Expert: Dennis - 12/1/2004

Question
Hi, and thanks for fielding my question:

I am wondering about all the talk lately about job outsourcing and off-shoring to low-cost labor countries and the negative effect it is having on the U.S. economy.  It has been a hot-button issue in the past presidential election.

My question is this:  On the subject of off-shoring and bringing in H1-B replacement workers, what is the conservative viewpoint on these issues?  Personally, I am totally against the H1-B program and support offshoring only on a very limited and carefully controlled basis.  I do consider myself a conservative.  The promotion of shipping jobs overseas seems to me a LIBERAL policy, because it's a "new way" of doing business.  My stance is that our economy was just fine from World War II right up through the 1980s when our high-tech jobs in the United States stayed on this side of the Atlantic.  Off-shoring is a liberal stance because it promotes newer employment ideas over the old standard way of doing business.  Also, the importation of H1-B workers to replace American workers promotes uncontrolled immigration, and in my conservative point-of-view, American citizens have to come first, that we have to stem the tide of runaway immigration until our economy and society can support the exploding population growth.

So what would a true conservative think of all this?

Answer
The government can do nothing about off-shore jobs - NOTHING. It is your company, you do what you want with it.

If you can make more profit sending your plants to another state, country or galaxy, that is your decision. If the government passes legislation that prevents you from doing that, you can close your business (the government can't force you to remain open and operate at a loss), and move to another country. That is why the Heinz company owns and operates 57 plants overseas, because it can.

The reason it was a hot-button during the election is because Kerry pretended that Bush had some control over that tiny portion (7% of all jobs lost last year in the USA)of the job loss market (and therefore, some responsibility).

The truth of the matter is that the free-market system will decide how many and what kinds of jobs (if any) go overseas.

When I was a kid, companies opened up plants in Japan, because labor was so cheap ($2 a day vs. $2 per hour). When the standard of living rose in Japan, and it was no longer economical to send jobs over there, the companies moved to Korea, then Taiwan, now they're in China and India.

China had 1 million manufacturing jobs lost last year because companies were moving their production units to other countries. There is NOTHING a government can do to change this. Even if they changed the tax code to penalize companies for shipping jobs overseas, or rewarded them for keeping the jobs here - the market will eventually decide.

That is the true "conservative" stand - let the market decide.

As for immigration, I just read a book called "A Day Without Mexicans," in which the author postulates that one day without legal and illegal mexican workers would decimate our economy because they are working for less, and doing jobs many Americans don't want to do anymore.

Again, if the market did not need immigrant workers, it would not hire them, and the immigrants would eventually leave for lack of employment. At the moment, the USA needs their labor, and they need the work.

As an aside, illegal workers also help the government and its programs. The illegals have social security and Medicare taxes taken out of their checks, and they never are around to collect, because they have used false SS numbers while they were employed. So even if they somehow become legal and try to collect SS, there is no record of them paying into the system.