The HIRE Act: 25% tax on outsourcing(moreno.senate.gov) |
The HIRE Act: 25% tax on outsourcing(moreno.senate.gov) |
As others have mentioned in this thread, simply look at the unemployment rate and time to find a job for these workers. The labor force exists, companies just don’t want to pay for it or offer flexible work (RTO, which is also used to cram down labor costs). They want the control back.
[1] https://corporate.walmart.com/suppliers/investing-in-america...
Like with the H1-B cap discussions there were murmurs about some time back (Not actually reducing the cap, but instead priority-weighting it by salary instead of difficulty to fill the position, something that'd actually _hurt_ US workers in the positions they can actually compete and be paid well for) this change feels a lot more like a performative money grab than something that will actually change the economics.
Indian headcount is not 25% cheaper for the roles I've seen it used for. It is integer-N cheaper, where N can sometimes be >3-5. Additionally, there simply is not the functional, social, or business infrastructure to spin up a new 10k person business center overnight in the US, meaning that for many use cases even if individual labor is findable, it's not realistic in the same respect.
If anything my fear (and what I've observed thus far) is that businesses will see overseas staffing as critical enough that the cuts will come out of the highest cost center: US employment.
Companies can hire remote domestically, the talent exists in the US. There is no need to spin up hubs for thousands of people to drive to offices to Zoom from. If you want access to the market, you can hire in the market.
To your point of cranking it up, I argue that there simply is not a clearing cost that makes US labor viable for many of these positions in the modern world without effectively rendering that service non-viable or dropping US worker purchasing power by a similar multiplier to the salary gap.
In that respect, last I heard, voters and representatives were _viscerally_ opposed to anything that sounded like "Degrowth" which would be the practical outcome of such a policy. (Not making a personal statement here beyond addressing your theory)
In short, my thesis is that if we really want to fix the offshoring issue, there are fundamentally more significant issues that need to be addressed, and absent fixing those, we're only harming ourselves.
Edit: your parent post substantially changed in between my response and now, so I'll address it as currently stands as well:
I'm not sure where "spirit of the law" comes in vs. being a convenient phrase for whatever is being advocated for. I've seen it used innumerably on this very site to defend pushback against worker protections for the last decade in defense of duty to shareholders, certainly.
There is no law that dictates fiscal decisions without regard for practical outcome; that's just bad policy. We appear to not even expect our executive to follow laws at this moment, so the rest of your statement seems to be even more of a non-sequitur. The business-as-a-conceptual-entity will not "suffer" as it's not a human being as much as we'd like the schadenfreude. While it may take a hit in revenue, it has the ability to act globally, it has the ability to shift costs, individuals do not have nearly as much ability to arbitrage, and often have their hands forced. (Look at how UPS is dramatically raising their fees, and will likely profit substantially despite reduced volume. Who is hurting there, the business or the people?)
I'm also not sure what your statement about zoom is in respect to; these business centers are often self-contained entire LOB or call center vs. working across borders. Just on a basis of population, companies like india can provide services that are not realistic for the US , and we are now taxing ourselves for needing to take advantage of that in a globally competitive environment.
(It feels weird to be arguing this since I'm largely pro-supporting-local-labor-markets, and extremely pro-labor broadly, but frankly this is just counterproductive legislation and not the way to go about it. We need to lean on our comparative advantages, not cut off our hand to spite our face.
To make this even more explicit with an example: I would not have this argument were the legislation targeted at specific tactical sectors where the US currently has a meaningful moat or margin, and were an all-out ban against offshoring within those sectors alongside concrete measures to support onshoring, vs. a tactlessly-broad half-measure.)