Undersourcing is the American Way

The Way to Hell is Paved with No Intentions

© Marc Leeds
6/28/2007

Outsourcing is easy to understand. Businesses hire outside firms for tasks that would
cost too much to complete in-house. Sometimes those outside firms are just down
the street. Lately, the news on outsourcing is all about American firms exporting
various processes to subsidiaries or other companies located outside the country.
Just last week there was a piece in the news about a U.S. firm that received a
government contract for three million American flag patches for various uniforms.
The company illegally outsourced the job to Taiwan. Companies are able to save
considerable amounts on overhead, but the result is fewer job opportunities for the
American worker. Yes, this way lays the globalization debate.

But undersourcing is a different matter. It, too, has its roots in the desire to hold
down an employer’s costs. In this case, however, the jobs aren’t going down the
street or Madras, India. No, the jobs are just going down in value. How so?

It’s simple. Some employers would rather hire two part-timers than one full-time
employee; refuse to offer benefits such as medical insurance or a retirement plan; or
offer only freelance positions with little prospect for advancement or enhanced job
security.

It’s a slight twist on the “just-in-time” production theory. Hold only enough
inventory or production capacity to manufacture according to immediate demand.
Businesses are able to tap into a desperate portion of the workforce that scrambles
to complete the short-term goals of companies.

Some jobs can’t be exported. The obvious examples are vital services provided by
firefighters, police, paramedics and teachers (though Internet-based distance
learning is beginning to impact the education industry at the college level).

The prospects for the American worker are perilous. As more people seek satisfying
work that fits their busy lifestyles filled with children’s school schedules, PTA
meetings, play dates, after-school tutoring, music lessons, sports practice, ballet,
orthodontist appointments, caring for aged parents, etc., fewer people will qualify
for job-related health insurance and retirement benefits.

There will be more opportunity for off-the-books income, but that negatively
impacts future Social Security benefits and the general contribution to the current
tax base. Off-the-books income can also negatively impact one’s ability to develop
credit-worthiness, a problem faced by potential homeowners and car buyers.

Corporate undersourcing contributes to diminishing the prospects for contract

workers. Workers who intentionally seek only short-term contract employment may
limit their professional upward mobility, gambling that their future financial
capability will take care of itself and that they (and perhaps their family) will not
need any more medical care than they can afford out of pocket.

This is a vicious cycle that has its roots in two laudable goals: corporations need to
care for the bottom line and workers need to put family and personal concerns at the
center of their lives. These goals should not compete with each other. The conflict
arises from our job-related health and retirement systems that discourage creative
people from working for various employers.

Until all workers and their families are covered by health and retirement systems
comparable to other countries (those not spending their nation’s wealth and financial
futures on fallacious wars), America will continue to be beset by companies looking
to get by on the cheap and workers having to sacrifice family concerns so they can
be strapped to a life limited by their cubicled existence.

We need healthy companies. We need healthy families. The current system of

employment-based healthcare and the general difficulty of retirement account
portability takes a financial toll on employers and workers and negatively impacts
the ability of concerned parents from fulfilling their family obligations.

We have reached the point where our traditional employment model has been
overtaken by healthcare, retirement, parenting, care-taking for extended family,
schooling (especially the troubled-learners and those coming from families with
insufficiently educated parents) and a myriad number of other conflicts. Until we
come to grips with the idea that undersourcing is immoral due to its anti-family
nature, we will continue to expand the number of people living at the margins, and
in the long run that means greater costs to the general taxpayer to cover the shortfall
of both companies and families.