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“Off-Shoring the American Consumer into Oblivion.”
Everyone's aware of it, we hear the stories and
the reasoning that outsourcing and Off-Shoring jobs helps companies
be more competitive. The financial advisors and CEOs swear by it,
outsourcing gives them the advantage to compete in today’s market.
First we need to understand the difference between
Outsourcing and Off-Shoring.
Outsourcing has been around for hundreds of
years. Outsourcing is a way to be cost effective, while handing a
process to an individual or group that either specializes in that
process or can do the job more cost effectively. In many cases your
local dentist or doctor will send lab work to another organization for
analysis, this is usually a good form of outsourcing which helps spread
the costs and the wealth.
Off-Shoring is the process that allows an
organization to send the process not down the street, but to an entirely
different country with completely different pay scale, human rights
standards and political agendas.
Off-Shoring can save thousands of dollars in
payroll and benefit costs over the course of the year. Much of what you
hear is true. Here are some examples, the median US income is in the
neighborhood of $70,152 per year, that same position without benefits and
safe working conditions can bring $31,479 in China, $21,386 in the Ukraine,
$18,599 in India, and $45,169 in South Africa per year for a degreed
workers. This is the reason why
many companies have decided to open new offices in other countries or
simple offer business to foreign companies to supply those services,
Call centers, IT services, accounting, manufacturing and even research
and development projects. But the real fact of the matter is that off-shoring
is slowly deteriorating the American way of life and destroying American
government and infrastructure simultaneously. In fact off-shoring is
another term for out-sourcing the American consumer.
Let’s review some facts.
Since 1992, US companies have
aggressively started off-shoring American jobs partly due to heavy
restrictions for H1B visa requirements and the availability and low cost
of worldwide communication breakthroughs in the last ten years.
Although not
actually tracked by any agency of the US government other organizations are estimated
the following: Approximately 200,000 US jobs have been off-shored
each year since 1992 which accounts for 2-3 million jobs total depending on whose
numbers you refer to.
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Losses to the US economy.
Based upon the 200,000 jobs per year lost in the US
are some astonishing figures for the last ten years:
Losses of over
$771 Billion
lost in total buying power for US
families with 1 wage earner over the last ten years and a net loss of
$154 Billion in federal taxes income.
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Numbers Based On 200,000 Jobs Off-Shored Each Year--Some
Research Predicts Higher Levels |
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US Job Off-Shored per year |
Running Total |
Average Income |
Lost Wages Off-Shored to other countries per year |
Avg. Fed. Income Tax |
Lost US Government Income Tax Earning per year |
|
200000 |
200000 |
$70,152.00 |
$14,030,400,000.00
|
20% |
$2,806,080,000.00
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|
200000 |
400000 |
$70,152.00 |
$28,060,800,000.00
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20% |
$5,612,160,000.00
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|
200000 |
600000 |
$70,152.00 |
$42,091,200,000.00 |
20% |
$8,418,240,000.00 |
|
200000 |
800000 |
$70,152.00 |
$56,121,600,000.00 |
20% |
$11,224,320,000.00 |
|
200000 |
1000000 |
$70,152.00 |
$70,152,000,000.00 |
20% |
$14,030,400,000.00 |
|
200000 |
1200000 |
$70,152.00 |
$84,182,400,000.00 |
20% |
$16,836,480,000.00 |
|
200000 |
1400000 |
$70,152.00 |
$98,212,800,000.00 |
20% |
$19,642,560,000.00 |
|
200000 |
1600000 |
$70,152.00 |
$112,243,200,000.00 |
20% |
$22,448,640,000.00 |
|
200000 |
1800000 |
$70,152.00 |
$126,273,600,000.00 |
20% |
$25,254,720,000.00 |
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200000 |
2000000 |
$70,152.00 |
$140,304,000,000.00 |
20% |
$28,060,800,000.00 |
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10 Year loss in Earning and Tax Revenue |
$771,672,000,000.00 |
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$154,334,400,000.00 |
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Lost US Consumer Spending Power @ 75% of total earnings |
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Lost Federal Tax Revenue |
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$578,754,000,000.00 |
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$154,334,400,000.00 |
US corporations need to
rethink the Off-Shoring of American jobs and quickly. If they
don’t, estimates for Off-Shoring American jobs is predicted to be over
15 million jobs sent overseas within the next ten years. Based
upon these predictions unemployment numbers could reach over 21 percent
or higher causing a catastrophic financial recession and cause the US to
lose its lead in the International Money Market.
Related Links:
http://www.businessweek.com/magazine/content/07_25/b4039001.htm
http://management.about.com/cs/people/a/offshoring104.htm
http://www.rttsweb.com/outsourcing/statistics/
http://www.informationweek.com/news/206901364
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