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Losing America's Livelihood
The New American ^
| William Jasper
Posted on 02/04/2004 9:36:33 AM PST by ninenot
Up to 14 million jobs
are at risk of being shipped overseas, two UC Berkeley economists said Wednesday in a research report.
Contra Costa Times October 30, 2003
Were trying to move everything we can offshore, HP [Hewlett-Packard] Services chief Ann Livermore told Wall Street analysts at a meeting Wednesday.
Forbes, December 5, 2002
But as the US economy has slowly shifted toward service jobs, factory jobs have been steadily lost in fact, in just the past 39 months, some 2.8 million have vanished.
Christian Science Monitor December 11, 2003
Will America be a Third World country in 20 years?
Paul Craig Roberts, columnist-economist, January 21, 2003
John Williams has been shrimping since 1960. Together with his wife, Kathleen, he operates three shrimp boats out of Tarpon Springs, Florida, north of Tampa Bay. He has weathered recessions, squalls and hurricanes. But he is now facing a tidal wave that has already buried thousands of his fellow shrimp fishermen. It is a tidal wave of foreign shrimp nearly one billion pounds of it crashing onto the U.S. market from Red China, Vietnam, Thailand, India and more than a dozen other countries.
Last year Williams outfit, Gulf Partners, Ltd., hauled in about one million pounds of shrimp. Weve produced about the same amount of product for the past several years, he told The New American, but the price we get has dropped dramatically. Our gross revenue has dropped more than 50 percent. But our operational costs havent gone down; in fact, theyve gone up. According to Williams, who is secretary-treasurer of the Southern Shrimp Alliance, an eight-state coalition of shrimpers, the value of U.S.-harvested shrimp was cut in half, from $1.25 billion in 2000 to $560 million in 2002. Employment at southern shrimp plants dropped 40 percent.
The plight of Americas shrimping industry is symptomatic of the dire consequences potentially awaiting every U.S. industry. It also starkly illustrates how suddenly an entire sector of our economy can be targeted and hollowed out, if not completely destroyed.
For generations, shrimping has provided a good livelihood for several hundred thousand Americans in Gulf Coast communities from Texas to Florida. Then, virtually overnight, foreign producers almost completely took over the U.S. market and now provide 88 percent of the shrimp consumed in the U.S. And it isnt because the foreign shrimp industry is more efficient or produces a better quality product. The real tsunami hit U.S. shrimpers in 2002, when the European Union, Japan and Canada banned shrimp from China, Thailand and Vietnam because of detected residues of chloramphenicol, a potent, broad-spectrum antibiotic suspected of causing aplastic anemia and other blood conditions. China, Thailand and Vietnam unloaded their shrimp cargoes on the U.S. market instead, even though federal regulations prohibit use of chloramphenicol in food-producing animals and animal feed products.
Shrimp fishermen like John Williams are fuming. Another year like this and there wont be any domestic shrimp industry left to speak of, Williams told The New American, noting that he recently saw a repossessed $800,000 shrimp boat sell for $100,000 at a bank auction. This is just plain wrong when a whole industry of hardworking, taxpaying American citizens can be put out of business like this by foreign competitors subsidized by their governments.
What Williams finds even more galling is that our government is subsidizing his foreign competitors, too! Yes, the same federal policymakers who have slapped domestic shrimp producers with onerous regulations, are not only helping his foreign shrimpers with incredible trade privileges, but actually aiding them with loans, grants and loan guarantees as well. Through assistance provided by the International Monetary Fund, the World Bank, the Export-Import Bank and other foreign aid programs, were not only giving them loans and subsidies, but advanced technology too, Williams notes with exasperation.
In 2002 and 2003, Rep. Ron Paul (R-Texas) introduced the Shrimp Importation Financing Fairness Act, which aimed to stop some of these policies that are aiding the destruction of our domestic shrimping industry. The Paul bill would declare a moratorium on federal regulations that are making U.S. shrimping non-competitive and end funding of federal programs and international institutions that provide financial aid to countries that are dumping their subsidized shrimp on our market.
Rep. Pauls legislation names seven countries Thailand, Vietnam, India, China, Ecuador, Indonesia, and Brazil as the main dumping culprits. But paragraphs 8 and 9 of Section 2 are the real shockers in the bill. Most Americans would be stunned to learn what our political leaders are doing with our tax dollars. Those two paragraphs read:
(8) Since 1999 our Government has provided more than $1,800,000,000 in financing and insurance for these foreign countries through the Overseas Private Investment Corporation, and our Governments current exposure relative to these countries through our Export-Import Bank totals some $14,800,000,000, bringing the total subsidy of these countries by the United States to over $16,500,000,000.
(9) Many of these countries are not market-oriented, and hence their participation in United States-supported international finance regimes amounts to a direct subsidy by American taxpayers in the shrimping sector of their international competitors.
Thats $16.5 billion. With help like that, is it any wonder that these countries are able to produce the glut of shrimp that is destroying our shrimping industry?
Different Industries, Same Story
What do Gulf Coast shrimp boat owners like John Williams have in common with tool and die makers in the Great Lakes region, sawmill owners in the Pacific Northwest, Midwest farmers, Texas ranchers, New England manufacturers, or California software engineers and computer consultants? The same thing that their business counterparts throughout the U.S. in virtually every industry share: the threat of extinction due to perverse government policies that penalize American producers and reward their foreign competitors. They are caught in a vise of regulatory policies that have driven their operating costs far above those of their foreign competitors, and U.S. trade policies that encourage foreign producers to dump their products on the American market. On top of that, the U.S. government pours billions of U.S. tax dollars into subsidies for their foreign competitors!
Americas tool and die industry is in danger of going the way of our shrimping industry. Why should that concern the vast majority of Americans who are not directly involved in this industry? Because it is essential to all manufacturing. The industrial machinery that is used to manufacture almost everything from cell phones, toothbrushes and Barbie dolls to computer chips, medical diagnostic equipment and fighter jet engines begins with tool and die makers. We cannot expect to sustain a modern society, let alone defend ourselves and maintain our prosperity and technological leadership, without them. But our tool and die industry is rapidly disappearing. In Michigan, about 34,000 tooling jobs have vanished in the last five years, according to state labor data. The National Tooling & Machining Association (NTMA) reports that about 30 percent of the countrys toolmakers have gone out of business since 2000 and many more are expected to follow.
Guys that were earning $20 an hour two years ago making very high-precision tools are now stocking shelves at Wal-Mart, said NTMA President Matt Coffey in a recent Detroit Free Press article on the plight of the tooling industry. Coffey estimates that there are fewer than 10,000 U.S. tooling companies today, down from roughly 14,000 a few years ago. Which could mean that 140,000 tooling jobs have disappeared nationally since 2000. This trend will prove disastrous for our country, if allowed to continue.
One of the advantages our manufacturers always have had is that the toolmakers were here and were good, Peter Morici, former chief economist for the U.S. International Trade Commission, told the Free Press. It undermines the whole manufacturing base in the long term if they go away, he noted. When all these little toolmakers go away, they dont re-open. Their sons do something else and that skill is lost. The decline of toolmaking is like the growth of a desert. Once it starts, its tough to stop from spreading.
Mr. Moricis comments echo the alarm expressed by Bob Davis, general manager of Modern Die Systems Inc. of Elwood, Indiana, in an interview with The New American last year (Your Job May Be Next! March 10, 2003). Our government has set it up so that it is unprofitable to manufacture here in the U.S., he told this writer. Mr. Davis noted the tremendous disincentives to production posed by taxes, regulations, employee medical insurance, and labor union obstruction the combined effects of which are driving many businesses into the ground, or out of the country. We are killing the goose that laid the golden egg. Our countrys entire production capability will be stripped bare if this continues, Davis said. And with it will go all of the jobs and small and medium-sized independent businesses that are the bedrock of the American middle class.
Shooting Ourselves in the Foot
Americas small- and medium-sized businesses traditionally have been a vital source of jobs, as well as a wellspring of creativity, invention and innovation that has propelled us to global economic and technological dominance. Limited government interference in the marketplace combined with a general acceptance of Christian morality was the key that unleashed the American entrepreneurial spirit and gave rise to our prosperity and the development of a large middle class. But the free enterprise system that made our economic miracle possible is being suffocated in a socialist swamp of regulatory red tape. U.S. regulatory costs especially from regulations allegedly aimed at environmental and safety risks are particularly hazardous to small and medium businesses.
The true extent of that hazard is amply exposed in an important study released in December 2003 by the National Association of Manufacturers (NAM). The comprehensive NAM study significantly noted that compliance costs for regulations can be regarded as the silent killer of manufacturing competitiveness. The report revealed that the regulatory, tax and mandate burden is adding at least a staggering 22.4 percent (nearly $5 per hour worked) to the cost of doing business in the U.S. relative to our major foreign competitors. To appreciate the magnitude of this burden, consider that these external costs imposed by government are more than twice the average direct labor costs of U.S. manufacturers, which are 11 percent.
NAM President Jerry Jasinowski noted that the NAM study documents that we are essentially shooting ourselves in the foot competitively by making it too expensive to make products in America. Whats more, the regulatory agencies have negated many of the impressive gains in production efficiency of the past decade. Taken together, notes Jasinowski, external non-production costs have offset a large part of the 54 percent increase in productivity achieved since 1990.
U.S. manufacturing has demonstrated the ability to overcome pure wage differentials with trading partners through innovation, capital investment and productivity, said James Berges, President of Emerson, a St. Louis-based manufacturer of industrial equipment. But when the additional external costs described in this [NAM] paper are piled on, the task becomes unmanageable, even in the best companies.
In fact, the piling on can be worse than unmanageable; it is often fatal. Thousands of small and medium businesses already have been slain by this silent killer and many more will succumb to its deadly effects. (See sidebar.)
Driving Jobs Offshore
Even large corporations cannot absorb the crushing U.S. regulatory burden for long without losing competitiveness vis-à-vis foreign producers. However, large corporations have options not readily available to many smaller businesses: They can more easily move their manufacturing and processing operations overseas, outsource many of their service sectors to cheaper foreign providers, and import cheaper foreign employees under various visa programs. And that is precisely what they are doing, in huge quantum jumps that defy any historic comparison.
America is in the midst of an enormous job outsourcing boom that gives every indication of accelerating. In addition to the continued massive hemorrhaging of Americas manufacturing and blue-collar jobs that began two decades ago, we now have a huge and growing crisis involving the flight of millions of hi-tech and white-collar jobs. If appropriate action is not taken to address the factors propelling this massive exodus, it is not an exaggeration to say that America is headed toward has-been status. A much-quoted study by Forrester Research Inc. last year predicted that at least 3.3 million white-collar jobs and $136 billion in wages will shift from the U.S. to low-cost countries by 2015.
An October 2003 report by researchers from the University of California-Berkeleys Fisher Center for Real Estate and Urban Economics suggests that the Forrester predictions may be extremely conservative. According to the Berkeley researchers, as many as 14 million service jobs are at risk of outsourcing.
The authors of the Berkeley report, Ashok Deo Bardhan and Cynthia A. Kroll, note that the recent boom in outsourcing is causing growing apprehension in the U.S. that this may well be the largest out-migration of non-manufacturing jobs in the history of the U.S. economy. (Emphasis added.)
Many of these jobs are going to India. By tabulating reports in Indian newspapers and business journals for the month of July 2003 alone, Bardhan and Kroll reported that they found 25,000 to 30,000 new outsourcing related jobs announced by U.S. firms. In the same month, there were 2,087 mass layoff actions carried out by U.S. employers resulting in a loss of 226,435 jobs.
The jobs being created in India and elsewhere are in a wide range of service sectors, say Bardhan and Kroll, such as geographic information systems services for insurance companies, stock market research for financial firms, medical transcription services, legal online database research, and data analysis for consulting firms, in addition to customer service call centers, payroll and other back-office related activities.
In addition to the millions of U.S. jobs that soon could be leaving for India, China, Russia and other offshore destinations, there is the added threat to American workers from imported labor. Hundreds of thousands of American information technology (IT) workers have lost their jobs in the past several years to foreign replacements through the L-1 and H-1B visa programs. American software engineers, computer designers, technicians, electrical engineers and other hi-tech employees are being replaced by workers from India, Pakistan, the Middle East and China.
No other country in the world has adopted such reckless and suicidal immigration policies. Incredibly, the Bush administration is advocating an amnesty for millions of illegal aliens that dwarfs the amnesty proposals of Bill Clinton. Moreover, President George Bush and many members of Congress enthusiastically favor more outsourcing, more L-1 and H1-B visas, and more immigration overall. At a December 15, 2003 press conference, President Bush stated: I have constantly said that we need to have an immigration policy that helps match any willing employer with any willing employee. (Emphasis added.) There is virtually an unlimited supply of willing employees worldwide who would be more than happy to immigrate to the U.S., but how is that going to help put Americans back to work?
It wont, says Jan Frelick, who has experienced the outsourcing and foreign temps up close and personal. Mrs. Frelick worked for computer giant Hewlett-Packard in the San Francisco Bay area but transferred to HPs facility in the Sacramento area in 1990. As computer security administrator for her division and a member of the divisions business control team, she had a ringside seat from which she watched HP outsource droves of jobs. Then, on August 24, 2001, Frelick told The New American, it happened to me. I wasnt downsized the term they deceptively use I was replaced. So were almost all other employees in many units. The IT Support Desk, for instance, which previously was staffed completely by Americans, is now staffed by people from India.
False Solutions, Toxic Antidotes
The cheery advocates of globalization blithely dismiss concerns about massive job losses, the wholesale gutting of our economy and the flight of entire industries from our shores. Their mantra-like response is that the huge exodus of jobs, manufacturing, and technology is actually a good thing representing the elimination of obsolete remnants of the old economy, to make way for the higher value, cutting-edge technologies and jobs of the new global economy. These glib advocates are dealing in voodoo economics and globaloney social science. The jobs and technology we are outsourcing do not have to do with genuinely obsolete technology like buggy whips and whale oil lamps, as the globalists assert. They have to do with the production of real wealth, real products and real services that are essential to sustaining a modern, prosperous society.
Where are the wonderful new jobs the globalists keep promising? Hundreds of thousands of skilled and experienced white collar and blue collar workers engineers, computer programmers, toolmakers, accountants and technicians are unemployed, or have been reduced to taking near-minimum-wage jobs. Political forces, not market forces, are driving these devastating changes. As we have noted above, it is perverse government policies that are responsible for making American companies uncompetitive, subsidizing our foreign competition, outsourcing jobs and flooding our job market with immigrants and temporary foreign workers. America has gone through economic downturns before and seen periods of high unemployment. But the economy has always rebounded and the jobs have returned as businesses have revved up production. However, that is not going to happen with the thousands of businesses and the millions of jobs we have been losing.
The Bush administration and its allies in Congress Republican and Democrat have given no indication of reversing our disastrous course. Indeed they are proposing supposed solutions that would prove to be even more calamitous. They are saddling U.S. businesses with even more oppressive mandates and regulatory overkill, while pushing for more job outsourcing, more temporary worker visas, far greater immigration quotas, an amnesty for illegal aliens and the removal of virtually all tariffs.
Moreover, the president has staked out 2004 to push for completion of the so-called Free Trade Area of the Americas (FTAA) agreement, a plan to merge the countries of the Western Hemisphere into a European Union-style common market. However, like the original European Common Market, the FTAA is much more than a trade pact. It has been designed to evolve into a supranational regional government, but in a much shorter time span than it took the Europeans to arrive at that stage. Like the EU, the FTAAs central executive authority would be strongly socialistic and would gradually claim the power to overrule the national laws and constitutions of its member states. The FTAA Declarations, Plans of Action and Charter drafts call for regional integration, in accordance with the charters of the UN and the World Trade Organization. The FTAA would establish a bureaucracy of agencies to monitor, and eventually dictate, regional health, education, labor, environment, foreign aid, immigration and security policies. Like the EU, the FTAA is set up to acquire, gradually, full legislative, executive and judicial powers. As such, it is plainly a power grab disguised in the garb of a trade agreement.
The most frightening aspect of the proposed FTAA is the fact that its realization would spell the end to our national sovereignty and sweep aside constitutional impediments to the concentration of tyrannical power. But the more immediately felt effects would include a rapid dissolving of our borders and an enormous deluge of immigrants (both legal and illegal) from Latin America and the Caribbean. At the same time, billions of dollars of agricultural products, textiles, manufactured goods and other products will flood our markets devastating every industry sector in the same way that our domestic shrimp industry has been wrecked.
These so-called solutions are manifestly suicidal. If America is to be spared sinking into Third World status, we must completely reverse course. That means awakening and energizing a minority of the American public sufficient to compel Congress to: abolish the socialist regulatory monster that is destroying our countrys competitiveness; take back control of our borders and enforce sensible, reduced immigration; end all U.S. taxpayer subsidies to foreign competitors; and defeat the FTAA. Its really very simple. Not easy, but simple.
TOPICS: Business/Economy; Constitution/Conservatism; Culture/Society; Foreign Affairs; Front Page News; Government; News/Current Events; US: Florida; US: Mississippi; US: Texas
KEYWORDS: economy; ftaa; gwbush; jbs; jobloss; johnbirchsociety; manufacturing; morebsfromjbs; outsourcing; ronpaul; thenewamerican; treaty
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posted on 02/04/2004 9:36:33 AM PST
To: Willie Green; afraidfortherepublic; A. Pole; hedgetrimmer; XBob; Elliott Jackalope; VOA; ...
Shrimp farmers, tool-and-die makers, and IT pros.
But they're not coming after ME!!! So who cares?
posted on 02/04/2004 9:37:58 AM PST
(Minister of Membership, TomasTorquemadaGentlemen'sClub)
The real tsunami hit U.S. shrimpers in 2002, when the European Union, Japan and Canada banned shrimp from China, Thailand and Vietnam because of detected residues of chloramphenicol, a potent, broad-spectrum antibiotic suspected of causing aplastic anemia and other blood conditions. China, Thailand and Vietnam unloaded their shrimp cargoes on the U.S. market instead, even though federal regulations prohibit use of chloramphenicol in food-producing animals and animal feed products.
There is a simple free market solution to this problem - American consumers who get aplastic anemia from chloramphenicol will not buy these shrimp anymore.
posted on 02/04/2004 9:48:51 AM PST
by A. Pole
(pay no attention to the man behind the curtain , the hand of free market must be invisible)
I know some people who are afraid they will lose their jobs. If you spend your day sitting at a computer screen or a telephone, your job can be done by a very low paid person in India.
And what happens when Robotics jobs are shifted overseas? Really, this is getting out of hand. At what point do we stop not only shifting jobs overseas, but also giving them our tax money to take the jobs? If any job is to go outside this country from an industry in this country, it should only go to Mexico, Canada, or our true allies like England and Australia (I'm sure there are some others). Why Mexico and Canada? Reduce our flow of illegal immigrants from the Southern border, and Canada to build their economy back up so they can break from socialism. We should not give a single penny and harshly deal with companies that send our jobs over to these countries like China and India who have announced their opposition to us repeatedly. Neither of these two countries is our friend.
We need to sensibly handle illegal immigration by eliminating it. We need to handle illegal dumping that destroys our industries with swift and proper elimination. If they can't sell the junk anywhere else, then why would we want it here? This stuff is not rocket science. Why are we still having our elected leaders playing God with people's lives? Oh, that's right. They can get away with it. It's time to put a stop to it.
posted on 02/04/2004 10:07:42 AM PST
(Visit the American Patriot Party and stay a while. http://www.patriotparty.us)
"But they're not coming after ME!!! So who cares?"
Actually we need to understand that this will accelerate.
As jobs are lost, social programs such as welfare, food stamps etc must increase to keep people at the minimum acceptable level of poverty. Fraud in social programs such as workers comp and insurance will also increase as people resort to desperate tactics to make a living.
Consequently the regulatory and tax burden of American labor will continue to go up on remaining jobs. This increased cost will cause even more jobs to be transferred overseas until either trade restrictions occur or wages go into free fall.
If wages are allowed to go into free fall ... the repercussions to the economy will be horrific. There will be disgruntled employees who don't understand. Some of these will result in shootings. Many companies will layoff people and hire new people rather than adjust their existing employee's wages down and put up with the resulting attitude problems.
We need to protect our industries now. Immigration needs to stop. Tarriffs need to go up.
posted on 02/04/2004 10:08:21 AM PST
what happens when Robotics jobs are shifted overseas?
Won't happen if we learn robotics. Some of the kids are learning robotics. The rest hope to get a job in Hollywood, but who really needs yet another Starship Enterprise model maker?
posted on 02/04/2004 10:15:45 AM PST
I am converted to robotics. The new space race is a robotics race just as the space race 40 years ago was a rocket race. Check out the Lego robotics kit and then call me childish--I am a child again. Robotics is mostly programming and so is something very suitable for cottage industry. Post industrialism is where we're headed, but we can be strong through robotics.
From the Article: Were trying to move everything we can offshore, HP [Hewlett-Packard] Services chief Ann Livermore told Wall Street analysts at a meeting Wednesday.- Forbes, December 5, 2002
Why? (Don't answer...It's rhetorical) I'll tell you why. Because all through the last 40 years or so, we've been raising taxes and imposing harsh regulations on our businesses. All the while the push is to become more competitive by reducing cost. Can you blame them for wanting to reduce their costs by moving ofshore. I can't.
Sure, Dubya has reduced taxes and showed regulations, but the impression is that HE drove up the deficit. With all the disenchantment among Conservatives, this puts the fear in businesses that he's vulnerable. And if he loses in November, it won't be to a Third Party Conservative (sorry Third Partyers.) It will be to an Ultra-Liberal DemocRAT. Whoa!!! Better get outta Dodge before that happens because that DemocRAT will not only raise taxes and impose more and stiffer regulations, but he'll make it illegal to move a plant out of the country too. That's instant death to a lot of our Industries.
To: RightWhale; spacewarp
"what happens when Robotics jobs are shifted overseas?"
"Won't happen if we learn robotics" - RightWhale
I agree that robotics can help minimize the labor problems. However whoever has the cheapest labor to manufacture robotics, the best and cheapest programmers and the most engineering capability is going to be at an advantage.
Also if we don't maintain our manufacturing base, there will be nothing to automate. We will have to build new plants from scratch, and much of the necessary knowledge will have been transferred overseas.
Automation and robotics are two fields that should be ultra ultra high on our protected and promoted industries.
However this alone is going to cause major shifts in the economy. Major categories of workers will be displaced as automation occurs and higher and higher levels of management functions are going to be automated.
How we deal with this is going to be critical. It has the potential to aggravate class differences. Retooling the workforce to available jobs is key. Supporting them during the transition is also key but it is a cost that many of my fellow republicans are going to see as unnecessary handouts instead of supporting the economy as a whole.
posted on 02/04/2004 10:24:16 AM PST
Won't happen if we learn robotics.
Baseless assertion. Robotics is closely tied to computer programming and mechanial engineering, both of which have been outsourced.
posted on 02/04/2004 10:24:48 AM PST
Tarriffs need to go up.
Can we start calling tarriffs what they are, which are "taxes"?
So, you're advocating tax increases on Free Republic. I thought that was unpopular around here...
posted on 02/04/2004 10:31:19 AM PST
by John H K
However this alone is going to cause major shifts in the economy. Major categories of workers will be displaced as automation occurs and higher and higher levels of management functions are going to be automated
So why, again, is it perfectly OK for someone to lose their job to automation, and a horrible crime for someone to lose their job to an Indian guy?
posted on 02/04/2004 10:32:31 AM PST
by John H K
Don't worry. The government will save us.
posted on 02/04/2004 10:34:57 AM PST
To: John H K
Because jobs lost to automation are replaced by jobs repairing, installing, designing and building the machinery that does the automation. When jobs are shipped overseas, then there is no replacement of the lost jobs in our economy.
posted on 02/04/2004 10:36:53 AM PST
by Elliott Jackalope
(We send our kids to Iraq to fight for them, and they send our jobs to India. Now THAT'S gratitude!)
FYI...under the radar news...
TIMES NEWS NETWORK[ WEDNESDAY, JANUARY 28, 2004 05:18:58 PM ] MUMBAI: If you thought that the US Senate had finished with cracking down on outsourcing, think again. Things could just get worse for Indian software and BPO companies. On Friday, President George W Bush signed into law a Bill, which bars outsourcing by the US Treasury and Transport departments, though this does not apply to the whole Federal government as some reports had indicated.
However, another Bill, called "Truthfulness, Responsibility and Accountability in Contracting Act of 2003" (TRAC Act), introduced in the US Senate last year, could halt outsourcing by the entire federal government, if it becomes law.
The objective of the TRAC Bill is "to ensure that the business of the federal government is conducted in the public interest and in a manner that provides for public accountability, efficient delivery of services, reasonable cost savings, and prevention of unwarranted Government expenses, and for other purposes.
The TRAC Bill refers to outsourcing as one of the components of "contracting out" which will be monitored by the General Accounting Office (GAO). The new Bill says that certifying agencies will have to be formed in each department to monitor all projects contracted out.
These agencies will have to report to the GAO that the procedures followed for outsourcing are fair and transparent. These procedures have been put in place to make outsourcing as difficult as possible.
Currently two per cent of all outsourcing projects from India are from the US government. Typically, federal projects are not offshored to India in a major way as they often fall foul of the "buy American provision that sets minimum levels for domestic content in products bought by the US government.
The Bill does not, in any way, affect outsourcing by private US companies except to the extent that it fosters a protectionist climate within the USA. Meanwhile President Bush has signed the omnibus spending Bill making it a law. The Bill is accompanied by a revised budget circular (called A-76) which will prevent outsourcing to India, or to any other country by the Treasury and Transportation departments.
A copy of the new law, which is available with The Economic Times , does not refer to India or even to outsourcing directly, but will nevertheless affect almost all developing and emerging countries including India.
The most damaging part in the new law is the following: "An activity or function of an executive agency that is converted to contractor performance under Office of Management and Budget Circular A-76 may not be performed by the contractor at a location outside the United States except to the extent that such activity or function was previously performed by Federal Government employees outside the United States."
This clause will prevent any offshore outsourcing by the US federal government to any other part of the world. The law also revises a circular called A-76. The revised circular reads, "That in all public and private sector competition for more than 10 positions, a private sector offer would have to be 10% or $10 million less than the government offer to be considered."
What this means is that, if the positions of more than the 10 employees are affected, then the private sector offer would have to be 10 per cent less than the government offer. The A-76 changes have been dictated by the federal employee unions and industry associations.
US employee unions, like the American Federation of Government Employees, have hailed the provisions as being far more equitable to US federal workers. It will also affect small and medium companies in the US which benefited from outsourcing.
As for private sector manufacturing companies...see the following thread:
Info on The American Competition Enhancement Act of 2003 Introduced by Mac Collins
Won't happen if we learn robotics. Some of the kids are learning robotics.
Disagree. Robotics relies heavily on software engineering and the ability to actually build something. America seems bound and determined to ensure only Indians can do that.
Now, inventing new kinds of ways to sue each other might be our path to salvation. :~/
posted on 02/04/2004 10:39:00 AM PST
The robotics biz, begun here in the 1970's, is now almost owned by Japan and China--just like the machine tool biz from which it sprung.
Any better suggestions?
posted on 02/04/2004 10:40:34 AM PST
(Minister of Membership, TomasTorquemadaGentlemen'sClub)
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