It is clear that with a 10% unemployment rate in our nation, something is fundamentally wrong. My undergraduate and graduate students are quick to declare that though the mortgage crisis and unspent stimulus dollars contribute to the current rate, the problem is more structural. For them, it’s due to companies sending jobs overseas to people who are willing to work for little or nothing.
However if we stop there, we might be inclined to look for the wrong kind of solution, or one that requires action after the fact—after the jobs have already been outsourced. Let’s take the case of a factory that says that it needs to shut down and outsource its labor in order to remain competitive. The tendency might be to think that a public relations campaign against this traitor or government intervention should be undertaken in an effort to hold on to jobs. But advocating for either action would probably miss the point. If we agree that something structural has caused the outsourcing trend, how could it be said that we’d be missing the point by advocating for some kind of corrective action?
Glad you asked.
Government interventions and efforts to shame companies into doing the right thing don’t always achieve the desired result. And even when they do, they cannot be thought of as a permanent solution if they get in the way of companies’ primary goal of ensuring that shareholders are happy. This is accomplished by making sure that the stock price continues to rise — the higher the stock goes, the happier the investors are.
Well, who are those investors? Are those the greedy jerks that pulled this country toward financial ruin?
Actually, it’s not them. It is you and I. It is those of us who buy and sell stocks, have mutual funds, contribute to 401Ks (more like 201Ks after the crash) and look for consistently high returns. It is those of us who have pension plans whose balances are maintained by ensuring that there is enough growth in the pool of monies. So it is in the best interest of all of us, as shareholders, that companies remain profitable. Here is a question that must be asked: Are we willing to have less retirement money or lower returns? The answer to that question is, of course, a resounding no.
There is another angle to this discussion. We expect that when we go to a store, we will get the highest value at the lowest price. To make sure we’re getting the best bang for our buck, we use the Internet or even bar code scanners on our cell phones to research exactly what we ought to be paying. When a company cannot match this price we take our business elsewhere.
So how does a company manage? How does it keep its profits growing and at the same time, provide customers with the best value for the best price?
If you answered by cutting expenses, you would be half right. If you said, cut the most significant expenses, salaries and benefits, you would be more right. If you were to say cut the most significant expenses without sacrificing quality and price, you would be exactly right. It is not a stretch to conclude that one of the ways in which this is most effectively accomplished is outsourcing some of the tasks that are repetitive and expensive. So in other words, to want jobs to “come back” in great numbers, is akin to saying that we are willing to accept higher prices at the registers or lower returns on our investments. For the most part we are willing to accept neither. As long as this is so, large numbers of outsourced jobs are never coming back.
Never.
But workers need not be discouraged. Those who realize that the current economy is, and for the near future will be, fueled by brainpower and information will be secure. That does not mean that a degree in computer science is necessary in order for an individual to be able to compete—far from it. What it does mean is that whether we are talking about individuals, groups, or companies, we are all making the biggest strides by purchasing experts’ knowledge, ideas and information. Those who can provide these resources consistently will be compensated well in this new economy.
The good news is that a good idea does not have to come from a techie. However, it does have to come from someone who knows what they are talking about, knows how to communicate their knowledge and has the experience to apply what they know in different settings. Regardless of whether or not you are working in a corporation or are self employed, the questions are: Are you developing some kind of expertise? Do you know things that others don’t know and are unwilling to learn?
If all you do are repetitive tasks, even if done with high-priced software, then your position is expendable. Expect your job to be moved overseas. But if you are learning something right now that will cause your company (or any company) to be more profitable, more efficient and ultimately more successful, you are creating space for yourself in the new economy. If you are not, now is the time to start. You must make learning a personal habit, positioning yourself with what I call a knowledge-based pension. I say that because it is this habit that will take care of you when you decide to stop working, if you ever indeed decide to stop. When you habitually carve out new expertise, you will not be subject to the fits and starts of the economy. You will live on your ‘pension’, even if you never retire.
