When 100,000 US workers lose their jobs through outsourcing, usually for at least a short to moderate period of time, America misses out on their income tax contributions, their value-added tax contributions through various purchases/services and in a nutshell cities and localities die and people move to jobs wherever they can find them and overcrowd services wherever they land. The balance is that the Chinas or Indias of the world will gain that many more workers and fortify their economies and tax bases accordingly. The argument that we ought to pay USC and LPR more to fill those unwanted jobs is also a nonstarter. Instead employers will shift those jobs to the extent that they can to foreign lands to save on cost and maximize profits (or those jobs will be vacant for long periods of time or simply go undone). In that case, the only winners are those with ownership in those outsourcing companies since in most cases, the production savings are not always passed on to the consumers. On the contrary, outsourcing pushes the producers’ profit margin way beyond the acceptable norms in the US marketplace.
The converse of that is that when people, including undocumented immigrants live and work here, they fortify our economy in that they must live somewhere: tax; they must eat something: tax; they must be clothed: tax; they must be schooled: tax; they must be cared for: tax; they must be transported somewhere: tax; they must use various services: tax and they will make various purchases (including “big ticket” items): tax, etc. When the government perceives taxes, it can then build roads and schools, hospitals and prisons, not to mention fight wars and protect us all. It can create jobs and provide services to the needy and serve the tax payers. It can replenish its social security benefits coffers and continue to pay out the aging or retired workforce and so on and so forth. Cities and localities flourish in turn and more work and tax contributors are created. Let’s not ignore the fact that the US has to compete now and in the future with the likes of the European Union, China and India just to name a few. China and India alone account for over 2.5 Billion people as we speak. Can you now begin to understand the economic (and military) power that these countries will command?
Aime M. Katambwe, Esq. 7/26/2012
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