We keep hearing how the economy is improving but that the unemployment problem is just getting worse. Last weeks drop in the unemployment rate has much to do with people who have given up looking for a job. With a loss of over 200,000 jobs, although much better than the losses of months prior, it still points to a long road to any substantial recovery that benefits the average American. One of the main reasons this recovery may be a "jobless recovery" is the constant and increasing outsourcing of the solid middle class jobs necessary for a recovery that benefits everyone.
Some of the professional jobs that are now leaving are graphic artists, accounting clerks, radiologists, back office financial services, phone center workers and even 401(k) record keepers. What these jobs have in common is a solid middle class salary and benefits. How can American workers compete with workers who earn less than $10,000.00 per year? The answer is they can not unless the playing field is leveled. The best way to level the playing is field is to make it prohibitively expensive to move the job in the first place. How exactly can we do this legally? My answer is The Outsourcing Severance Act of 2009. What would this piece of legislation do? It would set standards for severance pay for any job leaving the country and give the terminated employee a safety net while seeking other employment. The details of my plan would be as follows:
The terminated employee would receive 2 weeks severance pay for every year of service as well as 75% of the difference between the compensation of the new vs. old employee. Using the example of a 10 year employee earning $50,000.00 who is losing their position to someone in Mumbai earning $7,000.00, that employee would be entitled to $19,230.00 severance as well as $32,250.00 pay differential. Also the employee would remain part of the payroll until the total severance owed was paid using his last salary as the barometer. In the case just described the employee would remain on the payroll for over a year and be entitled to all the benefits of employment even though he would be free to work elsewhere. In year two the terminated employee would be entitled to the 25% difference not paid in year one. This would mean that the full savings from outsourcing would be delayed until year three.
Why would I make this severance so generous? The answer is twofold. It would give the terminated employee a chance to be retrained or seek other employment without having to immediately worry about how to make ends meet and it would discourage the so called "titans" of industry from outsourcing the jobs in the first place. Executive bonuses are usually directly tied to the company’s bottom line so outsourcing jobs leads to higher pay and bonuses for those at the top and misery for those at the bottom.
Why we must do this is simple. The middle class is being killed. As more and more jobs are outsourced and our population grows there will be greater competition for the jobs that are left. This causes wages to actually drop while all normal expenses are rising. This is a disaster in the making. I have personally known five people in the past two years who have lost their jobs to outsourcing. All five were forced to take lower paying positions in order to make ends meet. This will be the fate of hundreds of thousands more if we do not demand a level playing field.
One more way we can help to level the playing field is by supporting Health Care Reform. One of the missed opportunities in this debate was correlating the high cost of health insurance with the outsourcing of our jobs. It has made even mid size and small American companies look for outsourcing solutions because they simply could not keep up with the spiraling health care costs.
I want to expose the companies that are outsourcing our jobs. I am asking everyone to send company names, type of positions, numbers outsourced and salary differences if known. I have a website called Save The Middle Class and my plan is to add to the site a reference page which will list the companies that are shipping our jobs overseas. Go to the site and click on contact and send me the details. I want to know that my hard earned money is not supporting a company who does not support the American worker. I do not view this as protectionism but a real struggle for survival of the middle class. We are headed down a very dangerous road and unless we change course we will be ensuring the continual decline of our standard of living.