Saturday, September 06, 2008

Jobs Overseas

Jobs are going. They're getting packed up and shipped out and sent to places where the labor costs are cheaper.

While Americans are reminded of this gloomy fact during the presidential campaign season, they might take comfort in knowing that the places that those jobs went to are losing the jobs as well.

Dell makes computers in Ireland because it was cheaper than making them in Texas. A couple of thousand Limerick residents found work because Dell outsourced production. The Irish came cheaper, but they also came educated. If there was one thing the Emerald Isle had, it was schooling.

Recently, Dell announced that they would sell off their factories and outsource production once again. The folks at the Raheen Industrial Estate were making good salaries, but computers weren't selling for good prices, and such a situation couldn't be allowed to remain.

Who has Dell gone to, to peddle their factories? They've gone to Asia, offering the facilities to companies that make computers at low cost. Dell's rivals employ these firms to make their products on the cheap, and Dell has no choice but to follow. A company that operates at a loss year after year is not a company with a long life span.

For the Irish worker, they might have the option of keeping their job but accepting an Asian-level salary of two or three euros per day. In all likelihood, the plant in Limerick will be shuttered and unemployment in Ireland will take a sharp upturn, while thousands of Asian laborers find work where jobs are otherwise scarce.

There is one hope for the folks who put together computers for Dell. They're in Ireland, after all, where corporate tax rates are low. If Dell can be convinced that they're saving more on their taxes than they might save on closing the Limerick plant, salvation could be at hand.

No one running for President of the United States has mentioned lowering corporate taxes to save American jobs. And that's good news for Ireland. The island's economy is built on American firms who ship their profits offshore and An Taoiseach Brian Cowen would be in Washington in record time if anyone suggested eliminating that particular overseas operation.

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