Commentary: Outsourcing Duke

   On March 18, Duke University announced plans to outsource nearly 45 union laundry worker jobs to the healthcare laundry giant, Angelica Textile Services. Duke will sell its 61,000 square foot laundry plant to a company that is notorious for its strident anti-union stance, low wages, supervisor harassment of employees and unsafe working conditions.

   I hope that the Duke community gives the University some serious heat over its decision to maximize profits over people, as the mantra goes.

   After all, this is a local issue that affects the entire Duke community, even if we are simply speaking in terms of our desire to proudly attend an institution that values moral integrity in its business dealings.

   Unfortunately, it is of little surprise that the outsourcing of low wage services and manufacturing jobs has not received high-profile national attention.

   While big industrial states like Michigan, Ohio, North Carolina and Iowa are concerned, at the national level, from Reagan through the vociferous free-trader, Bill Clinton, the argument has gone much as Gregory Mankiw, the current head of the President's Council of Economic Advisers, recently put it: "[Outsourcing] is probably a plus for the economy in the long run."

   And most people used to buy the argument. Why? As the neo-liberal, free trader, liberalize--everything economic pundits would have us believe, deregulation, privatization and trade liberalization is never a zero-sum game.

   In the developed world, losses due to inefficiencies in the industrial sector will be outweighed by gains in more advanced technical sectors. As the capacity and demand for these new computer engineers grows, wages will rise, all at the behest and blessing of the market. (Before all you conservatives stop reading, I partially agree with this analysis.... But you'll have to wait a couple paragraphs.)

   The problem is that in the last few years, U.S. firms have not only moved their laundry-cleaning, textile and steel-producing jobs to Mexico and China, they have also begun transporting white-collar, high paying service jobs overseas---the ones that were supposed to replace and exceed the former.

   India, with its 100 plus million and growing highly educated English-speaking technical workers who answer your calls to Dell, can easily compete with equally trained American workers. Yet the average wage gap between the US and India is more than 12:1 for telephone operators and about 9:1 for medical transcribers according to a University of California, Berkeley study.

   Overall, global pay gaps result in cost savings for outsourcers of at least 45-55 percent. Kerry can tout his tough-talk economic plan to reserve tax credits only to U.S. firms that continue to employ domestically, but there is simply no comparison to the cost-savings reaped through outsourcing.

   It is the hemorrhaging of high wage service jobs that explains why outsourcing has taken center stage in the national debate over U.S. economic policy. For the first time, the white-collar insurance capital of the world in Hartford, CT has something in common with the blue-collar textile mill in Gaston County, NC.

   The middle class as a whole is beginning to fear an increasingly volatile domestic job market, in which no job is certain, and each month brings the fear that one's high level banking position in Manhattan will fly to Beijing. The growth in the U.S.'s GDP is of little comfort, since most of it reflects greater corporate profits, not higher employment and wages.

   Therefore, if the moral clarity argument for concerning oneself with the outsourcing of those healthcare laundry-workers' jobs doesn't stoke your conscience, then you have another reason to be concerned: What will that $165,000 Duke education be worth if a) you can't find a job as a financial consultant on Wall Street, or b) you know that you will have to live in perpetual fear of losing your job?

   Granted, I am exaggerating the likely scope of short-term outsourcing of white-collar services jobs. But I do so in an effort to force us to look at the bigger picture: At what point do the losses in domestic employment and human capital outweigh the gains in cheaper consumer goods from China and greater returns for Dell? And further, what can be done to protect our (as Duke students) future jobs and wages, while capturing the benefits of global trade?

   I do not have anything close to a perfect answer. If I did, I'd be running for president. After all, "it's the economy, stupid." But I could suggest a start. The knee-jerk reaction to revert to protectionist economic policies would be far more detrimental to employment, economic growth and productivity than what we have with current policies. If our businesses cannot compete with others for overseas labor and lower-priced imports, then they would simply go out of business.

   What the U.S. should do is follow the model of the EU, which has used targeted aid and common labor and social standards among socioeconomically divergent member states, to create a legitimate free trade area where living standards improve for all.

   We can also give aid and technical resources to poorer countries with the goal of closing the economic divide, which would also make our demands to include labor and environmental standards in trade deals more legitimate.

   Ultimately, we must realize that simply taking advantage of low-wage sweatshop zones can come back and bite us in the forms of economic behemoths like India and China. In the meantime, let's stand up for those laundry workers on our own campus. In the end, we're all rocking the same small boat in a fierce and gigantic sea.

   Jared Fish is a Trinity sophomore. His column appears every other Friday.