization Takes Outsourcing Offshore
As the economy became more global as fast ships and large airplanes and fast voice and data communications channels were established, this permitted people and goods and information to be moved rapidly from country to country. Because of these advances, it became feasible to move activities that were once done on-shore in the U.S. to a foreign country, off shore. This process is known as offshore outsourcing or simply, as noted previously, "offshoring."

At first it was an experiment but the ingredients of success were in the cards.  As relationships were formed in developing countries, it became easier and easier for the next company to do the same thing.  Facilitator service companies emerged who would set up the whole offshore deal for any company that did not know how to get it done. In the beginning of course, the outsourcing channels were not greased as well as they are today.

Companies of today, who are ready to outsource no longer have to do the bull-work themselves. They outsource to "facilitator companies,"  such as IBM to gain the outsourcing / offshoring expertise. There are many such firms that are now in place to expedite the entire process. For the US companies that employ such offshoring avenues, it does help that they write their checks for offshoring to companies such as IBM so that it does not appear to the uninformed that they are un-American. Yet, they are un-American and IBM is un-American and it is time we call them out and show them all for what they are.

In the last ten to twenty years the notion of offshoring has become as commonplace as outsourcing on-shore had been and it has gotten more and more positive press in the business community.  It has become very popular,  especially in large companies in which business titans and the stockholders believe their company is as modern as the times permit.  Additionally, the big consulting firms have been recommending offshoring as a solution for bad American management for many years now.

In some ways offshoring it has now become a corporate management status symbol besides a way of doing business. Companies that have decided to stay American are belittled sometimes by their elite peers and industry moguls for not having taken their businesses overseas.  Another little told secret is that even though the corporate miffintiffs would argue against this premise, offshoring often provides little benefit for the sending country. 

Low Tech Were the First Jobs to Go 

The first types of products to be manufactured overseas were the low-tech items such as toys, shoes and apparel goods. Eventually, higher value items like high-tech components, computer chips and wafers, and consumer electronics began to appear. There are no televisions or VCRs or DVD players made in the U. S. today but who knows that?  Apple Computers and iPod and iPhones, and even the new IPad are all made in China.  How does that make you feel? 

The iPad may have been designed in the United States, but Apple's money-spinning products are manufactured in the high-tech factories of east Asia. Asia expects a big uptick thanks to Apple. India is also booming because of US jobs brought there by big name US corporations like IBM and Microsoft, Apple, and others. Welcome to America?

How Did We Lose the Stimulus' Green Jobs & More?

There is a war in the US of conservative v progressive about whether the solution for global warming is valid or not. It is not the solution that is held in question, it is the premise that there is a problem that is controllable by man. With such an emphasis on the clean green industries, especially in the recent Obama years, one would think with the zilllions in stimulus dollars helping US firms become the first, that we would in fact be the first and the best in green technology. But, then again whatever government does, it does poorly. I learned that in Prinicples of Government 101.

Therefore it would seem ironic to some and as expected to others that over 20,000 green jobs have been shipped to India.  Companies used the stimulus money to create green jobs but they figured out they could be accomplished better in India. Our CoOngress merely winked..  No it isn't fair.  They argue that there are jobs from green in America but they admit that those jobs are low-wage installation and construction jobs.  Though you may think India is where the cheap, low-skill jobs go, this is not true.  For the green jobs, India has gotten the very good and the high paying jobs. The government of India understands that business is good and people loafing around all day is bad. Our President, who appears to have always worked for a living, has yet to realize this. 

While the US suggests that high speed rail is impractical, more stimulus money will be given China to build, and operate a high speed rail system in California. The Chinese government  will be working with the State of California and General Electric to help Schwarzenegger's replacement guy, Jerry "Moonbeam Brown" to  get these lines built.  American taxpayers are paying so who cares?. We're borrowing real money from the CHinese so we can pay them in real money for work provided.

At least the work will be done in the US but the US has no skills in the area so Chinese engineers will be brought to the U.S.  Ironically, 150 years ago, low-wage Chinese workers were brought to America by the railroads for the back-breaking work of setting up the US rails system. What happened to America. In a word, "government" is what happened. Americans sent the best pesker or the best b-ssser to COngress and gues what we got -- BS.

China is not just interested in building trinkets any more.  The Chinese take pride in the fact that they are a big exporter and pioneers in bullet trains traveling as high as 215 to 400 miles an hour. What happened to American business pride?  This environmentally friendly technology has permitted China to race past the United States in the last few years.  Soon, now that the President has shut down NASA, and the US is officially out of the space race, China will be taking our astronauts to the space station and back on Chinese rockets. R.  Do any real Americans think that is good for us. The truth is that US firms have fought so hard for profits, they have hurt the US in its ability to be a real player on the world's high tech stage. Our corporations do not care about America or Americans. 

The new green jobs coming from the US to India include engineers, strategic business management, and major support technicians. These folks are the innovators and are the ones designing the innovative environmental friendly solutions.  If you are in India, you can get some good US jobs such as sustainability engineers, marketing and business development executives, data center management engineers, utilities and electric engineers and quality specialists. In the US, don't expect too much. American corporations with the help of the government have sold you out.  Expertise in the future will be something that US companies buy from overseas.  No, it is not good for America. 

Pittston PA Plant Abandoned

Even the analog television faceplates, which were once made by Owens-Corning and later Techneglas in Pittston Pennsylvania are now made in Korea. So, discrete manufacturing was the first activity that began to move to offshore destinations in the corporate quest for significantly lower labor costs. I must ask you as a reader, is there anything about American workers losing their jobs because American corporations found a "cheaper way" that you find admirable?  I did not hink so.

Yet, these corporate economic traitors are protected by our government with endowed and almost inalienable rights and privileges to do business in the United States? Why is that? It surely is time for that to change, and as you will see in the later essays in this section, I have a plan that means business. And, for US workers, it means good jobs.

Nobody really shows the costs but with energy costs sky high, think about the cost of shipping today. Do you think there is much savings for products made in country X if the product must be shipped back to the US?   You are right. The wage rate really does not make up for all of that.  For products that otherwise would be shipped across the world, however, US companies make a lot more money and save on taxes by doing business outside of the U.S.  Maybe it is time to send in some replacement players for these corporations? 

Some argue that India and other countries create a better college graduate, prepared better to engage the workplace. As a professor, I see that grade inflation is rampant. I blame student evaluations which force many professors to give higher and higher grades to poorer and poorer students. If the university evaluations were fair, and non-tenured professors could grade students honestly, poor students would have a chance to become good students and good students would have a chance to become excellent students and all of that would make American students more competitive, and better in the marketplace a lot sooner. 

American students are no dummer than ever but with colleges and universities adopting a hard and sfast tail wags the dog principle does not help America's students at all. Consequently, American students are not sought internationlly because those prepared to engage with grade inflation and lower courwse requiremnts are few and far between. So, yes, US education from K-12, and from Bachelor level to PH.D., all must improve so America again can be the best in all it does. 

Before I move on to the corporate income tax, let me share with you something personal. Let me just say that I am a computer expert. I have written over thirty computer books, a number of which have been reasonably fine sellers. At least ten of my recent books are in the trophy case at Marywood University in the Business Hall. Marywood uses my books and those of others to help convince students of the abilities of the faculty. Three years ago, I retired and after a national faculty search Marywood asked me to stay on. So, after three years, this year, they decided to release me, but I was not really prepared to go. My job was eliminated. Dr. Dangen Hu, from overseas, a non-citizen, a 29-year old with no IT or business experience, but with a PhD and an H-1B visa, will be taking my classes next semester.

Ironically, I have been writing about H-1B visa abuse by companies and educational institutions for years and my most recent book is Americans Need Not Apply! This book is available at

I am going on 64 years of age and I have never tasted the sting of being on unemployment compensation. As of July, 2011, however, I shall know the feeling. I won't be on Unemployment Compensation very long, however. Soon, I will be a US Senator from the State of Pennsylvania. My time on UC will help me understand that the perpetrators in the academic charade are not the lazy students, but the lazy administrations and the scared chairmen and chairwomen who cannot ferret out what is good for the educational process from that which is not.

Consequently, in my case, a 29-year old PhD, who is a non-citizen with minimal English speaking skills is deemed by the Administration, since he holds a PhD to be better for teaching than a 34-year college teacher with Assistant Professor rank, who has been teaching College courses since he was 29. In my case, I was offered the teaching job part-time after having worked in a highly technical capacity for IBM for eight years. I finished IBM after 23-years of service as a Senior Systems Engineer and began my own consultancy. American educational institutions don't get it.

American colleges and universities are not yet ready for the world we face. They think their mission is merely to attract students and have "meat in the seats." I have heard them say exactly that and they act accordingly. If a faculty member does not have good student evals, they don't last long enough to ever be counted regardless of how well they teach their students. There is no peer evaluation of faculty and no superior has ever been in any of my classes in over 34 years of teaching college.

As much as the K-12 tests help us know how well we are hitting the subject marks at an national level for the youngest American students, I would suggest that the US government (please forgive me for saying that) institute a 13 to 16 and higher set of criteria and tests so that our colleges can compete against each other for excellence rather than compete for the good will of students for purposes of retention..

FYI, my student evals have always been very high but my students do not always get the best grades. They get what they deserve and I help them achieve rather than merely evaluate them. My objective is for them to engage and learn and in so much as they do that, they gain. And, eventually, many come around to having faith in themseleves and they choose not to punish me in the student evals.  I do not think Marywood University made the right decision in replcing three American professors. I know that in my area of expertise, I was replaced by a foreigner on an H-1B visa who has never paid US income taxes. 

The Corporate Income Tax Is the Jobs' Real Bad Guy

The real culprit for greedy US corporations to turn their backs on America is the corporate income tax.  Just look at the balance sheets of American corporations who do lots of work overseas. These companies have figured out how to stiff the US corporate tax system by doing business in foreign countries. They get to keep their profits without declaring taxes. 

The jobs are not about to come back for awhile for lots of good reasons.  Companies make too much money to ever decide to help the home country without big change in the U.S. tax system and the way corporations and their executives are treated in the U.S.  While the government thinks they are nailing corporations with excessively high taxes (35%), corporations are showing they have more might than the US government as they pack up their bags, their plant, and a few of their people, and they take a quick and permanent trip overseas mostly to avoid the sting of American taxes. 

Jobs will not come back without major change.  Right now, once a company sets up shop in a foreign country, it is a sign of management failure to come back to the US. Management would always decide that 500,000 regular employees should be fired rather than one manager.  It's a culture thing.  Top managers protect top managers. I point that out so that we all have little sympathy for American managers who ship jobs overseas.

IBM Offshoring Example
Today's poster child for treating workers poorly is the IBM Corporation.  IBM has fired as many as 200,000 employees and has shipped their jobs overseas in the last twenty years. Plant sites such as Endicott, New York are decimated as is Rochester Minnesota and other huge hallmarks of IBM's onetime relationship with its American host.  Today IBM and even Microsoft could care less about America and Americans.  

What IBM executives, such as chairman Samuel Palmisano, are doing in the US today is dumping experienced and expensive people, who work in expensive countries (US) and moving jobs to low cost countries, using the cheapest resources available there. IBM has decided that the US is an expensive country. Ask them at their next stockholders' meeting. 

The IBM company is pushing everything that can be offshored overseas as fast as it can.  If the Chinese built a high speed rail over the ocean, IBM would be its first customer.  Additionally, since IBM got so good at stiffing its own workers, it has made a business out of it.  IBM makes a ton of money helping other "American" corporations do the same thing.  Thank you IBM!

To further explore the Offshoring dilemma and to pick up a few really good solutions to keep jobs in the US, please continue with the essay titled:  Bringing Back US Jobs from Off Shore." You can find it on the site. 

Now I can say this without any reservations to those in America who have been let down by our government:"  "I feel your pain."

I think it's time for a beer!