(the Business Development Bank of Canada on outsourcing)
(Deloitte’s Global Outsourcing Survey)
(The Privacy Commissioner of Canada)
(the International Chamber of Commerce)
(Pew Research on wage stagnation)
(Conservative Party of Canada’s specific policies are to turn “temporary” workers into permanent residents wherever possible)
1. Offshoring, Globalization, Free Trade
The other posts on outsourcing/offshoring are available here. It focuses on the hidden costs and trade offs society as a whole has to make. Contrary to what many politicians and figures in the media claim, there are always costs to these kinds of agreement. These include: (a) job losses; (b) wages being driven down; (c) undercutting of local companies; (d) legal action by foreign entities; (e) industries being outsourced; (f) losses to communities when major employers leave; and (g) loss of sovereignty to foreign corporations and governments. Intellectual property also becomes a tricky issue. Don’t believe the lies that these agreements are overwhelmingly beneficial to all.
2. Important Links
CLICK HERE, for previous article on remittances and brain drain, the hidden costs of economic mass migration
CLICK HERE, for Deloitte’s Global Outsourcing Survey.
CLICK HERE, for Deloitte, pros and cons of outsourcing.
CLICK HERE, for large companies outsourcing jobs.
CLICK HERE, for reviews of outsourcing companies.
CLICK HERE, for the Business Development Bank of Canada on outsourcing.
CLICK HERE, for CBC article, CIBC workers to be laid off, first are forced to train job replacements in India.
CLICK HERE, for the Privacy Commissioner on confidentiality on outsourcing jobs.
CLICK HERE, for the International Chamber of Commerce’s guidelines on outsourcing jobs to other nations.
CLICK HERE, for chamberofcommerce.org on outsourcing.
3. Context For Anti-Free Trade Take
So-called “Conservatives” and “Libertarians” trumpet the values of free trade, or economic liberty. They claim that removing barriers to trade and employment will result in the enrichment of society as a whole.
Worth noting that these same groups support massive immigration from the 3rd world. The fraudulently titled “Temporary Foreign Worker Program” is a great example. It forces Canadians to compete for jobs against imported, foreign (often subsidized) competition. This hurts workers who struggle to find work which will pay a living wage. Now, we all know the vast majority of these “temps” will never leave, though that has been addressed in other articles.
Corporatists and business leaders support both: (a) free trade; and (b) mass economic migration. This allows companies to get people to work for less, and to outsource jobs much more easily. But while these are profitable, there is little to no societal benefit.
4. Stagnant, Even Declining Wages
A quote from the left leaning Economic Policy Institute. This covers the main causes of wage stagnation. Although written in the U.S, Canada is experiencing the same issues. We should take note of this:
A lot of reasons wages in the U.S. are stagnant. Two big reasons are: increased (often illegal) immigration; and trade policies which outsource jobs to nations with a lower standard of living.
Take this message away: “More” people are now competing for “less” jobs. From a supply-and-demand perspective, it can’t help but push down wages. Pew Research has studied this trend, and concluded it to be a real issue.
5. Connecting: Outsourcing Jobs, Wages, Economic Migration
Mass (economic) migration and outsourcing jobs a.k.a. “free trade”, actually end up serving the same goal, which is to displace workers in their home countries.
How so? Outsourcing high-paying jobs to the third world drives down the SUPPLY of work that is available to Canadians (and to others in 1st World countries). Importing large numbers of cheap foreign workers has the effect of driving up the DEMAND for what jobs remain. The public gets screwed at both ends.
Far more workers available, competing for far fewer jobs. It becomes an employer’s market, where workers are forced to compete based off on who can live off of less. As a result, the real purchasing power of wages has declined over the years.
True, there are factors besides increased immigration and outsourcing jobs. However, they are two big ones, and the impacts cannot be ignored.
6. Lack Of Privacy Safeguards In Outsourcing
To be fair, it is acknowledged that the Privacy Act came into effect 30 years ago, and couldn’t possibly have taken this information age into account.
But think about this for a moment. If you are an employee, your information may still be shared and viewed on foreign lands by third parties. This can happen even if your job has not been outsourced. Potentially, this can happen if any major part of the business has been outsourced.
This is not limited to employees either. Customers or clients can have their personal information used in ways that would violate privacy in Canada, just as long as it takes place in another country. Seems to be an end run around real privacy.
7. Business Development Bank of Canada On Outsourcing
Notice the link never talks about the social costs of outsourcing jobs. People are hurt by mass layoffs. In no way does this advocate for communism or socialism, but there is a real impact to be taken into account when jobs are sent out of country. Not just the workers themselves, but families — especially children — are impacted by this.
There is no mention, or even implication that a company owes any sense of duty or loyalty to employees. This applies not only to newer employees, but to longer term ones. People who may have contributed greatly to an organization are clearly expendable in this mindset.
This is short sighted for another reason. If good paying jobs leave the community en masse, then who exactly is going to buy your products? You need a job, and an income, to buy things.
Furthermore, the same people pushing for outsourcing to lower costs are often the same ones who advocate for mass migration to fill jobs. Why the contradiction? Because it is about creating a larger pool of cheap labour.
8. Forbes: Outsourcing & Company Culture
This Forbes article from 2016, is more balanced in its approach that the last one. This author is blunt about it: outsourcing is mainly done in order to cut production costs.
Here, a major downside is admitted: employees may feel like they’re being replaced. However, we don’t need the words “may feel”, because they are being replaced by outsourcing. There’s nothing ambiguous about it.
9. CBC And Outsourcing At Banks
A surprisingly good article from the CBC outlines outsourcing at CIBC. To add insult to injury, the workers being let go are forced to train their replacements as a last act. In fairness, RBC pulled a similar stunt, and was also publicly ridiculed.
While these banks outsourcing jobs caught a lot of public attention, there are many such actions that do not. As such, the public likely has no idea of how prevalent this issue is, or how many industries it threatens to hit.
10. There Is Always A Cost
Globalist Conservatives and Libertarians love to trumpet the free market, and the potential for economic growth. Yet they never discuss the downsides of these ideals.
They never talk about economic immigration drives up the number of workers in a country, forcing competition against actual citizens. Two such programs are the Temporary Foreign Worker Program, and the International Mobility Program. Students can also work up to 20 hours/week while in school. With more workers, wages don’t rise to keep up with inflation, as there are now more workers to help depress them.
All of these “temps” can usually apply to become permanent residents. This not only solidifies the imbalance, but imports other cultures into Canada. However, this has been addressed elsewhere.
They never talk about how “free trade” policies lead to the outsourcing of jobs, eliminating work opportunities in the host countries. Examples are NAFTA, the Tran-Pacific Partnership, and the proposed CANZUK. Sure, there will be some jobs coming back, though they are likely lower paid, and for less hours.
Who exactly is going to be buying your manufactured goods, if people are losing jobs? Or how will they afford them if the jobs don’t pay enough? How do communities benefit from exporting their employment opportunities?
There is always something else to consider.