Jobs - here today, gone tomorrow

The recent primary in Michigan raised the question of unemployment at home and good jobs that have been lost overseas. Senator McCain said that some jobs would not return. He talked about retraining. Governor Romney claimed that he would encourage business to generate new jobs. I fear that Senator McCain was the more realistic. The United States is loosing more than blue-collar and industrial jobs. Large engineering companies that serve the oil industry have been moving work to other countries for years. They do not call it “outsourcing”. Instead work is assigned to “value engineering centers”. These “value engineering centers” are usually in countries like India, the Philippines, Turkey or the old Eastern Bloc. These countries all have one thing in common – educated workers who are paid less than the same skill earns the United States, Europe or Japan. So, US companies use them. European companies use them. Even Japanese companies use them.

When engineering outsourcing began, companies only exported easy and routine tasks. Later, simpler design and drafting were relocated. Now, those foreign centers have the skills and experience to engineer large parts of any industrial plant. The US, European and Japanese companies are still in control but they need fewer employees with higher skills and experience. Work is migrating to the management parts of their organizations. At the entry-level, US employees compete directly with young people at those “value engineering centers”. It does not need an economics degree to predict who will cost less and where the work will be done.

What about the future? Managers get their jobs because they have experience and ability. But, if all the junior jobs are outsourced, how will young US employees get the experience and skills they need to become managers? They can’t! The people working in the “value engineering centers” are just as well (maybe better?) educated as us. They are now getting the training and experience that was given to juniors in the US before outsourcing. Their kids, not ours will be the people who will build the future.



At one time this welder might have been working in USA. This photograph was taken in Korea. Skilled white-collar jobs are leaving US today just as this blue-collar job left US shipyards years ago.

Senator McCain’s proposal for more retraining may be a band-aid but it is not a cure. We need to change our business model. If we always demand the lowest cost then work will travel to people prepared to accept a smaller paycheck. It applies to the goods we find in Wal-Mart and it applies to design of major industrial projects. The jobs that once made televisions, toys, clothing, shoes, light bulbs or toasters will never return to the US. Only education and a willingness to pay a little more will keep the jobs we still have. Right now, the US is the market to the world. Maybe there is something to be said for import tariffs if they can stop the specter of our children and grandchildren with no livelihood. Certainly free trade has not brought the average worker the rewards that we expected.