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Companies that outsource not hurting just unskilled workers

From Charles M. Kelly, a retired management consultant living in Charlotte (

(Note: because of space limitations, some of the original text was edited out. The omitted text is now in boldface.)

Advocates of globalization have reached a world-record high in duplicity. Prior to NAFTA, they assured us that everyone, including working class Americans, would benefit from unregulated world trade. Sure, we would lose low-skill manufacturing jobs, but they would be more than offset by the increase in high-skill jobs.

Now they're saying that a major reason our chronic unemployment is so high is that corporations can't get enough skilled labor in the U.S., and we need to eliminate immigration quotas for skilled foreign workers. They are in total denial of their own role in the education process.

When newly graduated engineers and scientists enter an industry, their theoretical preparation is completed and their practical education begins. They must learn the proprietary advances their corporation has made over the years, as well as innovations of their industry.

Throughout our nation's history, academic education merely prepared workers to be trained by their employers. The same is true today on a worldwide basis, and the U.S. is at a severe disadvantage because American engineers and scientists make three to four times what they make in developing countries.

When investor and corporate lobbyists persuaded government to abandon any semblance of an industrial policy, they not only made our assembly line workers uncompetitive, they also made our skilled workers uncompetitive.

Even the conservative Forbes magazine, long a supporter of globalization, described what is happening today in an article last month:

"Decades of outsourcing manufacturing have left U.S. industry without the means to invent the next generation of high-tech products that are key to its rebirth....

", for example, couldn't make a product like the Kindle 2 e-book reader in the U.S. even if it wanted to. The electrophoretic displays in the Kindle 2 are made in Taiwan because the expertise developed from producing flat-panel LCDs migrated to Asia with semiconductor manufacturing. The highly polished injection-molded case is made in China, because the U.S. supplier base for electronic packaging eroded as the manufacture of toys, consumer electronics and computers migrated to China. ... The controller board and lithium battery are made in China because - well you get the point."

The article went on to point out the obvious: when corporations outsource manufacturing and give our latest innovations to other countries, we start to lose process-engineering expertise, since it depends on daily interactions with manufacturing. Once process-engineering talent is gone, research talent focused on the next generation of technologies goes with it.

On the CNBC financial cable network, a representative of the German conglomerate Siemens spoke of the difficulty of finding skilled workers in the U.S. and said that they might have to do the same thing they are doing in Germany. Workers there spend half of their first year in the classroom and half on the job. So what’s new?

When corporations outsource manufacturing, we start to lose process-engineering expertise. Once that's gone, research talent focused on the next generation of technologies goes with it.

To put it simply, multinational corporations have abandoned their traditional role of training new U.S. employees and are now training foreign nationals because they are far cheaper. Then they criticize our outstanding education system—still the best in the world and where other countries send their people to study science and engineering. In addition, they have the gall to pressure our government to allow them to bring the foreigners they trained back to fill jobs here.

The class war is over, folks. The established wealthy, the money handlers and the multinational corporations have won. Those who earned a decent income for working hard lost. Losers include not only unskilled workers, but the mass of untrained skilled workers as well.

For The Record offers commentaries from various sources. The views are the writer's, and not necessarily those of the Observer editorial board.
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