Outsourcing
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What do a radiologist and an assembly line worker have in common? After all, one is a white-collar worker in a small town hospital and the other is a blue-collar worker in a large city factory. The answer is that they are both being outsourced. Outsourcing is the moving of services or the moving of production of goods to another location. The radiologist’s job went to India and the assembly line worker’s job went to Mexico. Outsourcing has grown along with the explosion of Information Technology (IT) in the last 15 years. The explosion of Information Technology (IT) does not seem to show any signs of stopping. As jobs continue to leave the United States, the effects of outsourcing remain a challenge for both white-collar and blue-collar workers. Due to outsourcing the American blue-collar and white-color workers are faced with the negative impact of losing job security, the pitfalls of job retraining, the compromise of personal security, and family impact.
After the Great Depression, the parents of Baby Boomers never had to be concerned with layoffs or outsourcing; especially white collar-workers. Employees in the auto industry coped with layoffs but never for long. Outsourcing was not an issue like it is in today’s society. In the 21st century, job security is no longer taken for granted by white-collar or blue-collar workers.
Going to college was always assumed if you received a good education and received a degree one would be rewarded with a good paying white-collar job. Forrester Research (2004) states that at least 3.3 million white-collar jobs and $136 billion in wages will shift from the United States to low cost countries by 2015. Many of these white -collar jobs are private sector jobs in Information Technology (IT) and human resources. They are the jobs of computer science majors and engineers. These individuals were hired as fast as they graduated. Now their jobs are being taken away from them and sent to India and other foreign countries. Adding insult to injury, some IT workers have had to train their replacements.
Medicine has always been a safe and secure field to enter but not anymore. Imagine taking ones child to the emergency room with a complicated fracture. The doctor orders an MRI or a CT scan. As one waits, the images are sent by computer to India where a radiologist confirms the type of fracture and replies to ones doctor because an in-house radiologist no longer works there. Incidents as this are described by Friedman (2006). The bill comes from the hospital, but the long itemized bill was not done by the hospital either because they outsourced their billing to a foreign country.
Blue-collar workers are not new to outsourcing. Auto workers have experienced it for years, but in southeast states as North and South Carolina, textile mills have been closing for a long time. American shoppers now find clothing labels that say made in China, Hong Kong, Pakistan, Korea, Dominican Republic, Vietnam and many other countries. Clothing that says, “Made in the U.S.A.” is rare.
Besides clothing, other household items are being outsourced. In Greenville, MI there was a plant that made refrigerators. The plant had been there for 100 years. Electrolux, the current owners, announced in early 2004 that the plant would close by the end of 2005 because they were moving operations to Mexico. City officials, state officials, the governor, senators and congressmen all tried to save those 2,400 jobs. Electrolux was Greenville’s largest employer. In the end, Electrolux chose to go to Mexico (Doolittle, 2004).
Job retraining and new employment are not guaranteed when a job is outsourced. In an interview with Lou Dobbs of CNN, Glassman states that one of the things about a dynamic economy is we do not know where the jobs are (Dunbar, Ed, 2006). How can a worker get retraining and look for a new job if economists do not know what the new jobs are and where they will be? Many white-collar workers that have lost their jobs have already achieved their career goal. Blue-collar workers are often being outsourced in their 40s and 50s. When one is in their 40s and 50s, one may find that it is hard to change jobs at that point in life and maintain a standard of living.
White-collar workers in IT and medicine often have hints that their company will be outsourcing. Many are given severance packages that carry them a few months out. Depending on their age, they are given early retirement packages. Many workers in their early 50s are not ready financially or emotionally for retirement. If they are lucky enough to find a new job, often they are working at a fraction of their previous income.
When factories outsource, blue-collar employees are frequently offered retraining financed by the company and/or by the state and federal government. For example, according to Emrich (2006), the Grand Rapids, MI Community College is offering job assistance and retraining through its Older Learner Center for the worker who is 55 or older. Sometimes though it is not enough and there is still no job to find in the end. Debbie is a worker whose job was outsourced in Holland MI. After retraining as a medical assistant (and getting straight A’s in the program) she has been unable to find a job after two years of looking. She is working as a cashier at a local home improvement store for much less than she made at her factory job. She is 52 years old. White-collar and blue-collar workers must also face the challenge of losing their personal security. Their medical and personal financial information is at risk because of outsourcing. According to Outsource Outrage (2004) there are several ways that personal security is at risk. Workers in foreign countries do not have any incentive to value loyalty to the company. The security measures of off shore company computer networks are not as strong. There is more corruption and bribery in countries providing outsourcing. Lastly, many countries do not have the strong laws that the United States have regarding personal security.
A Pakistani woman doing billing for the University of California San Francisco Medical Center threatened to post patient confidential records on the Internet unless she was paid more money (Dunbar, Ed., 2006). The BBC reported a story about employees of an Indian call center for Citibank that were transferring larger sums of money to fake accounts using the information from existing customer accounts according to Outsource Outrage, 2004.
Outsourcing white-collar and blue-collar jobs have a huge impact on the family. Job loss is one of life’s greatest stress