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Outsourcing jobs will be an important issue in the US presidential campaign

Inside America

RON CHEPESIUK
***The Democratic presidential candidates have criticised the outsourcing trend. On February 25, sweepstakes winner Kerry outlined a plan to keep jobs in America. The details include not giving federal contracts to U.S. companies that move offshore, requiring companies to give workers three months notice before their jobs are sent overseas and closing loopholes that give incentives to companies to move jobs overseas****
EXiT polls from the Democratic primaries held last Tuesday (March 2) show that that the U.S. economy, not the War on Terrorism, is the big issue on voters' minds this election season. So will George Bush, Jr. be able to convince the majority of the American electorate that he has turned the economy around and that their lives will get better under a Republican, not a Democratic, administration. or will his Democratic challenger John F Kerry convince voters that Bush's economic policies favour the rich and will fail to jumpstart the economy?
important to this debate over the economy is an issue that Kerry will try to exploit and Bush will try to deflate. The issue is called "outsourcing" or "off shoring," and it involves the continuing loss of American jobs to Third World countries, including those in South Asia.
initially, the job losses were mostly in manufacturing. in my home state of South Carolina and neighbouring North Carolina, for instance, at least 200,000 manufacturing jobs have disappeared since Bush took office. Nationally, the U.S. lost one out of six manufacturing jobs between July 2000 and october 2003, according to the National Association of Manufacturers. As the outsourcing trend emerged, the threat of outsourcing didn't really bothered the higher paid, white collar American workers, who largely bought the argument pushed by the country's power elite that free trade on the whole has been good for the consumer and for the country. The workers losing their jobs were unskilled and overpaid and to stay competitive in the age of
globalisation American companies had to move to countries where labour was cheaper. or so went the justification.
Free trade proponents ignored the fact that as the pace of globalisation accelerates U.S. salaries have actually been dropping. For instance, between 1979 and 1995, the medium salary of the U.S. worker dropped from $25,896 to $24,700.
Meanwhile, during the same period, America's rich were getting richer. The top one percent of U.S. families had an increase in income of 78 percent, and the American wage gap between a typical cEo and a typical worker had grown from 40 to 190 times in size.
Most American blue collar workers have always been suspicious of free trade and its so called "benefits." But now they are being joined by a growing number of higher income American workers who worry that their white-collar counterparts in countries such as china and India will take their jobs.
A comprehensive survey released last month (February) revealed that between 1999 and 2004 support for free trade fell in most income groups, dropping most dramatically among
higher income respondents. More specifically, the poll revealed that, among Americans making more than $100,000 annually, support for the idea that the U.S. should have more free trade dropped from 57 to 28 percent. Moreover, the poll showed that among workers making more than $100,000, the percentage of those wanting the U.S. to move towards more free trade stopped or slowed altogether doubled from 17 to 33 percent.
The shift in attitude toward free trade can be understood by examining the outsourcing trend. Historically, U.S. companies and free trade advocates had been successful in downplaying concerns about what free trade would do to American jobs. only non-essential core functions -that is, those functions involving non-skilled workers -- would be outsourced, they assured. But today outsourcing means that jobs of white collar professions such as marketing, information technology, product design, and human and customer relations, are also going overseas.
In an op-ed piece in U.S.A Today, the U.S.' biggest circulating newspaper, Alan M. Webber noted that Americans are starting to hear a new
term: "reverse brain drain." It suggests, Webber said, "that the U.S. is pursuing government and private sector policies that over the long run, could lead to a significant shift in the world's balance of power."
In these insecure economic times in America fear can spread rapidly, and this had made outsourcing an important -- and potentially politically explosive -- issue. The politicians have been scrambling to react. For instance, lawmakers in 15 states are proposing legislation to stem the loss of white collar jobs to lower-wage countries that ranges from imposing a total ban on state agencies sending workers abroad to banning call centres on state contracts.
In 2003, computer programmers in India helped revamp my state's unemployment tax system, but that didn't impress South carolina lawmakers, such as David Wilkins, the powerful Speaker of the state's House of Representatives. "This is state taxpayer dollars going overseas versus going to the pocketbooks of South carolina residents," Wilkins complained.
outsourcing is an issue that won't disappear this election year. Bush's rosy predictions about job growth
hasn't impressed many American workers I've talked with. Many are worried about not only losing their jobs, but also not finding new ones that pay enough to sustain their comfortable lifestyles and provide them with health insurance that can protect against devastating medical illness. They know that many of the jobs that Bush boasts will be in coming months will be in the poorly paid service sector.
The Democratic presidential candidates have criticised the outsourcing trend. on February 25, sweepstakes winner Kerry outlined a plan to keep jobs in America. The details include not giving federal contracts to U.S. companies that move offshore, requiring companies to give workers three months notice before their jobs are sent overseas and closing loopholes that give incentives to companies to move jobs overseas.
Kerry used a nice sound bite that gently pinched the nerves of a growing number of American workers. "It's not hard to see why so many people in the United States think they're working for the economy, but the economy is not working for them," Kerry told students at the University of Toledo last February 26.
In contrast Gregory Mankiw, the Bush administration's top economist has said that outsourcing is "probably a plus for the economy in the long run. Even if that forecast turns out to be true, that's not what most American workers want to hear in 2004. So outsourcing is one economic issue that should help the Democrats this November, especially if the economy doesn't improve.
Ron Chepesiuk, a South Carolina journalist, is a former Fulbright Scholar to Bangladesh, a Visiting Professor at Chittagong University and Research Associate at National Defence College.