Michael Faulkner, Sr. VP, The

Michael Faulkner, Sr. VP, The DMA spoke on American protectionism and Legislation. We are in a global economy and worldwide outsourcing is part of life. We have two sides to this issue and the Antagonists are unions, Lou Dobbs, Pat Buchanan, protectionists, political opportunists, etc. What is Washington doing about this? 4 Senate bills and 3 house bills have been introduced and states are being more aggressive. One thing we keep hearing is that legislation will force you to tell your customers on the phone in the first 30 seconds that you are calling from (Bangladesh, India, etc). Apparently John Kerry has proposed such legislation as well as the option to be connected to a US citizen. Millions of jobs are destroyed each year in the US due to productivity, technology and other reasons. This is generally offset by job creation. Creative destruction has allowed us to change from farming to other industries in the US. One million plus new jobs are created each year. This is not a new phenomenon. Over one million immigrants come to the US each year looking for economic opportunity. Department of Labor predicts a labor shortage in 2007! Protectionist measures are terrible for GNP. Much of Europe has over 10% unemployment partly because of their protectionist nature. A German law keep non-citizens out of the country by forcing them to leave Germany if they lose their job. We need to move people into higher paying jobs. On the downside, changes do hurt people. People do lose jobs when industrys close and downsize. Our national policy needs to focus on what is good for America, not just a few industries. Outsourcing lowers costs which means lower prices on products and services. As the middle class grows in India and other countries, we need competitive prices to sell our products there. The money saved and made by outsourcing need to be put back into retraining of American workers. We need better training, especially math and science. The US is ranked around 30th in the world in math and science. China is graduating 700k engineers in a year as opposed to 50k in the US. We really dont know how many jobs are being offshored. How do we legislate a problem we cant measure? The government is proposing isolationism which has always been a dismal failure. Self-regulation should deal with offshoring issues, not the government. The DMA is opposed to proactive announcements of country origin on phone calls. They dont oppose a reactive response to a question about where the call is coming from. Honesty must prevail. Other interesting points: The white house is using the term worldwide sourcing to refer to outsourcing. My friends in the PR community tell me they are telling their offshore outsourcing clients to use the term worldsourcing. California has recently passed a bill not allowing companies to outsource beyond the state of California. The state of NJ outsourced jobs to a firm in AZ who outsourced once again to India. State politicians went crazy when they found out. They pulled the jobs back. The law of unintended consequences cam in to play and since the price now went up 30%, they cut the money out of welfare meaning people are now losing out on welfare services.
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May 4, 2004 11:10 AM | 1 Comment | 0 TrackBacks
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    1 Comment

    Walt | May 5, 2004 12:30 PM | Reply


    I hope that this is just another example of U.S. lawmakers & politicians saying one thing to their constituents, but doing the other thing - the right thing in reality.

    Fear and greed (the mothers of motive) will always drive short-term thinking and reactionist type activity, but the U.S. has always (usually) come through in the end with a course of action that is ultimately good for the long-term benefit of it's economy and therefore it's people.

    Let's just hope that it is thus so this time around too, 'cause it sure don't look like it at this point...

    By the way, I've experienced the "power" of globalization in the last decade as I live and work in Canada and I can tell you one thing, you can run, but you can't hide. You can try to resist, try to isolate or insulate yourselves - and you can, but at the risk of your future and the future of your children.

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