Outsourcing revisited

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(Host) Outsourcing of jobs has been much in the news lately, but commentator Ellen David Friedman says that the problem isn’t new.

(Friedman) In 1980 I began to train as a machinist, hoping eventually to find work in one of the high quality machine tool shops in Windsor County’s Precision Valley. But I was too late. The factories were already being closed and work sent south, in what we then called the phenomenon of “runaway shops” – what we now call outsourcing. The outsourcing of American jobs, though it has only recently gripped the public mind, has – by its many, varied names – always been with us.

Outsourcing is inevitable in a market economy because cutting the cost of production to maximize profits is the iron rule. This operates continuously and permanently. And since labor is the one cost of production that can never be entirely eliminated, it will always be driven down to its lowest possible level.

As the job hemorrhage has moved from manufacturing to white collar jobs, the alarm has grown. Governor Douglas finds himself having to answer to public concern about the outsourcing of state work. His signature on the Central America Free Trade Agreement or CAFTA, has been challenged by the Vermont AFL-CIO and some legislators. This agreement, not dissimilar to an earlier one signed by Governor Dean, is alarming because it limits our own government’s ability to protect jobs. And Vermonters have a right to ask why this agreement was signed without any public comment or legislative review since, after all, it is our jobs at stake.

Government can actively promote job creation, or can follow policies that lose us jobs. Presidents, for example, have differed in this regard. Since World War II, our Republican Presidents have presided over an average monthly growth of about 100, 000 jobs. For Democrats it’s averaged about 200,000. Unfortunately, according to the last available numbers from the Burean of Labor Statistics, our current President has been losing us around 60,000 jobs a month. This isn’t an act of nature, it’s a strategy, and outsourcing is at its heart.

Moreover, as is well known by now, even when new jobs are created they pay less, are less secure, and have fewer benefits. Our economic foundation is precarious and weakening fast. But we can choose to stabilize our economy, rather than being crushed by it. As one example, Bernie Sanders is sponsoring a bill with 50 other members of Congress that would withhold federal grants and loans from companies that are cutting jobs here while adding jobs elsewhere. There are tax and trade measures, and the enactment of high international labor and environmental standards that would help bring outsourcing under control. At every level of government we can choose a high road path of economic development rather than the race to the bottom.

I’m Ellen David Friedman.

Ellen David Friedman is vice chair of the Vermont Progressive Party and has been active in the labor movement for 25 years. She spoke from our studio in Montpelier.

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