It's Still a Global Economy...

As part two of my last post regarding the interconnectedness of today's economy (found here), two big side issues come to mind: outsourcing and off-shoring.  It's important to recognize that these are two different strategies, sometimes overlapping, but not necessarily (imagine a Venn Diagram...I do so like those).

Outsourcing has to do with when one company hires another firm to handle some, part, or all of one of it's production facets.  For instance, many colleges outsource food service and housekeeping, hiring an outside entity to handle those operations.  Another company may outsource logistics and transportation.  Or packaging.  Or marketing.  Anything not done in house is, effectively, outsourced.  Often it's just more cost-effective to hire someone else to worry about those things.

Off-shoring is when a company decides it's more cost-effective to produce their products in a different country.  T-shirts might be distributed by an American company, but it's much cheaper to pay workers in Honduras (where the shirt I'm wearing right now was produced even though it's by Fruit of the Loom, an American company).

So which are we more concerned about?  I've heard it here and there that we should move toward a "buy American" market.  That is, we should buy materials made here in the good ol' U.S. of A.  But what about materials made by American companies?  I mean, eventually, doesn't most of that money stay here in the States?  The company's books are U.S. based, so their revenue counts when the IRS comes a'knocking.  But, and ready for a wrench in the works?  What about foreign companies off-shoring to the U.S.?  U.S. workers, saving and spending in the U.S. Isn't that what we're looking for?  But the argument about where the revenue stream heads we just used regarding U.S. products not made in the U.S. is now used against us.  I came across this article in Bloomberg Businessweek which got me thinking about it.  Unbeknownst to me, Anheuser-Busch has been bought out by InBev, a Brazilian/European company.  Since their takeover, they've laid off a couple thousand U.S. workers as the company grows evermore profitable.  Even still, they've taken other brands they own (notably Beck's, as pointed out in the article) and moved production from Germany to the U.S.  That's good, right?

Even now, I still haven't wrapped my head around the global implications of AB InBev or the dozens of other companies that do the same thing...

So what does it mean to "buy American"?

A Globalized Economy

Spoiler alert: it was my hope to write this as a non-partisan, neutral look at a contemporary hot-button issue.  My thoughts on the matter may not resonate with you personally, or even any reader happening across this page whilst enjoying their morning joe.  What follows is simply a hypothetical consideration; one of many sides to a significant and ever-growing issue.  Happy reading.

For the past several years, the U.S. has been spiraling through the “Great Recession”, and, as such, a central issue in both the public and private sectors has been putting American citizens to work.  But let’s consider for a moment just what exactly our economy allows for, specifically regarding off-shoring and outsourcing.

Here we are, 2012, a world that has become steadily interdependent and globalized economy.  We enjoy everyday luxuries impossible to consider a century ago.  Standardized clothing, mass manufactured and shipped from the Caribbean (Honduras, specifically, for my shirt right now) and produce, far out of season in the Midwest, fresh on the shelves from Jamaica and South America.  Toys made in China.  Steel, mined in Brazil, ships to the U.S., where it’s delivered to a tariff-free zone (an area not technically considered the U.S.) where it’s manufactured into usable materials import-free (meaning the good ol’ U.S. of A. makes zero public profit) and shipped to the Netherlands where components are put together into a product.  A U.S. company contracts an Asian company to create computer processors, which, in turn, contracts Chinese mining companies to provide raw materials and Indian firms to write and install software, and the whole shebang is then shipped to a separate company (probably a U.S. company taking advantage of less-expensive labor and more lax import/export laws as it sets up shop in a foreign nation) to put it all together, when other companies come in to market, pack, ship, stock, and sell the item.  Then, if something happens and you need tech support, the phone is answered by someone halfway around the world, working third shift to accommodate the time difference, whose paycheck is still signed by the American company.  Obviously, “bringing jobs back home” is a little simplistic.

Now let’s think what would happen if all this work arrived on our shores: The labor that we in America get all up in arms about when we hear numbers like “$3 a day”, decrying how terrible it is to be paying workers such a paltry sum, suddenly shoots up to American standards, somewhere in the minimum range of $7.50/hour.  (Side note: what we often fail to consider is the purchasing power parity, or PPP, which links changes in the exchange rate between two currencies to changes in the countries price levels.  This adjustment then allows for a more direct comparison of living standards…for instance, in 2007 the GNI per capita in China was $2,360, but the PPP per capita was $5,370, meaning the cost of living was less in China and that the GNI per capita could purchase as much as $5,370 in the U.S.  I’m not saying I’m for or against $3/day, but just that single number alone doesn’t paint an accurate picture).

Anyway, say we have 100 workers at $3 U.S./day, working for one day - $300 in labor.  100 workers at $7.50/hour, working an eight-hour day for one day = $6000.  Now think about that over the course of a year.  Now, if output remains the same, but cost of labor increases, what logically must happen to the cost of the product?  You guessed it.

I would say our next step is figure out what we can do, and what we can do better than anyone else. We can’t very well consider our economy in isolation from the rest of the world; jobs don’t just appear.  We can spout all we want about job creation, but until we find something people will pay for, we can’t very well work it.  We’re in the midst of a global system, what happens in one place inevitably affects what happens elsewhere.

So what’s the point?  We live in an ever-shrinking, ever-flattening world.  No longer is a single country autonomous and independent of the activities, the economies, the products of another nation.  Now, I’m not saying that I necessarily agree or disagree with the current level of out-sourcing and off-shoring, or even that there aren’t some gigs we could do here, simply that “bringing jobs back home” isn’t as easy as that.  

Are we saying what people are hearing?

Language is a funny thing, dear reader.  I say that because more and more I'm becoming aware of the language I use every day, and particularly with groups I facilitate.  What that inevitably means for me is that I find myself thinking about and listening for words and phrases I use without even realizing it - I'm paying attention very much to things I hadn't given much thought to in the not-to-distant past (yes, I've always tried to be conscious of how the words I use come across and their effectiveness to convey my message, but I think this is a step further).

For instance, I commented a while ago that I try to avoid labeling things as "easy" or "hard".  Instead, some things may be "more or less challenging" for a particular person or group.  No one wants to come up short on a something "easy" or "simple".  I often use personal examples - for instance, I find it less challenging for me to memorize random, eclectic facts and trivia items.  On the other hand, math has never come easily to me.  Is one better or worse than the other? 

"You all", "ya'll", or simply "team" has replaced "you guys" in inter-gender groups.  While "guys" is perhaps becoming more gender-neutral, it still has a definite masculinity to it.  Granted, this has often brought ripples of chuckles through groups, as they assume I'm adopting some sort of accent for funsies...of course, it does allow me a chance to explain why I use the term. 

I avoid "nice try" at all costs, instead focusing on what was achieved, rather than what was not.  A "good try" indicates that success wasn't found, after all, Yoda pointed out: "Do, or do not. There is no try."  To "try" is to attempt, to give it your best shot but still come up short.  However, if someone climbs 15 feet up a pole, decides that's it and decides to come down, #1, they've made a very empowered decision to choose their own level of challenge rather than compulsory participation, and #2, for a point of comparison, they were at a height roughly higher than a second story floor - and I think that's worth pointing out.  What they did, not what they could have done.

One last example is the language used to describe guidelines or address issues.  I've seen the success of phrasing these in the positive - "let's be sure to walk", "great job holding the rope"; as opposed to "don't run" or "don't hold anything else".  "Keep looking up" is a big one climbing - after all, if I say "don't think about pink elephants!", what's the first thing you think about?  I thought so.  Phrasing in the positive helps people visualize what they can do rather than what they can't and keeps the mindset of doing.
Now, the question is, what does this have to do with anything outside of facilitating?  Well, fortunately that's a ball in your court - how does language affect your work or life?  And don't forget, how something is said can be just as meaningful as what is said...

Movies and TV shows

I'll admit it: sometimes when I watch "Boy Meets World", Mr. Feeny makes me want to become a teacher.

And Indiana Jones made me want to be a whip-cracking archaeologist.

And I'm alright with it.

Disenchantment

To build off last week's post, I must admit that I find myself more and more disenchanted with our contemporary system.  See, I've been working for the past several years as a team facilitator - I work with groups anywhere from elementary age through adult and corporate, and we work through a sequence of activities directed at any number of outcomes, most revolving around cooperation, communication, trust, and working together.  And, after a few hours or a few days, I bid the group adieu and we go our separate ways, hoping that they picked up at least one or two things to apply back at school, home, or work that may help they resolve differences to continue to move forward.

But at at the same time I know that when they get home, they can flip on the TV and watch our politicians, so polarized by party that any semblance of cooperation or compromise is instantly shut down.  Republicans who vote in favor of Democrat initiatives are shunned and vice versa.  Congressmen and Senators end up losing their seats if they vote "wrong".

No longer does the primary focus seem to be the betterment and growth of America and her people.

It seems the primary focus of votes, campaigns, and activities are instead to prove how right your side is, and that the other side is wrong.  Votes put before Congress are put on hold, a freeze that grips both Houses until either one side concedes or the idea is thrown out entirely.  The important thing is to be a good and true conservative or liberal, not to act in the best interest of your constituents.  Campaign ads this year proved an excellent example, as words such as "liberal" (from a Baldwin attack ad: "More liberal that Pelosi, too liberal for Wisconsin") or "conservative" ("Mark Neumann, conservative way before it was cool") are used as insults as well as compliments.  Pay no attention to their track record, in no small part to a data phenomenon wherein bipartisan committees are only correct if their numbers are something you want to hear.  A candidate this year somehow managed to both agree with the Congressional Budget Office when their numbers lined up with his campaign ideologies, then turn around and dismiss them as partisan when other numbers stopped helping his platform.  The Government Accountability Office shrank form 5,000 to 3,200 after pointing out wasteful spending in Congress.  Their reaction?  Slash the GAO budget.

Some may say "well that's just how it's always been".  And to some point, you're undoubtedly correct.  And even if it's the way it's always been, why would we continue to allow Washington, Madison, and all the others slowly grind to a halt as parties become increasingly important?  Wouldn't we the People want positive change, not partisan decisions taking account party over issue, to decide our direction?  Why not try to change it?

And so it goes.  Compromise becomes the greatest antagonist, spelling career demise for any foolish soul daring to undertake it.  If this is the way American politics are headed and we choose to follow, I believe we deserve what we get.

My Favorite Reality Show

It's that time again!  Every four years, my favorite reality show makes it's way around once again.  I'll admit, it is more of a guilty pleasure as there far-and-away characters, resembling in no way a normal life, argue and bicker back and forth.  I do believe that those are the best shows: those with "regular people"...just the best. I mean, you listen to the talk and just can't help but wonder who they think they're resonating with.  And isn't that perhaps one of the best things about reality TV?  We get to watch these people, these regular joes, televise their exploits, and the irony is that they somehow maintain the idea that they are just like everyone else, while those of us back here on earth watch and shake our heads.  With the exception of those that actually believe some of the things these characters are saying (there's always a few), the rest of us rush home from work, hastily drop our bags and coats, and hunker down in front of the TV to tune in, trying to not miss a single beat.

In the last episode, they characters traveled to Florida to hash out some differences, and what an episode that made for!  Such things as "facts" or "real numbers" somehow don't actually apply.  The back-and-forth "It's true" "No it's not" "It absolutely is", paired with subtle as well as not-so-tongue-in-cheek digs and insults hurled back and forth...  It's like children, going back and forth as the host of the show sits impotently by, like a downtrodden parent who's lost control of their kids.

I mean really.  Where do these people come from?  Where do they get their "facts"? With whom do they believe they're resonating?  And the best part is, I was watching reruns of episodes from 30 some-odd years ago, and their arguments were about the same things!  It's like 'Survivor': every week, every season, we tune in to see who's the backstabber, who's allying with whom, and who's getting voted off.  Every season is like a mild repeat of the very same issues that previously surfaced last season.  All that seems to change (and the same holds true for American Idol, Jersey Shore, and, admittedly, those are the only ones I can name...) is the faces of the competitors.  The only difference is that none of us can possibly imagine watching Jersey Shore intermittently for 30 years.  At some point, people should grow out of it.

One-time contestants, back in 1980, had a great episode wherein contestants went back and forth over jobs, unemployment, military spending, taxes...nice to see how far we've come, eh?  And in this day and age, the audience seems to be more polarized by the mantle their contestants has donned over what they're saying.  There is a "right" and a "wrong", a difference that appears to based more on truth than "fact". Alliances are a sure-fire way to lose ground.  "Compromise" is the latest four-letter word.  Everyone is against outsourcing and off-shoring, and no one (yet everyone) has contributed to both.  Both sides are cutting our access to healthcare, Medicaid, and Medicare, yet both sides are actively protecting them.  Neither side (yet both sides) are raising taxes.  Everyone is somehow both for and against women.  Everyone is both for and against job creation.  See where I'm going with this?

Welcome to the future.  Welcome to numbers and figures that only exist if we want them to.  Where data and facts are hotly debated and even open to interpretation.  There is no such thing as a number anymore.  Here's a list...choose your favorite and laud it as FACT.  Everyone else is WRONG.

Oh, and don't forget to vote today.  I hear it's the most important election of our lives.  But don't worry.  In four years, it will be the most important election once again.