Research finds the domestic outsourcing of jobs leads to declining U.S. job quality and lower wages — Kate Bahn

The domestic outsourcing of jobs in the United States is fast becoming a dominant explanation for the destruction of the social contract of work, a historic concept in which norms of fairness and solidarity between firms and their employees played a major role in wage setting and workplace standards for some U.S. workers—though of course many others such as African American workers were consistently more marginalized. The destruction of this social contract, detailed in Brandeis University economist David Weil’s book The Fissured Workplace, describes a labor market structure in which workers are employed at firms with core competencies and then those firms subcontract out all other duties or specific functions in the production process.

Within daily work activities, U.S. workers may directly interact with other workers across a variety of firms with different levels of job quality. One prototypical example is janitorial work, where most office cleaners today are employed by a janitorial services company that is contracted by the building owner where individual office places lease their space. These kinds of fissured employment patterns have led economists and other social science researchers to examine a variety of empirical research questions about what has caused domestic outsourcing, what the impacts have been and for whom, and what the future of the firm will be.

This body of research lays the groundwork for U.S. policymakers to understand the impact of this domestic outsourcing phenomenon and what sort of policy solutions can ensure that economic prosperity is broadly shared as workers and firms alike consider “the future of work” in the United States....

The bottom line is that "the American dream" was based on a significant portion of the population being employed in relatively secure and well-compensated in manufacturing. Foreign outsourcing changed that and the US economy has been in flux ever since. The trend is toward concentration at and near the top, that is, the upper quintile, while the rest of the population available for work either stagnates or sinks. Another trend is domestic outsourcing, which has disrupted the previous concept of a secure job, essentially for life.

These are obvious trends in a liberal economic model ("capitalism") since they reduce costs and increase efficiency. However, they are also having a profound social impact, and therefore a political one as well, as life for many becomes more precarious. 

WCEG — The Equitablog
Research finds the domestic outsourcing of jobs leads to declining U.S. job quality and lower wages
Kate Bahn