Great American Dream or Nightmare? U.S. Troubles Ahead From Outsourcing White Collar Jobs to Overseas

As kids we were told to study hard and get a good education, then we’d land a well-paying job and be happy and successful-the Great American Dream. For multitudes of Americans who believed and pursued that goal, 2008 was the year those dreams were rudely interrupted.

With the U.S. Dept. of Labor announcing a November 2008 unemployment rate of 6.7%, that meant that 10.3 million Americans wanting jobs were unemployed, an increase of 2.7 million in just 12 months. Whereas in previous U.S. economic downturns mainly lesser educated, blue-collar employees lost their jobs, this time the pink slips are hitting the highly educated hard as well. Rather than just factory workers, this recession’s widespread layoffs also include white-collar employees in such fields as banking, insurance, legal, architecture, and pharmaceuticals. For these recently unemployed white-collar Americans, all those years of education and hard work no longer guarantee success and a rosy future.

The major impetus which has led U.S. corporations to shed white-collar jobs in greater numbers is cost cutting. Since these jobs, which require significant intellectual capital, demand higher wages as well, American companies can save considerably by outsourcing such positions to lower labor cost countries overseas. Only within the past few years have the educational systems of countries such as India and China begun to produce students of a level comparable to those in the U.S. With highly educated workforces recently becoming available at significantly lower salaries in these faraway places, it’s no wonder that our advanced jobs are finally going there.

While outsourcing white-collar jobs to overseas may save corporate America money now, downsides to this practice are perhaps being overlooked. For example, many of those being laid off here have considerable practical experience in their fields of expertise which those overseas workers fresh out of school do not possess. Recently hired scientists or computer technicians in China or India, for example, may cost less, but they’re unlikely to do a better job than the veteran U.S. employees they’re replacing, since they lack the problem-solving skills that come with our years of experience. Time is money, and extra time required for the inexperienced to overcome day-to-day problems doesn’t really save money over the long run.

Ominously, as our highly educated and experienced white-collar U.S. workforce loses jobs to overseas, this country loses much of our advanced skill sets as well. With the rapid pace of change in most fields, it won’t take long until few people are left in this country possessing cutting edge skills. Maybe that’s not an issue as long as relations with foreign countries remain good, but what if, in a few years, relations sour? There’s a real danger that we’ll be intellectually and technically left behind, all because our corporations wanted to save a few short term dollars by outsourcing jobs overseas.

A real national tragedy is that all these millions of laid-off employees here possess extremely valuable skills which are no longer being utilized. For example, within the U.S. pharmaceutical industry thousands of chemists and biologists, who otherwise could still be striving toward the next blockbuster drug, were idled in 2008. What an incredible waste of talent.

Meanwhile, a serious difficulty faced by white-collar workers whose jobs have disappeared relates to what happens after the layoff. Many white-collar jobs are highly specialized, and once the positions which require those particular skills are lost, these workers’ focused skills do not readily translate into a different well-paying field or job. Despite being highly educated and quite intelligent, these job-seekers don’t possess the proper paper credentials to get hired into other advanced fields. All the years of schooling and on-the-job development of their areas of expertise are thus rendered almost useless. As a result, laid off white-collar workers are unlikely to get new jobs at anywhere near their previous salaries.

The financial impact, not only of the immediate job losses, but also on lower future salaries, multiplied by the millions of white-collar jobs lost, translates to an enormous economic blow and threatens future U.S. well-being. The lowered incomes must lead to lowered future demand, thereby setting up a vicious downward economic spiral in the United States.

Corporate America, you may be cost-cutting this country into oblivion, both financially and intellectually. The Great American Dream is on its way to becoming the Great American Nightmare.