Outsourcing in the United States and Europe

Chapter 6 analyzes how the belief in shareholder primacy justified the outsourcing of millions of jobs this century, primarily to China and, under NAFTA, to Mexico. It details the failed attempts in Congress to regulate outsourcing, partly due to lobbying by business but also as a result of the belief that these kinds of activities should be left to the market. The chapter then compares the situation in the United States with the protection of labor and the limits on outsourcing in some countries in the European Union, particularly in Germany. In the European Union, the Charter of Fundamental Rights creates significant legal rights for workers and unions. Not only do many European countries have additional laws protecting labor, they also have a culture respecting the rights of workers. The chapter explains that the prevalent cultural views in the United States toward labor, unions, and government regulation make it impossible to provide similar legal protections for U.S. workers. Nonetheless, the chapter argues that we should not only learn from the E.U. experience, but should also adopt some of the European protections of labor.