posted on Oct, 29 2004 @ 03:53 PM
Healthcare where I work costs the company about 16,500 per employee. (This covers employee's family as well, and includes some life insurance
I have to disagree with your assesment that healthcare (gawdawful as it is) is the driving force behind outsourcing. Since most of the companies that
are tempted to outsource have already gutted their benefits package, and gone to "part-time" and "contract" labor.
I think there are 3 main forces against american employees:
1) The payscale of American workers. Exchange rates in developing countries, and a generally lower standard of living, means that workers in
developing nations can be induced to work for money that would simply not bring workers to the factory in america. Fiddling with benefits cannot
compete with the fact that in many parts of the world, outsourcers need only offer a bare minimum, if anything. USA simply cannot compete with
2) The legal climate in the US. From a legal department's viewpoint, workers in a developing nation are not nearly the liability as USA workers
are, with relatively powerful worker's comp laws. Couple that with Environmental legislation and consumer protection law, and you can see that
dollar for dollar, it is seriously cheaper to operate a foreign factory.
3) Unemployment benefits and Union action. Many developing nations are seriously anti-union. This cuts another level of cost. The fact that the
employer doesn't have to pay unemployment on terminated workers also weighs in favor of parts made in developing nations.
As much as I favor healthcare reform, it will do little to stem the flow of production jobs overseas. This is first and foremost a result of
competitive pressures, as any introductory macroeconomics textbook will explain.
The simple fact is that you cannot keep manufacturing jobs in a first world country, unless the work ends up being automated, which results in the
workers being replaced by machines. Only those industries that require precision equipment and specialized training will keep their production
The other option is another favorite of socialists, protectionist legislation and subsidies for unwanted goods.
As a government, you can ignore economic forces, but you will have to pay for that privilege of doing so, one way or another.