The flip side of exporting American jobs

Aziz, Analyst, Kuala Kencana, Papua, aziz9672@yahoo.com

The heated debate over jobs draining out of America to developing countries, primarily to India, China, the Philippines and Latin American countries that started several months ago, does not look like it will end soon. It now has even more political resonance with the U.S. presidential election drawing near.

Two key terms have become like a mantra in that they have been frequently debated and analyzed: Outsourcing and exporting (American) jobs. Some say that outsourcing is good, while others say that it is bad; both views certainly cite the best interests of the American people and economy.

What makes the Americans worried is that most of the jobs flowing out (outsourced) require somewhat sophisticated skills, whether jobs in offices, call centers or software programming. These jobs require, at the least, computer literacy and/or English fluency. This poses a dilemma for Americans: They need the jobs, but cannot accept the low level of pay of workers of developing countries.

Times have changed. Remember, years ago, when Nike contracted Michael Jordan for its commercials at a cost that equaled the annual total paychecks of all Indonesian laborers for Nike -- who at that time comprised a significant contribution to Nike's global production? What would happen if Jordan's paycheck was distributed among the Indonesian laborers? Would the Americans feel threatened? In a word, no, and it is not difficult to understand why. Because this would not make the Americans jobless and they did not want the shoemaking jobs anyway.

In any case, arguments about outsourcing may raise eyebrows: America is supposedly the champion of free trade, and now it resents outsourcing? Free trade is believed to be the best way to allocate resources; to enable producers and customers to enjoy the maximum benefits. And this optimum allocation is best represented by higher quality products (goods or services) at reduced prices.

Competition then enters a formula whereby customers choose producers who are able to offer better products and better prices, or vice versa. It is obvious then that outsourcing -- as an attempt to make the allocation of resources more efficient by finding suppliers who can offer the best bid -- is the natural child of competition. Again, why resent outsourcing? Simple answer: Because while it is a champion of free trade, America is also a champion of securing its national interests.

But whether outsourcing is good or bad, or regardless of how America responds in protecting its national interests, this debate shows one of America's great strengths: Every argument is turned upside down and inside out. Take Lou Dobbs at CNN, an anchor who endurably featured this topic in his Lou Dobbs Tonight. Countless politicians, economists and businesspeople are invited to examine the validity of his opinion that outsourcing is bad.

Responses to his show have been enormous. Gerard Baker of the Financial Times called him the "high priest of demotic sensationalism." An editorial in the Economist magazine accused him of embarking "on a rabidly antitrade editorial agenda" and "greeting every announcement of lost jobs as akin to a terrorist assault."

To all of which he responded by challenging them to answer his questions. (In his words) One:" How many more jobs must we lose before they (i.e. the critics) become concerned about our middle class and our strength as a consumer market?

Two: When will the U.S. have to quit borrowing foreign capital to buy foreign goods that support European and Asian economies while driving us deeper into debt? Three: What jobs will our currently 15 million unemployed workers fill, where and when?"

If his critics could provide a definitive answer, Lou Dobbs said he would gladly change his opinion that outsourcing is not good for America.

Lou Dobbs further refused to be labeled a protectionist only because he wants to curtail the export of American jobs to cheap foreign labor markets just to reduce wage levels, and to eliminate trade deficit and to pursue balanced trade policies. He pointed out that principal trading partners, Canada, China, Japan and the European Union, all typically maintain annual trade surpluses and pursue balanced trade. Why don't the critics call them protectionists? Why not call them economic isolationists?

Without a doubt such a debate is an educational resource for common people because so many angles are represented -- with their own strengths and weaknesses. The basic principle of journalism, to cover both sides of the story, is also practiced without hesitation. The fluent, well-structured and concise views that each side conveyed -- with supporting data and logical arguments -- showed how articulate the people of this nation are. Thus, expecting an "informed decision" would not be a too distant prospect.

However, to what extent this debate actually contributes to policymaking is questionable, and worth observing. Because after all politics plays the most vital role in policymaking, and sometimes it takes more than common sense and goodwill to come to a decision.

On the other hand, this debate quickly impressed that Americans are confused. Their high standard of living is at risk as foreign laborers begin to be paid more for better quality work. Right or wrong, this idea leads to the following conclusive question.

What we are witnessing is this developed nation struggling to make a difficult choice, and learning to choose between hope and fear. Hope that free trade (e.g. letting go of outsourcing) would ultimately restore the economy and people's jobs, and fear of loosing the margin of U.S economic competitiveness faster than expected, even faster than realized.

But what is life if not full of imperfect choices?