Steps to Minimize the Effects of Outsourcing

Source: Wise to social isues

What can be done to mitigate the impact of outsourcing on the American economy?

While the outsourcing of American jobs presents a challenge for workers who have lost their employment to foreign competition, steps can be taken to minimize the negative impact of outsourcing on the American economy. Training programs can increase the chance that an employee who has lost his or her job will be able to work in another field. Incentives offered to students to earn degrees in math, science, and engineering---disciplines that typically have resulted in high paying jobs---could boost the earning potential of a new generation of young professionals. Improved access to broadband technologies in neglected rural and urban areas could open workers otherwise unaware of the ways in which technology is transforming the economic landscape to the potential of the digital economy.

Adjustments to the American tax code, the introduction of policies that spur new business in burgeoning industries, and the strengthening of labor unions would all serve to insulate the American economy from the impact of outsourcing. New policies and programs are needed to increase the employability of people moving into the job market or dealing with a job loss due to outsourcing. Senator Hillary Rodham Clinton contends that the expansion of existing government programs---like the Trade Adjustment Assistance Program, designed to retrain and provide financial assistance to people who have lost manufacturing jobs---and adjustments to the tax code to stop providing incentives to companies who send jobs overseas are crucial to protecting the American economy from the consequences of outsourcing. She also identifies a need for institutions of higher learning to attract students to the fields of science and math, disciplines in which the United States has been losing ground to countries such as India and China. She laments the coverage of broadband Internet technology in America, pointing out that the United States ranks eleventh in providing network access to its citizens. She states, "We have to equip businesses and workers to become even more competitive, further develop the digital economy, and work to end trade and tax practices which undermine competitiveness."

Robert D. Atkinson, of the Progressive Policy Institute, who suggests that while the new economy might be preventing people from achieving the "American Dream of owning a home, buying a car, and providing economic security for one's family," the government and industry can work more closely together to define and promote new classes of jobs to replace redundant positions. During the transition away from low-wage industries, Atkinson argues for reforms in labor laws that fortify the position of workers in collective bargaining sessions. He also advocates the adoption of a universal health care policy and promotes the indexing of the minimum wage to inflation. Tax policies that eliminate the advantage that the rich have over the poor would further reduce the impact that outsourcing has on the American economy. He argues that low-paying jobs do not need to be preserved if technologies and efficiencies result in their loss, but during the transition to an economy in which these jobs might be lost to overseas competition, more should be done to create new jobs and concomitant skills.