Charlie Rose

Michael  05/21/2007 02:08 AM Report

I regularly watch Charlie Rose, and the interview with Alan Blinder (4/25/07) was particularly relevant to my situation. (I also found interesting this interview with Senator Byron Dorgan on 7/27/07, but Professor Blinder spoke more to the circumstance of the outsourced American worker, and thus I am compelled to comment now and to both interviews.) I am one of those high tech workers whose job was moved abroad, and I even had the strange experience of helping to train those who were to carry on my task. I'm not opposed to American companies who choose to have foreign workers. Globalization is reality. But to Prof. Blinder's comments about the need for better laws and regulations relating to the outsourcing of jobs and the treatment of affected workers and affected communities, I totally agree. Based on my experience, I would like to offer three suggestions.

1. In this country, age discrimination is illegal. Within the borders of this country, a company cannot fire or lay-off a group of older workers and replace them with a younger group of workers. The same law should apply to global companies that outsource work wherein a group of domestic older workers is replaced by a group of younger workers abroad.

2. American law allows a wide berth to corporate actions that are based on clear economic reasons. And though there may be a clear economic advantage for a corporation to move work abroad, implicit contracts made to its American workers should not be broken. To this point I'm specifically referring to pensions.

Where I worked, with sufficient years of service, you could retire at age fifty. The company rules concerning the pension program were quite clear, and the pension was used effectively as an incentive for continued good employee performance. For example, if you chose to leave the company at any time before age fifty, you would get a significantly reduced pension (a.k.a. "a deferred pension" worth (at most) about seventy-five percent less than "a full pension"). Likewise, if you performed poorly or if you worked on a product which failed in the marketplace, you were likely to be released and given the deferred pension. In sum, the company said if you work hard on a profitable product until you are fifty, you would receive a reasonable pension.

I worked for my prior employer for nearly twenty-two years. I worked hard and was well rated in all of my performance reviews. The product on which I worked is still in production, and it makes large profits for the company. My component designs and the software elements which I wrote are still being used. I'm now about three years from age fifty. To this point in time, I did all that was asked of me to achieve a full pension, and yet, since there is no regulation or law concerning pension treatment in the face of outsourcing, the company said that I did not qualify for the full pension. In a case such as this, there should be a law to mandate a prorated full pension.

3. When high wage jobs are outsourced, the corporate costs incurred for the â??force reductionâ?? (i.e. severance packages, legal fees, training of the new workers, etc.) are actually recovered quickly. In my case, I estimate it was less than one year. The company undertaking the action achieves an immediate and huge reduction of labor costs in the range of 60%-80%. This reduction goes strait to the bottom line and shows up as new and continuous profit. The reality though is that the savings is a result of a gross arbitrage condition; the profit is unearned and undeserved. Hence I propose that it should be temporarily taxed, for the two years following the action, as a windfall profit (akin to that levied against the oil companies in the 1980â??s). Proceeds from the tax should be used to cushion the community and state impact of the outsourced jobs â?? in particular, to help schools which suffer from the sudden loss of what had been a stable tax base, and to help state level unemployment agencies to extend the scope and duration of their benefits.

If these three ideas were adopted as regulation or law, the incentive for corporations to outsource work would be reduced, the rate of outsourcing jobs would be slowed, and adaptation for a portion of the high tech middle class might be feasible.