Outsourcing race to the bottom

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We all know that free trade forces our capitalists to outsource and exploit the poorest countries in the world. It leads to a "race to the bottom" in wages, work safety, and environmental standards. Of course, as John Stossel put it, "What we all know isn't necessarily so.

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Across the industry there is a long history of failed contracts, in terms of service delivery for end customers, and financial and reputational losses for service providers. It employs 1. The collective view is that the contracting customer the Public Sector no longer differentiates sufficiently on the quality of the services that the supplier promises to deliver and has the capabilities to deliver.

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Communities are often the poorer when public sector jobs are outsourced by State and Local governments, according to a new report. The report, Race to the Bottom: How Outsourcing Public Services Rewards Corporations and Punishes the Middle Class, says governments need to consider the full cost of outsourcing public sector jobs - including the expense of providing government assistance to a larger number of citizens - when contractors offer lower wages and reduced benefits to their employees. The report's author, Shar Habibi said outsourcing public services could set off a "downward spiral" for communities as public sector jobs with good wages and benefits are replaced with "dead-end" contractor jobs.

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In the Public Interest is a comprehensive research and policy center on privatization and responsible contracting. Click here for Full Report. As state and local governments outsource important public functions to for-profit and other private entities, what happens to the quality of life for the workers who provide these services, and the communities in which they live? A growing body of evidence and industry wage data suggest an alarming trend: outsourcing public services sets off a downward spiral in which reduced worker wages and benefits can hurt the local economy and overall stability of middle and working class communities.

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This will help us to better understand whether new digital practices taking root in Sub-Saharan Africa offer a significant departure from previous opportunities that have been available to people, or whether we are simply seeing new forms of exploitation now made possible by efficient communication technologies. Graham, M. Digital labour and development: impacts of global digital labour platforms and the gig economy on worker livelihoods.

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That should help, but the effort can be sustainable only if it is accompanied by much bigger changes in how the industry does business. Workers die in preventable firesbuilding collapses and other workplace catastrophes in developing countries because factory owners have few incentives and little money to build safe plants. Most American and European brands and retailers use a rotating cast of hundreds of third-world suppliers, instead of establishing long-term relationships with fewer of them.

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So unhelpful, but nevertheless, nice and transparent. I don't mind any of that; I think it hurts them more than it hurts us. What I mind more is a large, unverifiable statement, then some statistics that don't immediately knit into it.

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An excellent new study by In the Public Interest, Race to the Bottom: How Outsourcing Public Services Rewards Corporations and Punishes the Middle Classmakes the important connections between outsourcing public services and public-sector jobs, the shrinking of the American middle class, and the increase in economic inequality in the United States. Throughout much of American history, one of the roles of government has been to increase labor standards, thereby improving our quality of life. Government has often led the way in raising wages, providing important benefits like pensions and health care, and breaking down the barriers to opportunity by adopting anti-discrimination and affirmative action policies. But over the last couple of decades, calls for greater outsourcing in the name of efficiency and cost-savings have resulted in a hollowing out of the opportunities that public-sector work used to provide.

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Using outsourcing to aggressively drive down costs to government is undermining service quality and trust, threatening the commercial and political sustainability of markets for such services, warns a report by contracting expert Gary Sturgess. The tools needed for the procurement of commoditised, easily specified goods and services — paperclips, for example — are not the same as those required for commissioning complex support and human services — yet governments too often treat them as the same, Sturgess argues in Just another paperclip? Rethinking the market for complex public services.

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Now the fate of what is left of the American middle class is at the center of a presidential election and forcing a reexamination of the impact of the global decline of labor rights. Over the past few years, some key American manufacturers have either brought jobs back to the US from Asia and Latin America, or have made important decisions not to relocate them in the first place. The Japan plant is now free to devote more capacity to the booming Asian market. Master Lockin Milwaukee, landed a visit from President Barack Obama in February after its decision to bring jobs back from China.


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