Sending jobs overseas isn’t going to help solve any American financial or employment crises any time soon, the President insinuated in a recent meeting with business leaders. On January 11 he hosted those leaders who have acted on reversing the former trend of outsourcing American manufacturing and hiring by instead bringing jobs, industry back home to our nation. Supporting companies who take part in insourcing, as the President referred to it, tax breaks will be offered for businesses which operate at home instead of abroad, and utilize American workers. Companies that continue to send employment opportunities abroad will see the elimination of tax breaks that at one time supported these actions.
For years it often made logistical sense for companies to relocate operations abroad and to make use of lower rates for labor and the creation of infrastructure. The tide is slowly turning in reverse, and many U.S. operations are finding that the benefits of conducting business overseas no longer outweigh the drawbacks. One major facet of relocating operations was the reduced wages a company would have to pay in China and other countries. Portfolio.com, however, points to rising Chinese labor costs, an occurrence that has drastically altered the perception that it makes financial sense to set up factories on foreign soil. When one considers the shipping rates involved with establishing locations abroad, not to mention the general logistical undertaking of it all, it is understandable as to why many companies are open to plans which would reward them for keeping their business in the U.S.
One advantage of a prolonged period of American unemployment is the rejuvenation of incentive-offering and ultra-competitiveness in this nation’s commercial realm. It makes a difference to attempt to retain U.S. industry for not only competing entities, but for the business world at-large who benefits from having a more astute, successful labor force at the ready. Like New York State’s “Open for Business” campaign of late, encouraging businesses to stay in America makes our local economies so much more vital.
Through a program entitled SelectUSA, the President also seeks to make international companies more interested in investing their business dollars here in America. He has asked for $12 million from Congress to support SelectUSA’s agenda wherein federal officials will work with state and local officials to encourage foreign investment.
The tax breaks to be offered to American organizations which bring operations back to this country will benefit companies like Master Lock, for example, which recently analyzed their figures and came to the realization that unionized labor here in the U.S. could more cost-effectively manufacture their product than non-unionized labor in China. Bringing their manufacturing back to this country put the focus on insourcing talent, and exporting goods instead; now Master Lock is sending its products to Chinese and European commercial markets.
The President encouraged business leaders to examine all that they possibly could to keep operations – and jobs – in America. In support of their attempts to do this, he says, he will do whatever he can to benefit them.
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