Remember Dyson

Dyson invented a new type of vacuum cleaner and everyone thought he was very clever. He had a UK factory employing lots people, I for one was quite happy to buy one of his cleaners. Some years later when the cleaner had seen better days, my wife and I went to the shops to buy a new one. But, he had made 1,000 workers redundant in his UK factory and EXPORTED THEIR JOBS to Eastern Europe paying a fraction of his previous labour costs. Great, you think, the price will reflect this. NOT A CHANCE !! The price of a Dyson stayed up there as expensive as before. So, where did the benefit of this move come from? Some foreigners got jobs in Eastern Europe at local rates of pay. Some (1,000) UK workers got the opportunity to seek out new jobs in the UK. And Mr Dyson? Well, he got to pocket the difference, because if you reduce labour costs it goes straight to the bottom line of the company's accounts !! PROFIT !!

Is there a solution which works for everyone? Yes there is ! You subtract outsourced labour cost from previous labour cost and tax the difference at 100% minus some allowance for product price reduction based on per piece. NOW if you want to benefit the locals in the outsourced country, maybe you will pay them closer to UK rates and REALLY BENEFIT THEM AND THEIR COMMUNITIES ! They always claim that to pay too much creates 'distortion' in the local areas. Right, like some UK company chairmen having salaries of over a million pounds? Was that the kind of distortion you had in mind?

Obama's comments were clearly directed at the bosses of the US companies who are PROFITEERING from outsourcing and at the same time creating misery for the US employees whose' jobs they outsource. It is not an attack on India !!

I think there is a huge difference between SOURCING piece parts from anywhere in the world and having YOUR OWN PRODUCT manufactured somewhere else. If you sell a huge amount of product in India, then by all means open a factory there to SUPPLY INDIA and ONLY INDIA! Profits from that factory being taxed by the Indian Government. Maybe a 'license fee' per piece sold might be paid back to the original company to help cover the R&D which brought it about in the first place. This way of bringing your product to the Indian market cuts down on the use of energy which is otherwise wasted in transit -- adds jobs in India and DOES NOT throw out your original workers.