In Congress and Obama ignore the anguish of 99ers and the long-term unemployed it was mentioned how both Congress and Obama are ignoring the human toll of long-term unemployment. But special attention needs to be paid the GOP for their disregard of jobs legislation and unemployment benefits extensions.
Job Outsourcing
In September 2010, Senate Republicans beat back a Democratic attempt to end tax breaks for corporations that send jobs overseas:
Senate Republicans beat back an effort by Democrats Tuesday to end tax breaks for companies who send jobs offshore only to import products back into the United States.
While that bill also had some support of four conservative Democrats, the GOP essentially blocked the bill from becoming law. Why is that important today?
Truthout: The paper (Wall Street Journal) surveyed employment data by some of the nation’s largest corporations — General Electric, Caterpillar, Microsoft, Wal-Mart, Chevron, Cisco, Intel, Stanley Works, Merck, United Technologies, and Oracle — and found that they cut their workforces by 2.9 million people over the last decade while hiring 2.4 million people overseas.
While that statistic is disturbing, it’s the following conclusion that bodes ill for the American job market going forward:
Another question asked of the executives found that the top reason for companies to outsource was to “reduce operating costs” (46 percent of respondents).
As you can see, American companies are sending millions of jobs to other countries to reduce operating costs. Reducing operating costs is usually corporate-speak for cutting salaries and benefits.
The Truthout article links to a Conference Board gathering titled: Maximizing Outsourcing Strategies in Challenging Time, which shows the complete disregard for American workers facing the prospect of having their job outsourced. What follows are a couple snippets from the outsourcing conference document.
The financial services industry is the largest user of offshoring, followed by the manufacturing and software development sectors. Most of the countries that offshore have headquarters in the United States, Western Europe, or Australia.
Yes, the financial services industry. This same industry headed by Bank of America, Goldman-Sachs, JPMorgan Chase, and Citigroup robbed the taxpayer of trillions of dollars of bailout funds and continues to punish the taxpayer by off-shoring jobs to other countries.
Companies in the United States are increasingly choosing Latin America or Eastern Europe instead—for instance, Mexico, Colombia, Poland, Russia, Estonia, and Romania are growing in popularity.
American companies, which reaped financial riches in America, relied on American infrastructure for their growth and depend on American military for their defense, are shipping millions of jobs to other parts of the world at the expense of the American worker and taxpayer.
And outsourcing is an incremental process, which shows that companies are not stopping at simply outsourcing menial tasks, but entire, complex departments:
An increasing number of companies are offshoring jobs that require a greater amount of analysis. But sending such a job overseas needs to be done in incremental steps. Start with data entry and then build up to accounts payable, followed by the issuance of financial statements and notes. You will eventually rely less on teams in the United States and more on the leads in other locations.
Isn’t it nice to know that companies are planning long-term to send jobs overseas, job by job, section by section, and department by department? This slow, insidious process promises to end the jobs of millions of Americans.
Equally offensive was the use of the word “cheap labor” in their description of why most companies choose to offshore:
While finding cheap labor is still an underlying reason for choosing a particular location, companies are increasingly considering the location of the best provider in terms of geographical proximity, or “near shore.”
Instead of using a more palatable description such as “less expensive labor”, or “more cost efficient labor” they came right out and said “cheap”. That description seemed rather clumsy and arrogant coming from a respected organization such as The Conference Board, but then again, it may be accurate:
Cheap (and) inexpensive agree in their suggestion of low cost. Cheap now usually suggests shoddiness, inferiority, showy imitation, complete unworthiness, and the like: a cheap kind of fur. Inexpensive emphasizes lowness of price (although more expensive than cheap) and suggests that the value is fully equal to the cost: an inexpensive dress.
Many American companies are deciding to produce goods using shoddy and inferior methods instead of American labor and materials which made these same companies wealthy. The entire document is worth your time to read in order to get a better feel for the reasons companies continue to outsource.
Besides cheap labor why are companies outsourcing?
Why are so many large US companies outsourcing American jobs? Is it because of poor profits? Is it due to burdensome American taxes? The answer to both questions is NO!
Slate: According to the Bureau of Economic Analysis, real corporate profits neared an all-time high in the last three months of 2010, with companies raking in an annualized $1.68 trillion in pre-tax operating profits.
CNN Money: And taxes have been an easy way to keep profits high for most corporations: From August 2008: Nearly/ two-thirds of U.S. companies and 68% of foreign corporations do not pay federal income taxes, according to a congressional report .
Many unemployed paid more taxes on their unemployment benefits than one of the largest US corporations, GE:
ThinkProgress: Last week, the New York Times reported that, despite making $14.2 billion in profits, General Electric, the largest corporation in the United States, paid zero U.S. taxes in 2010 and actually received tax credits of $3.2 billion dollars. The article noted that GE’s tax avoidance team is comprised of “former officials not just from the Treasury, but also from the I.R.S. and virtually all the tax-writing committees in Congress.”
What is Congress, especially the GOP controlled House, doing about this continuing jobs outsourcing disaster? Very little, but that may be changing. Crew of 42 highlighted a GOP co-sponsored bill that would look at bringing outsourced jobs back to the US:
Congressman Forbes is cosponsoring the Bring Jobs Back to America Act. If passed, the bill will require the Secretary of Commerce to develop a national plan to energize manufacturing and bring back jobs from overseas. It would create task forces to identify all American companies with manufacturing operations overseas and work with state and local governments to help return these jobs to the U.S. It would also set up a study of tax incentives to encourage the return of U.S. jobs.”
Let’s hope that the GOP is ready to tackle the real problems that face the American worker and not spend so much time and effort working for the wealthy and corporate elite.
Both parties are guilty of dropping the jobs ball, but now that the GOP is in control of the House, it’s their responsibility to drive jobs legislation and at that task they have, so far, failed miserably.
"Look What We've Done"
99er Bud Meyers sent a music video that describes the outsourcing problem perfectly. It’s called "Look What We've Done". You can read Bud’s interpretation of the video at "Look What We've Done" - Pete Rivera of Rare Earth. The music video is also attached to this post.
H.R. 589
There has been little news of late regarding the status of H.R. 589, which would add 14 weeks of extended benefits for all unemployed, including 99ers, who have exhausted all unemployment benefits.
Rep. Lee did an interview on The Daily Rundown and she reiterated her support for extending unemployment benefits. She is a staunch advocate for the unemployed and financially vulnerable who will continue to fight for passage of H.R. 589. That battle will be difficult in a GOP controlled House, but it’s a battle worth fighting. In March, an additional 127,000 unemployed reached the 99 week mark. Those out of work for 99 weeks or more is at record levels and that trend isn’t likely t end soon. Passage of H.R. 589 would help millions of unemployed avoid financial disaster.
You can watch the Rep. Lee interview at; Rep. Barbara Lee Discusses the Need to Extend Economic Recovery to the Most Vulnerable
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