Unintended consequences

Are years of corporate offshoring linked to our homelessness crisis?

I’ve been fortunate to know a fair number of CEOs. Years ago, they used to brag about how many employees and families their businesses supported. Nowadays, they tend to brag about how many people they’ve eliminated. It’s quite a transition.

Of all the systems mankind has ever devised, capitalism is the one system that created the highest standard of living for the greatest number of people, but it depended on a strong moral character for everyone involved. As our morality declines, the system that enriched so many can enslave us.

One thing I’ve always had difficulty understanding is why intelligent, well-educated and seemingly competent CEOs would move their operations offshore. Admittedly, the proposals look attractive, but with due diligence, especially around the ancillary costs which are never in the proposals, the apparent savings tend to evaporate quickly.

Another big factor is the loss of control.

If it’s difficult controlling an operation nearby, how can anyone think it will be easier controlling it half a world away, especially when it’s owned by somebody else in a vastly different culture?

Like it or not, you’re exporting your technology, often to someone who’s incredibly good at bootlegging or even producing similar products under a different name. Why would anyone want to create or enable a competitor? Once they have your technology, you can’t take it back from them. It’s a permanent, non-redeemable gift.

Another consequence, often hardly considered, is the layoff of good employees who may have rendered decades of service. In many cases, comparable jobs are few and far between.

Our country has an enormous homeless problem, and New Hampshire’s often makes the front pages. Yet no one seems to connect the dots.

Admittedly, drug addiction is a major cause, but it’s far from the only cause. It’s difficult to pay your rent or your mortgage when you’re out of work and unable to find something comparable. Discouragement often leads to despair as people can no longer afford their dwellings. I wonder how much of the drug addiction is a result of such people trying to escape the reality of their desperate situations?

Even if offshoring renders some savings, they’re probably lost in the increased taxes to ameliorate the problems we create or increase. I can’t recall any companies realizing substantial and lasting windfall savings from offshoring. Profit and loss statements have to include all the costs, even the ones not associated with offshoring (increased warranty costs, etc.). Just look at their stock prices over the long term …

I’ve become acquainted with several homeless people and helping them is quite a challenge. There’s a terrible aura associated with homelessness. It’s like they have leprosy or something. Most people think they should be helped, but never in their neighborhoods or in their companies. The agencies are overwhelmed; shelters and soup kitchens are only temporary solutions.

They need good jobs. Many fast-food and retail establishments advertise for help, but they can seldom afford to pay living wages. Rents, groceries and many essentials are going out of sight. Working people are having trouble making ends meet.

Additionally, many employers are having difficulty filling jobs that require higher levels of education and skills. Years ago, there were many unskilled manufacturing jobs, but many of these have been offshored or automated. As we continue to automate, this problem will steadily increase. Where do we think this is going to lead? In many cases, we’re putting our customers out of work.

Sorry, but our governments can’t solve this problem alone. Although no company can afford to keep unnecessary people on the payroll, CEOs need to go back to thinking a goal of their organizations should be to support as many people and families as possible. When automation releases people, can we employ them on a new product line or service? Years ago, that’s how companies grew.

When I ask CEOs and high-level managers what they would do if the money and people were available, they often produce an impressive list. Why not act on some of those before we let the people go?

Instead of trying to manage so we don’t lose, we have to go back to managing to win and grow.

Ronald J. Bourque, a consultant and speaker from Salem, has had engagements throughout the United States, Europe and Asia. He can be reached at 603-898-1871 or RonBourque3@gmail.com.

Categories: Business Advice