Lieberman calls for new outsourcing ideas

IDG News Service - The U.S. government needs to address recent growth in offshore outsourcing with new ideas, including wage-loss insurance paid for by companies that use offshore outsourcing and a bipartisan commission focused on ways the U.S. can remain competitive despite the lower wages that other nations offer, Sen. Joe Lieberman (D-Conn.) said yesterday.
During an event organized by the nonpartisan New America Foundation, Lieberman also called for an overhaul of worker retraining and education programs offered by the U.S. government and said companies should receive tax incentives for research and development and for making products in the U.S.
His remarks were based on a legislative white paper he unveiled yesterday.
Lieberman, the Democratic Party's 2000 vice-presidential candidate, said U.S. politicians should stop blaming others for jobs lost to offshore outsourcing and instead focus on how the U.S. can better compete. "The American economy is failing to adapt to fundamental changes and to growing competition in the global economy," he said. "We are not just losing jobs. We may be losing critical parts of our innovation infrastructure, and with it, our competitive edge in the global marketplace."
Large companies doing most of the offshore outsourcing should pay for wage-loss insurance, Lieberman said. Small companies that don't send jobs offshore shouldn't help pay unemployment insurance for the workers laid off by large corporations, he said.
Lieberman, who made a run for the presidency this year, called offshore outsourcing "the tip of an economic iceberg" that could spell trouble for the U.S. if not addressed. In his white paper, he tried to carve out a compromise between the "do-nothing" politicians who argue that offshore outsourcing is good for the economy and the "do-everything" politicians trying to put up trade barriers. A summary of the white paper is available online.
Under the "do-nothing" approach, high-paying jobs will continue to move overseas, Lieberman said. The average annual salary for a U.S. software programmer is about $64,000, whereas programmers in India, China, Poland and some other countries make under $10,000 a year, he said. Meanwhile, U.S. corporate spending on R&D outside the U.S. rose from $4.6 billion in 1986 to $17.5 billion in 2000. Lieberman called the offshore outsourcing of R&D "stunning."
Lieberman also noted that nearly 45% of bachelor's degrees in China are engineering degrees, while only about 5% of degrees in the U.S. are engineering degrees. The U.S. can't blame China for those statistics, he said. "There's nothing unfair about that," he said.
He called for the creation of incentive grants and scholarships for U.S. students