Outsourcing the Facts: The Truth about American Jobs and the Poor

     In Robert B. Reich’s “Why the Rich Are Getting Richer and the Poor, Poorer,” the reader is led to believe that the poor are becoming poorer, that outsourcing is threatening the U.S. economy, and that the rich are the only ones benefiting; however, after reviewing statistical data, one finds that this is not the case.

     Upon investigation, it is revealed that the saying, “the rich are getting richer, and the poor, poorer,” is a falsehood that is not upheld by statistical data.  Tim Kain, a former economics professor and researcher for both Congress and the CIA affirms that, “The poor are not getting poorer, the poor are getting wealthier.”  Not only are the poor gradually finding themselves in better positions, but “in fact, poverty is declining in
America” (Steigerwald, par. 2).  Furthermore, Kain’s research and findings have shown that the poorest twenty percent of American families are wealthier than they were in 1980 (Steigerwald, par. 2).    This is not to say that the poorest people in
America have always been the same families or individuals.  Our nation is a land of opportunity that allows individuals and households to better their conditions, and therefore, it is safe to say that people have moved both up and down on this scale.  In addition, it is imperative to communicate the fact that just as there has always been an upper bracket of the “wealthy,” there will always be a bottom group of people who are considered “poor.”  

     Without a doubt there are people who are truly poor or homeless in our country.  However, by most accounts, a large majority of the twelve percent of Americans that the U.S. Census Bureau deems to be “poor” most certainly are not.  Instead of creating strict guidelines for who falls into the poverty category, there are debates and statistics being used that end up including people “who are retired, who are college seniors, and who are working families that maybe don’t rise above the poverty threshold but are living well” (Steigerwald, par. 5).  Encompassing definitions of poverty allow for people who own their own homes, several television sets, and multiple cars to fall into the Census Bureau’s broad twelve percent figure.  Even though there is much evidence that refutes his claims, Reich sustains that, “incomes are diverging” in
America and that as the wealthy acquire more wealth, the poor are unable to better themselves (Reich, 420).  Reich, the former Clinton Secretary of Labor, holds outsourcing as a major contributor to the imaginary divergence in the distribution of riches, claiming that, “national borders no longer define our economic fates” (Reich 420).

     The globalization of trade and outsourcing of jobs does not harm the
U.S. economy, in fact, research done by the United States Chamber of Commerce points to the contrary.  Often times, when people think of outsourcing of jobs, they do not realize that other countries are doing the same thing.  Taking this into account, one gathers that not only are jobs departing from our country, they are also flowing in from foreign nations through insourcing.  According to the U.S. Chamber of Commerce, “direct foreign investment now exceeds $487 billion dollars and supports 6.4 million jobs in the
United States.”  Additionally, The McKinsey Global Institute assesses “that every dollar of costs the United States moves offshore brings
America a net benefit of $1.12 to $1.14” (U.S. Chamber of Commerce, par. 2).  There is a distinct possibility that outcry over outsourcing is nothing more than jostling for the political upper hand.  Tom Donohue, the Chamber president and CEO acknowledges that “the alarms being sounded about the loss of jobs to foreign countries are motivated by political need rather than by facts” (U.S. Chamber of Commerce, par. 3). 

     Setting the facts aside, some state legislatures and government persons are viewing outsourcing as a serious threat and are taking provisions to penalize corporations who move their businesses out of
America.  The effects of these new regulations could greatly hinder our economy, “stifle competition, drive up costs,” and thus eradicate more jobs than outsourcing ever would have (U.S. Chamber of Commerce, par. 4).  By not allowing American businesses to produce goods for low costs, the
U.S. will lose business as the price tags of American goods rise.  While other countries continue to outsource jobs to both
America and other nations, they will be able to produce and sell the same products for cheaper prices.  It is not hard to see that the
U.S. would be left in the dust as nobody would be willing to pay the high prices for American goods.  Foreign nations would go elsewhere to get the same goods for cheaper.  Donohue warns that “building a wall around this country by limiting business options is a failed economic model and a violation of our own trade agreement, which could start a trade war” (U.S. Chamber of Commerce, par. 5).  Keeping businesses in
America and shutting out foreign investment would be the exact action that would put us all on the same sinking “economic boat” that Reich forewarns us of.  It is evident that the “ineluctable move to where labor is cheapest and most accessible” is actually the smarter move, contrary to what Reich would have us believe. (Reich, 421). 

     In the
United States of America the rich are not the only people who are benefiting from American business practices.  It appears that individuals who asses the situation as such are more concerned about the economic differences between the “rich” and the “poor,” rather than whether or not the poor are becoming wealthier.  Inequality of wealth is far different from absence of any wealth.  Many people view the rich as an enemy because Leftist politicians, who are rich themselves, try to make the wealthy appear as such.  Left-wing officials use unions for political gain and votes.  These political figures align themselves with labor unions who pronounce that
America needs more governmental regulations against big businesses and job outsourcing.  Unintelligibly, the majority of labor unions believe that outsourcing is a means for the rich to get richer: “They are stuck in the mindset of: it is either profits or wage gains, and the world does not work that way” (Steigerwald, par. 9).

     In
America there are freedoms that aid citizens in improving our lives.  Just as the rich have become richer, so too have the poor.  The void that is in-between these two classes is, in fact, filled by a middle class that citizens can economically climb up to or fall down to.  In order to for the
United States to remain the leader of the free world, it is important that it continues to allow outsourcing and, its stronger counterpart, insourcing to occur.  In guaranteeing this, Americans can be assured that the poor will not get poorer, that business will remain globally competitive, and that new jobs will be created and available.