Wednesday, August 18, 2004

How Outsourcing America Affects Puerto Rico

"Layoffs occurred at the second-fastest rate on record during the first three years of the Bush administration, a government report has found. In the government's latest survey of how frequently workers are permanently dismissed from their jobs, the layoff rate reached 8.7 percent of all adult jobholders, or 11.4 million men and women age 20 or older. That is nearly equal to the 9 percent rate for the 1981-1983 period, which included the steepest contraction in the American economy since the Great Depression."
New York Times, Aug. 2, 2004

Amist tales of improvement and talk of getting out of the recession, the American economy continues to suffer. Along with the report released by the Labor Department's Bureau of Labor Statistics earlier this month, research has found that the lay-offs are breaking with the traditional trend of "in good times less lay-offs in bad times more." Lay-offs are occurring in both good and bad times. It's no wonder then that an average of 403,000 Americans filed new unemployment claims every week in 2003.(source: Michael Moore, Stupid White Men) The 2004 summer average of people filing unemployment claims is roughly 340,000 every week.(source: NYT)

I believe the problems are rooted in several factors.

Problem 1: globilization.
Economists like James Glassman, senior United States economist for J. P. Morgan Chase, argue that companies are simply moving their production to other places to take advantage of low-cost centers. This my friends, is called outsourcing. Outsourcing is the nice way of saying having your job taking from you and sending it overseas. Free-trade agreements, like NAFTA, only facilitate outsourcing.

Problem 2: US Companies.
American companies are driven by the greenback. Their main, and only, concern is to maximize profit and minimize costs. Companies are basically laying people off and moving their jobs to countries that have cheap labor-costs like Asia, India and parts of Latin America. They don't care about you or me. They just look for ways to get more money in their pockets. To them, you, the American worker, is expendible. And to add insult to injury, many times companies have, and will, make you train the person who is going to be taking your job in some foreign country.

Probelm 3: George W. Bush.
Here is the man who adds fuel to the fire that is destroying the American economy. Bush entered office with a steady economy that was entering its first, yet light, stages of recession but with a surplus that numbered in the trillions. And what did he do? He helped the "needy companies" out(you know, those who funded his campain). He gave a tax-cut to the rich. He pushed for and got the NAFTA. After 9/11, as the economy was sinking deeper, he spent billions on defense, (Halliburton and Cheney are happy). And then as the economy continued to weaken, what did he do, he gave companies tax breaks. And what did the companies do with all the money they got from Dubya? They moved overseas! I think Bush's failure to improve the economy is hereditary because the last time lay-offs where this high was in the 1990-1991 recession, the year his daddy was president.

It has also been reported that Americans are finding jobs quickly after being layed-off but, according to the Labor Dept. report, 56.9 percent of those who said they were re-employed also said they were earning less in their new jobs than in the jobs they had lost.

These three problems stated above only facilitate outsourcing. But who do Americans turn to for help? State governments? Yea right. According to a report by CNN's Lou Dobbs, "at least 40 states have contracts with companies that use overseas workers rather than Americans to staff state call centers." Even state governments have jumped on the outsourcing bandwagon. It seems that Americans can only hope Bush or Kerry will pull them out, most likely Kerry.

So how does all this affect Puerto Rico? Simple: Everything that happens in the US, happens in Puerto Rico. US companies compose roughly 85% of the Puerto Rican economy. Thousands of US company jobs on the island have been lost, and hundreds of US factories closed, and moved overseas, most of the time to neighboring Dominican Republic.

Yesterday, the government released a report stating that unemployment was down to 10%, the lowest its been in decades. That's great. But then again we've learned once to many times that statistics in Puerto Rico should be taken with skepticism. (Remember, in the US Census 2000, we said that over 80% of us are white. Blah!)

What can Puerto Ricans do to improve their economy? Well, not much. It's not like we can vote for president. We can't even voice our opinions or concerns when free-trade agreements are being worked out in Congress. Our economy is controlled by the Americans. In the condition we are, we can only ask politely and play the colonialism card every now and then to secure even a thought in Congress' mind. That's the cold reality of colonialism.

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