Most companies portray themselves as a "member" of the community, boasting of their community spirit on their website and listing their various philanthropic initiatives, hoping that the community sees the company as a positive force. As one of our companies states on their website, they are "proud to support causes that help to strengthen our communities and the lives of the people who live in them."
And yet, many of these same companies continue to outsource -- or threaten to further outsource -- good Union jobs with no thought to the impact such outsourcing has on the greater community. Since the 2004 contract with CUNA Mutual Group, our Union has lost over 600 members at that company alone, with people laid off and jobs moved out of state and overseas.
A study published in 2014 illustrates that outsourcing like that hurts local economies. This study focused on state and local governments but many of the lessons can be extended to the private sector with ease. For example, the
study found that:
While reducing costs is most often the motive for outsourcing, a growing body of research documents that savings are minimal, on average. It is also not unusual for total costs to be greater when performed by private contracting firms than they were in-house.
There are many factors that go into this. For jobs outsourced but kept within the community, the costs are often higher because, while money is saved on worker's wages, the savings gets eaten up by overhead and the need for those private companies to make profit on every transaction. For jobs kept "in house" but transferred to a different site, the hit on business continuity is often high, with customers having to go from highly trained Union personnel to lower-paid and inexperienced workers out of state. For jobs outsourced and offshored, the issues are usually those of productivity.
According to Forbes (generally no friend to Labor):
...the U.S. is still among the most productive economies in the world in terms of dollar output per worker. To be more specific, a worker in the U.S. is associated with 10 to 12 times the output of a Chinese worker. That's not a statement about intrinsic abilities; it merely reflects the superior infrastructure of the United States, with its higher investments in automation, information technology, transportation networks, education, and so on.
All of these moves hurt the community that the company proudly says it supports. Instead of paying workers in the community, that money is going out of state or out of the country. Fewer jobs means fewer people spending money in the community (including buying the company's own products!). The threat of outsourcing is also brought to the bargaining table as leverage to bring down the wages of the Union workers that are left, further diminishing the amount of money spent at businesses within the community.
For those who are laid off, the impact on the greater community may be lower taxes collected even while higher spending by the local government on things like food stamps, unemployment compensation, and other aid to struggling families. Money spent to support un- or under-employed workers may result in less spending on things like infrastructure, making it harder for the company itself to continue doing business in that community.
How ironic that when companies see a worker's salary as only an expense to be managed and minimized instead of an asset to the company and the community, those actions can result in damaging the very community that the company takes such pride in being a part of!