Wednesday, June 29, 2005

Contrarian View From the Pew: Outsourcing

Who is our neighbor? The family next door, the guy down the street, the people across town, those in other Cities, other States, and other countries are all our neighbors. According to the Christian tradition and the teachings of Christ, everyone is our neighbor without exception.

Outsourcing is the business practice by American Corporations of employing foreign workers instead of American workers. It started decades ago when American manufacturers began building plants in the less developed countries in order to reduce their cost of production. It continues today with manufacturing, but now it also includes white collar workers such as accountants, computer programmers, and call center workers.

Outsourcing hurts the American workers who have their job moved to another country. It helps American consumers who are able to buy more for less and it helps American investors who can usually receive a larger return on investment for a short period of time until competition forces equilibrium between supply and demand.

The labor movement has been quick to denounce outsourcing as evil. Many believers who are sympathetic to labor and opposed to capitalism have jumped on the anti-outsourcing band wagon making the claim that outsourcing is immoral because it hurts people, which is true. But like most things in life, there is another side to the outsourcing story. Outsourcing also helps people. It helps workers in other countries support their families and it helps Americans stretch the dollar a little further.

There is an age old debate within the Christian Church between how much effort, time, and money should be spent on outreach and how much effort, time, and money should be spent on building up the Church. The tension is good because in the end we always end up doing both, even though we have to make compromises in the process.

Outsourcing needs the same kind of tension and the same kind of outcome. We need to do both. We need to support foreign workers and we need to support local and American workers. Some people will only buy the least expensive products and services and some people will only buy American products and services. Hopefully, those two groups will balance each other out and the rest of us should consciously do both. We should be helping all of our neighbors, not just the guy next door.


Dan Edelen said...


My issues with outsourcing concern the way it is done. I see no way to stop it if the bottom line is the only consideration. Sadly, it usually is.

Companies that outsource need to do far more to assist employees who will lose jobs due to the outsourcing. This goes far beyond unemployment compensation and separation packages. Companies need to announce their intentions to outsource at least six months in advance and should immediately notify the departments of employees that will be affected. Too often, though, there is barely any notification and specifics aren't mentioned.

Another problem is the fact that companies have this Jack Welch-ian idea that employees are expendable and the downsizing of employees does not matter to a community. This is patently false. The HR department of a company intent on outsourcing Should work with those that will lose jobs to help place them in new ones even before their final day arrives. Companies intent on outsourcing spend plenty of time ramping up their new employees that take the outsourced jobs, so they can easily absorb early losses of soon-to-be-outsourced employees should those employees get new jobs through the help of HR BEFORE the last day before the handover.

I could go on forever with suggestions, but those are just a few. Courtesy needs to be extended to people who lose their jobs due to planned outsourcing, but too often it feels like "Don't let the door hit you on the way out" to those who lose their jobs due to an outsourcing. It simply doesn't have to be that way.

David M. Smith said...

Hi Dan,

I won’t defend Jack Welch or any of his disciples. Like you, I think the corporate mentality is quite lacking in morality, not just in regards to outsourcing, but in regards to most everything else as well.

However, I can’t place the blame solely at the feet of the corporate leaders. Lawyers, employees, and politicians should all share in the blame. I don’t know how you as an outsider can determine the right way for a company to spend the money they have.

One of the reasons losing a job is so painful is because it is so hard to find a comparable replacement job. One of the main reasons it is so hard to find a comparable replacement job is because of all of the expenses that are associated with employment that have nothing to do with the product or service being produced.

If employers were to increase severance benefits, they would also be less likely to take a risk on a new employee. Possibly, employees would be much better off if corporations got out of the caring business all together and just paid an honest days pay for an honest days work. I would like a system where I could get up and compete for my job every day much better than a system that makes hiring me so difficult.