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Outsourcing hurts more than just Job Market

The media is paying increasing attention to outsourcing as the US economy struggles and jobs remain scarce. This is fine, but it doesn’t tell the whole story. Search the news and you’ll read about corporations shipping jobs overseas to lower production costs, to reduce training costs, and to generally reduce costs of doing business. Numerous other reports show the very large percentage of corporations similarly sheltering their earnings overseas, to avoid US taxes.

Meanwhile there are few jobs, high taxes, and decreasing services available to citizens.

But if you’re in tech and the web, you know how hard it is to find a good front end developer or web developer, or analytics ninja or generally highly-capable tech worker. The good ones are all fully booked. The ones that are available seem to be unworthy of your trust and dependence. What’s going on? Shouldn’t the demand for qualified workers drive the production of .. qualified workers?

Education and jobs.. collateral damage from the corporate outsourcing of American jobs and profits.

The public school system was created not to educate the masses but to train workers in the basic skills they needed to operate machinery and manage other workers.  Prior to the industrial revolution, government and wealthy elites preferred the common man remain ignorant and dependent on them for jobs and basic survival. With the advent of machines we needed operating manuals, and workers who could write and read them. Public schools were created for corporations. Go ahead, research the history of public schools.

Throughout history local companies have pressed school boards to adjust curricula to support their local manufacturing and service economies. Large tech centers like Rochester NY rose out of funding and political influence from large corporation (like Kodak). Schools developed along with industry. We needed to fight for academic freedom and well-rounded education, but the major driving force was jobs jobs jobs because success was global and we needed to stay competitive.

In the past 40 years we’ve seen the US drop in mathematics learning as Asian nations excelled. There are parallels to economic development. In my years inside academia, I knew many academic leaders who pushed diligently for better high school education so that students would be better prepared for college. High schools needed to prepare kids for tech jobs. Colleges intended to prepare them for better jobs such as Engineering and management and leadership positions. Leaders lead others… other workers.

Perhaps corporate America has abandoned more than just creating US jobs and paying US taxes. They may have abandoned  support of US education. After all, if they outsource the lower and mid-level jobs overseas, and select their top-tier employees from a global talent pool of self-funded university grads, do they really care about the previously important public school  worker producing channels?

No. They can externalize the cost of advancing civil society just as they externalize the costs of  pollution, hazardous waste, health insurance, and transportation. Soon I expect they will extend their externalization of the costs of defense to local security issues, as they increasingly need protection from the very same out of work, under-educated, lost-in-space citizens they have abandoned.

The decline of the community college tracks this…  the inflation of the higher education finance bubble is a consequence of the collapse of the middle tier of universities, suddenly left with inadequate qualified students, inadequate industrial and commercial support, and an embarrassingly disconnected leadership. What could they do but get in line with the Wall Street  Way, looking to fancy financial instruments to save their dying businesses?

The next time you think outsourcing is ok, and notice the substantial costs of worker hiring and retraining if you don’t outsource,  remember there’s more to the story. Societal collapse, for example.


  1. Jey Pandian wrote:

    I was thinking about this the other day. This is a complex topic to address – we are getting mired deeper in debt, creating more enemies abroad and at the same time; cutting funds from the fundamental drivers of economic prosperity. Definitely food for thought.

    Tuesday, April 19, 2011 at 1:31 pm | Permalink
  2. Hi John,

    I’m also a search engine optimization consultant from Seattle and I just ventured out on my own after years of working for companies with a “churn and burn” mentality.

    Already my schedule is filling up quite nicely, so there are still some of the good ones are almost fully booked. :)

    You have a great article here. I’m very familiar with the education problem, and you should look into charter schools in your follow-up to this post.

    America does need to be more competitive, and don’t forget it’s corporations that have a heavy influence on our politicians. In my opinion what we need is to throw away both of our current political parties. We are a new generation.

    Let’s take a look at our military for example. Our military is focusing on faster mobility, and I believe our government needs to do the same. We need a smaller government. Charter schools, make the Post Office a private company. Stop bailing out big corporations, as it just encourages them to take huge gambles, while knowing that they won’t be taking much risk.

    The baby boomer generation was the richest generation in history. They are probably the most selfish generation (as a whole). Much of their policy is not forward thinking. We can’t survive on the “band-aid” approach to solving our problems. In fact, we will probably have to make sacrifices to make things better for the generation after us. Our county’s policies need to always reflect that for our society to progress!

    I encourage you to take a look at a political party that Abraham Lincoln was a part of, called the Whig party. People like us have the know how to spread the word. Let me know if I can help you get the conversation started.

    I really look forward to your next post.

    John replied: Well, I’m not a fan of ” political parties” these days, especially ones that claim to be “grass roots”. We live in an age of propaganda, and while it might be convenient for these party promoters to brand me a “cynic”, they have earned the attention of cynical people (like myself). That Whig party is reportedly started by military people (supporters of increased military investment) and claims to be “middle road” on many issues.. which means it’s full of conflict. As a conflicted political party, it can have little meaningful use beyond rallying uncommitted voters behind a label, in order to re-assign them to one of the major parties at the last minute (when it is obvious and accepted that a middle-road party with no chance of winning will llkely cause more harm at the polls than not). It’s a classic strategy, employed by the conservatives most recently. I’d rather support a “don’t vote” campaign than a misdirection campaign. A difference can be made in the real world, without a political party. Until that is  recognized by enough people, we suffer at the hands of deceptive politicians and their promoters.

    Wednesday, April 20, 2011 at 3:12 am | Permalink
  3. Martypants wrote:

    Great post John. I live in Georgia, so I never once let my son go to the absolutely failed public education system here…No way. But the private one I researched and drove out of my way to allow him to attend worked very well for preparing him for college.
    As a copywriter (mostly), overseas outsourcing has completely upended the landscape in the last 4 years. It is a different world, and expectations have lowered across the board as a result. The only benefit I see to it all now, is that it was cheaper…but the detritus from this will be felt for years. I saw it as an echo of what society was doing – I just cried a little more, because now it reached my little corner of the world too. Sigh.
    Needing more protection from the idiots we’ve taken the time to mass-create. Perfect.

    Sunday, April 24, 2011 at 6:50 pm | Permalink