In Britain Conservatives, set on “reducing the size of government” have outsourced almost everything able to be outsourced, even many aspects of military life. A handful of huge private contractors undertake nearly all the tasks that used to be done by lower level government employees, including in healthcare, education, recruitment – the list goes on and on, as does the potential for corruption and incompetence. These contractors seem to be no better as man/woman managers, possibly worse, since their priority is profit. Wages are as low as they can get away with. They do not have a good track record.
The same problem exists in the United States. Trump goes on about manufacturing industry, but he will never re- build the size of manufacturing workforce that existed in the 1950s – the trend is about automation, not human hands and heft.
The people and the jobs Trump should be concentrating on are the people doing outsourced “non- core” jobs, and now employed by sub- contractors and temp agencies. The outsourcing has grown hugely since the 1980s as a way of avoiding unions and workplace regulations, and pegging or reducing costs. It is one of the main drivers of poverty. Over the last 10 years it has been estimated that these contracting and temp agencies have accounted for 94% of employment growth in the American economy, and now account for 24 million jobs. The result has been an effective reduction in income to millions of people. Outsourcing the jobs of janitors, for instance imposes a 7% wage penalty; for security guards this figure is 24%; for temp teachers 14% and those in retail 9.4%. ( partly extracted from an article on March 1st by Eduardo Porter in the New York Times)
The old idea of mutual loyalty of corporation to worker and vice- versa has now disappeared, and the shareholders (and directors) have harvested the savings, while leaving too many people living an uncertain and poorly paid life. In the old days the corporation looked after its workforce. There were holiday entitlements, sick pay, annual review of pay, and pensions. All this is going or gone, including loyalty and interest in the future of the company.
Epicurus might ask the pertinent question,”What is life for? Are so many of us just human machines, to be cast aside when convenient. Or are we human beings who can offer service to a company, loyalty and that little bit extra every day to give thanks for a secure and predictable life?” We have all this, is pursuit of profit at any price, totally wrong.
I’m not very knowledgable on labour laws in the United States, but you seem to imply that they are much more relaxed for outsourced workers than those directly employed by a company. But I know that in the UK, agency workers and other are entitled to the same rights as regular employees. They get the same minimum wage, holidays and sick leave as everyone else.
I’d also add that the government trying to save money isn’t necessarily a bad thing. If private contractors can perform the same service but for a lower cost, shouldn’t the government be trying to save the taxpayers money? Of course it doesn’t always work out that way in practice as you quite rightly point out. But shouldn’t outsourcing be done on a pragmatic basis, with neither the conservative bias in favour of it, nor the social democratic bias against it.
I’m also going to have to take issue with myth that wages are stagnant. As shown by the Federal Reserve Bank of St Louis, wages took a dip during the 2008 recession and its aftermath, but have almost bounced back to their original level. (https://fred.stlouisfed.org/series/MEPAINUSA672N) By historical standards, wages grew pretty quickly towards the latter end of the Obama administration.
I should clarify that I accept your critique of businesses which are motivated by profit alone. They ought to be more responsible, so I would hope the frequency of outsourcing declines. But there isn’t much governments can do to increase the rate of wage growth. Sure, it can increase the minimum wage, cut taxes or hand out in-work benefits. But giving the middle class a genuine pay rise? That’s difficult.