Behind the Profit: How the US Government Facilitates Outsourcing Jobs Overseas


With the US presidential election in sight, the outsourcing of American jobs overseas has become one of the hottest campaign issues between President Barack Obama and Republican candidate Mitt Romney. Both are calling on corporate America to bring jobs back to US shores even though the outlook for more jobs to go overseas, including millions of white collar and public sector jobs, is as bleak as ever.

But what is so stunning is how the American government on all levels continues to facilitate job loss to other countries, says one labor expert.

Dr. Karen Bronfenbrenner is director of Labor Education Research at Cornell University’s School of Industrial and Labor Relations, and a leading authority on worker rights and the outsourcing of jobs. In 2004, after becoming suspicious that the Bureau of Labor was underestimating the numbers of jobs heading overseas, she decided to make her own count by using media reports and databases.

Between January and March of that year, the Bureau reported an estimated 4,600 jobs went overseas. But after culling hundreds of local newspapers and other information for plant closings and the like, Bronfenbrenner found that 45,000 jobs were actually outsourced during that same time period.

The Bureau of Labor, says Bronfenbrenner, was only counting the number of Americans who had enrolled in a federal government retraining program. Soon she allied with major labor unions such as the AFL-CIO seeking to convince the federal government to create a regulatory commission to count the entire number of jobs going overseas, make the numbers public, and then measure the impact these job losses have on wages, taxpayer-supported social services, and tax revenue.

“We were ignored completely,” says Bronfenbrenner, adding the timing was particularly bad because George W. Bush was in office.

But even as President Obama champions the middle class and the need to get Americans back to work, his administration – like the one before – refuses to count the number of jobs going overseas.

“There still isn’t a regulatory commission or office counting jobs going overseas,” she says. “There are people in the Obama administration who are genuinely supportive of labor. But the Obama administration is torn, and has been from the beginning. Obama’s economic advisors are definitely free traders, all the way.”

Thus if Obama is re-elected, it’s a safe bet the off-shoring projections of white collar and office jobs made by the US Department of Labor and Forrester Research will come to fruition. Both projected that from 2000 to 2015, 3.3 million white-collar jobs will be lost overseas, let alone the millions of manufacturing jobs that will be off-shored. These white collar jobs include managerial, business, sales, IT, graphic arts and legal jobs.

During her research in 2004, Bronfenbrenner met James Chen, an outsourcing expert who was working for the Texas Department of Economic Development and Tourism.

Bronfenbrenner says don’t be surprised about Chen’s position: both state and local governments have had outsourcing specialists on the pay-roll for years now. Outsourcing experts who not only help private companies navigate their production to China and Mexico, but who are also quietly outsourcing government jobs as well.

Bronfenbrenner says everything from pay roll to data entry is being shifted overseas. According to AFL-CIO, “The outsourcing of state and local government technology contracts is in excess of $20 billion. The state of Washington discovered that 36 out of 41 governmental agencies were contracting work overseas. Not so surprisingly, most states don't even know how many of their agencies are also outsourcing to foreign markets.”

Helping state and local governments from keeping their overseas outsourcing a secret,  says Bronfenbrenner, are companies such as Maximus, Accenture (based in Bermuda), and Mitt Romney’s Bain Capital. She says public sector jobs are essentially handed over to these companies and then off-shored.

“Governments do this because nobody knows what Bain Capital is or what Accenture is. The reason they make Bain or Accenture move the job overseas is because it’s a bad news story, and it doesn’t get reported that Bain moves jobs, because they’re moving them one at a time,” she says. “They give that work to Bain Capital and then lay-off all the people that did that work. What governments say is that they’re privatizing that work because it’s done more efficiently.”

According to the Communications Workers of America union, over 500,000 call center jobs have gone off-shore since 2007. In June, T-Mobile closed seven call centers and shipped 3,300 jobs to the Philippines. This news has made barely a blip in the mainstream media.

But in 2010, someone on Capitol Hill finally took notice after an obscure IT magazine caught the US Agency for International Development (USAID) using taxpayer dollars to teach English in the Philippines to those filling outsourced American jobs.

House of Rep. Tim Bishop (D-NY), one of the few in Congress who are at least attempting to take on some of the greediest aspects of free-trade, convinced USAID to suspend the program.

Since then Bishop has continued to put pressure on American corporations and their sold-out neocon capitalists in Congress by sponsoring several anti-outsourcing bills. The bills have sought to deter outsourcing by closing loopholes that give tax breaks to companies creating jobs overseas and denying government contracts and loans to companies that chose to off-shore jobs.

But all of Bishop’s efforts have stalled. His latest bill, The US Call Center and Consumer Protection Act (HR 3596), which would force foreign call centers to reveal their location to consumers, is stuck in committee.

Even so, Bishop’s anti-outsourcing slant appears legitimate.

“What’s important is that those companies who have relied on the infrastructure of the United States and the education system of the United States in the past, and that most of their customers are here,” says Oliver Longwell, a spokesperson for Bishop. “We have to figure out a better way to do better for workers in the United States. It can’t be all about the bottom line. [And] generally I think it is.”

Publicly, American corporations dare don’t mention that the reason they outsource jobs is for big paydays. Corporations claim they off-shore jobs for efficiency, sustainability, and investment for future innovation – all of which is supposed to spur more job growth in the US.

Bronfenbrenner says there’s only one reason why corporations fire an American and send their job overseas to someone who will work without rights for a slave’s wage.

“The true reason is to make money for themselves and investors,” she says. “And it is a very, very profitable enterprise.”

John Lasker is a freelance journalist from Columbus, Ohio.  

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