A home advantage for U.S. corporations
By Lou Dobbs
CNN
(CNN) -- The loss of millions of manufacturing jobs and hundreds of thousands of service jobs over the past few years, and the threat of the loss of millions more to offshore outsourcing, is a clear call to our business and political leaders that our trade policies simply are not working. At the least, not in the national interest.
The exporting of U.S. jobs to cheap foreign labor markets has produced nationwide pain from our nation's major cities to our small towns, in urban and suburban America.
Obviously, I'd prefer Corporate America to stop the practice of offshore outsourcing because of the dictates of their consciences and recognition of this country's traditional values and good corporate citizenship.
But if U.S. multinationals instead invoke the code words of competitiveness, efficiency and productivity -- when what they really mean is the cheapest possible price for labor -- then we must insist on new laws and regulations to stop it.
Not all companies would have to be regulated to do the right thing. Some are finding ways in which to keep American jobs in this country and keep their commitment to employees and communities.
Most U.S. multinationals that outsource, or ones that plan to do so, generally cite a 40 percent cost savings per exported American job as their main reason for doing so.
A New York state outsourcing study, says Howard Rubin, executive vice president of META Group, recently concluded that the actual savings figure is closer to 20 percent.
Sure, the labor itself may be cheap, but Rubin said the hidden costs that many companies ignore could level the playing field in a hurry. Costs like corporate planning and training, making the transition abroad, severance and layoff fees, travel, security and the chance of losing business from customer complaints can easily cut into those savings by more than half.
"The rush to Indian call centers was driven by cost," Rubin said. "It was a semi-robotic approach that was driven by people doing technical diagnosis...But the myth and reality are now crossing each other," he said. "Especially with things that require secure communications or severe risk management, suddenly a worker in India and a worker in Utica [New York] are at parity."
That parity is not only good for the corporate bottom line, but it could mean one more unemployed American back on the job. Quality and public relations concerns, political backlash and potential lost business already caused a few well-known companies to repatriate their call centers to America's small towns.
Dell recently brought a call center back from India after repeated customer complaints, planting itself in Twin Falls, Idaho. I can only hope this becomes the new trend in so-called corporate cost savings.
Other companies have either moved from bigger cities or simply set up call centers in small towns. U.S. Bank contemplated a move to India, but eventually decided to put the call center for its credit-card division in Coeur d'Alene, Idaho, a city of less than 40,000 with high unemployment. Also, financial services call centers from companies like American Express and Citi Cards, a division of Citigroup, have boosted the local economy of Guilford County, North Carolina.
Many of these locales are equipped with empty warehouses and factories to support call centers and corporate offices for even large businesses. Still, many companies would rather export jobs to cheaper labor overseas than provide steady work for unemployed Americans in these towns and cities.
It's time to insist that Corporate America find a conscience and demonstrate true innovation to keep jobs at home, or we have no other recourse than to demand new laws and regulations to end the exporting of America.
