Bringing Jobs Back to the USA

TL;DR — bring a significant portion of the offshored 70% of all information technology jobs back to the USA and put our citizens back to work.

Okay, for the last 9 years we’ve heard political presidential candidates claim that they would bring manufacturing jobs back to the USA. Candidates won the role based on this promise, and candidates have essentially failed in fulfilling that promise.

There’s a big problem with making these promises, as big corporate are primary donors to political campaigns and have put immense pressure on all Presidents to push back on the promise in order to preserve their profits both for themselves and for their shareholders/investors.

The migration of manufacturing has been going on since the mid/late 80’s when NAFTA was signed by the USA, Canada and Mexico. With positive industrialization in Mexico resulting in rising wages and therefore rising costs for corporations, moving manufacturing to China and then to the nations of the South China Sea where wages are extremely low — the threat of the thinning of profit margins and ultimately the increased costs to consumers has kept Washington from explicitly taking action.

But the onset of COVID and severe restriction of the international supply chain really highlighted the risk associated with moving manufacturing overseas. Additionally, as has been highlighted by both the Russia/Ukraine conflict and the tensions with China over Taiwan, technological Intellectual Property theft as is demonstrated by China’s own advances in telecommunications equipment and AI/ML, as well as uninterrupted supply chain of high tech to Russia for their military industrial complex. In 2022/23 US Congress and President Biden signed the CHIPS act into law, with a strongly financed effort to bring microprocessor manufacturing back to the USA. This law, much like the Inflation Reduction Act and all the money invested take years to show returns — the CHIPS act is only just now starting to influence construction of the new factory facilities which will take a few more years before they start their manufacturing pipelines and hiring significant number of US citizens to work in these plants.

So I actually believe we’re making progress here for blue collar and working class jobs, even if it will take time beyond 2025 before the impacts are felt.

Where I do think the USA and Washington explicitly are failing to see is the offshoring of technology and software jobs.

Since 2000, estimates have been published that some 3 million software development jobs have been moved from being domestically filled to international subsidiaries and staffing firms. Here’s a quote from Forbes published March 1, 2024:

In the fast-paced world of AI, it’s common for businesses today to partner with offshore firms that can provide talented people specializing in advanced data science, AI development and software engineering. The benefits of outsourcing include speed, expertise — and in certain regions — cost efficiency.

Outsourcing isn’t anything new. From my view, I’d estimate that U.S.-based consumer goods companies perform about 30% of software and analytics development onshore and 70% offshore.

So to make this clearer — 30% of all software and information technology jobs are here in the USA, with 70% of the remaining jobs all offshore and not benefitting US citizens even though most of those companies’ money from selling their services and products is earned right here in the USA.

What to do?

We hear the candidates talk about costs and inflation affecting the electorate, which is absolutely true. We hear more about bringing manufacturing jobs back to the USA, which would be great! The Biden administration and Janet Yellen in particular has succeeded in getting an international agreement that would limit foreign tax havens such as Ireland and require them to set corporate tax rates at a minimum 15% to discourage companies from moving offices and reporting earnings abroad. That will work on a limited level, but lets now get candidates to commit to legislation that would be bringing information technology jobs back onshore again.

How do we bring back a greater share of information technology roles to the USA?

If you haven’t noticed, the US has been in a white collar recession since the fall of 2022 with information technology workers being laid off en masse, who account for a goodly percentage of the middle class and now are struggling to find their next roles. For most of those people, bringing back even 1/3rd of the overseas roles would mean those people here would be employed again and contributing to the economy.

How to enforce and police this?

Companies’ own balance sheets and financial reporting gives details of operational and capital expenses across all branches and subsidiaries here in the USA and internationally. Getting headcounts from them for people sitting in each geographical location should be required and enforced, with a “foreign employment” tax assessed against profits proportional to the number of people working internationally. If the tax were sufficiently onerous, and on a sliding scale with a threshold of foreign workers on the payroll or contracted (eg — workers greater than 50% outside the USA results in a 37% tax on profits exempt from any write offs or deductions, 25% for greater than 40%, etc…), it would strongly encourage companies to bring those roles back to the USA and put our people back to work.

We talk a good game about how just being in the USA presents opportunities for success for individuals and corporations, but the people who are successful continually are finding ways to avoid paying back the country and its people for the success they enjoy. This needs to stop NOW.

To #KamalaHarris — if you’re truly serious about making things better for the middle class (and I trust you are), and reducing the effects of inflation on the 99% — you need to put Lina Khan’s group on top of this travesty as soon as you take office. Without a strong middle class that includes the information workers, bringing manufacturing back wont put America back on the top of the world in terms of innovation, productivity and industrialization.

I don’t include the Orange guy since he had all the chances in the world to do this between 2017 and 2021 — and he chose to weaken this sector because most of us live in Blue states and dont vote GOP. So, to quote JD Vance from a different context, he can “go to hell”.