Obama vs Romney: Neither is Responsible For Outsourcing US Jobs


For the past few months we’ve seen a non-stop deluge of attack ads from the Obama campaign machine associating Bain Capital with pretty much everything bad that's every happened in America. Lately, the campaign has specifically attacked Romney on issues of outsourcing. But more recently Obama himself has been coming under the same kind of attacks he has been lobbing at Romney, with critics from both the right and even the left claiming that he hasn’t lived up to his promises of bringing jobs back to American shores.

During his first campaign in 2008 and throughout the past four years as president, Obama has consistently spoken of the need to bring outsourced jobs back to American shores, a strategy coined “insourcing.” His proposals have included a range of solutions from offering incentives and tax breaks to companies who keep their production in the U.S, reforming laws that allow U.S. corporations to avoid paying taxes for a time on income they generate overseas, and revamping H1-B visas. But any way you look at it, the trend of low-wage U.S. jobs being shipped overseas has still continued during the Obama presidency. 

Is the administration to blame, or do the problems lie with businesses like Bain Capital and the companies they funded and worked with? Or maybe some blame lies with Congress – as some administration members claim – which has failed to take up a tax code restructuring strategy Obama proposed in his State of the Union earlier this year. Like so many issues in the political world today, criticisms on both sides are simplifying a complex issue into sound bites that don’t do justice to the complexity and myriad factors that contribute to the outsourcing of American jobs and increasing globalization of business.

As a business, funding companies that outsourced jobs does not mean that Bain is responsible for the demise of the American production worker and the overall problems of outsourcing. I would hardly expect Bain to not operate within the structure and reality of modern business, and it is not a private equity firm’s responsibility to stop outsourcing.

However, there is no doubt that outsourcing is a reality that has real implications for individual lives and families both in the United States and abroad. But what it comes down to is not whether  we can stop or reverse outsourcing, or who is responsible; we can't, and we all are. As I wrote about earlier, our consumer habits, our rush to attain the lowest possible price is undoubtedly a major factor in pushing business abroad. The Obama administration can certainly implement tax incentives and restrictions and H1-B visa programs in order to tackle the problem, and it could bring a few jobs back here and there; it will not, however, change the course of an ever-expanding global market. 

Moreover, Matt Yglesias stops to ask: do the administration, Congress, or Romney actually want to stop outsourcing? Or do they feel the benefits of unrestricted trade and offshoring outweigh the costs? And as Americans, are the lower prices we receive as consumers worth the lost production manufacturing jobs in Pittsburgh and Detroit? Outsourcing is nothing more than the free (and global) market at work. If anyone expects and blames either the administration or Romney for this reality, they are missing a huge part of the equation.

I’m not necessarily saying that the positives of outsourcing are greater here. But either way, outsourcing blame cannot be pinned on Bain Capital or the Obama Administration. And I don’t think it is a problem if our leaders see the positives in outsourcing, as they should be looking at the larger picture from time to time. Neither a second Obama term nor a Romney term is likely to make a lot of headway on "insourcing," and I don't think we can expect that. However, what we can and should demand from our president is a recognition and respect for the workers that are adversely affected by the process along with a commitment and dedication of resources to making further job training and opportunities available that allows these workers to enter into the U.S.’s changing role in a global market.