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Sunday, January 06, 2008

The Outsourcing Song

I had a history professor in college who expounded, "Government exists to do what we cannot do as individuals." At the time it sounded good. It sounded true. I no longer accept it.

Now, I am not going to advocate doing away with government. I am steadfast to the biblical exhortation regarding the rule of authority as being from God. Lets continue to work to improve, rebuild, and in some instances, restore its function as intended in the Constitution. I would like to see less government intrusion, myself.

So, I am perplexed when I hear opposing sides on the role of government singing two-part harmony on outsouring: The song calls for government to stop the greed of outsourcing by imposing heavy taxation of corporations. Government should get back those jobs outsourced overseas.

Exactly, what is the magic number which constitutes greed?

It is easy to throw off on business corporations and rail on them about their greed and all manner of evils, but what are you willing to do? I once heard someone define greed as that amount, which those making the accusation, has eluded. That is, for those who do alright or scrimp on 30 thousand a year, 35 would be better, maybe even 45 or 50, but over 50, well, that's just greed. Those who live in the 50 thousand bracket might draw the greed line at 100 thousand.

Generally, individuals, like corporations, do not expend their energy and resources to just get by. Ideally, they both drive for that threshold where the unimaginable comes true for them. When they do manage to attain that they either build up a huge savings account or become employers to those who are quite content with getting by with an amount just this side of greed.

I would venture to say many, though certainly not all, those who want government to solve all the national problems which affect them probably do not believe or excercise the power of their vote.

It occurs to me many of the jobs that go abroad could be re-established in America through independent contractors. Whether low or high tech, apparel or computer making, these represent just two industries that can be replicated in your community by those same layed-off workers. There's nothing wrong with those eager workers. Between them they possess the Knowledge, Skills and Experience to make the apparel, assemble the computers; the same resources which bustled on the manufacturing floor. Both of these can easily be performed in the individual's home, under their schedule, childcare cost free with a work load they determine
for themselves.

The recent China toy scare serves to illustrate my point. There are at-home, cottage industries in the US northeast which suddenly found themselves overwhelmed with orders during the holidays. Like toymakers, there are apparel makers and computer builders who are quite capable of replicating what they do on the production floor in their homes. They include, designers, pattern makers, cutters, seamstresses and computer hardware and software installers, technicians, electrical and software engineers, hobbyists and more.

I once read a CEO's explanation why his company would not be quick to jump on the outsourcing bandwagon. He said, companies incur transportation and tax expenses to ship those goods to America as well as having to deal with cultures that oftentimes do not possess the American work ethic corporations were built on and to which they grew accustomed. As if these factors were not enough, there are inferior infrastructures which simply are not able to handle the demands of a new high energy consumption and maintenance plant in their neighborhood even in tech-coveted locations like Bangalore.

Two lessons would-be apparel and computer independent contractors can take from American corporations: Leverage tax law and create alliances. A corporation, by its very nature leverages tax law to its advantage. Alliances are an old trick in the book corporations resort to even with rival competitors when it is of mutual advantage. Corporations will not go it alone if they can help it and thereby minimize potential losses through an alliance or partnership with another company.

Our federal government recognizes contractors as sole-proprieterships, or businesses, and as such they can leverage tax law even more so when they are LLPs, LLCs or other business entities. Nobody can stop or prevent you from creating your own business and generating your own income. It's far more proactive for your family than crying about corporate greed and outsourcing. The song doesn't have to remain the same, with apologies to the 70s heavy dirigible. It's in your hand to do something about it.

The IE-Network model creates alliances and facilitates dialogue between independent (enterprises) contractors and retailers, whether in the apparel or computer industry, to replicate the production floor manufacturing model in their communities through at-home enterprises. The Independent Enterprise Network model enables members to generate income three different ways; personal, residual and bonus overrides.

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