I am sure that some of you have missed this report, after all it was only reported on ABC4, the news report that almost no one in Utah watches except for the mothers of the anchors and reporters. It is about the University of Utah contracting medical transcription jobs to overseas firms. This will idle about 200 of my fellow Utahans. My knee-jerk reaction is, no fair. They can not do this. But after sleeping on this, I have calmed down about.
There is really no economic sense to move jobs overseas. The dollar is weak right now and only becoming weaker due to rapid government borrowing at the Federal level. Because of the weak dollar, you have to pay more money for overseas work than you did three or four years ago. It takes more dollars to purchase what ever currency is used in whatever country these jobs are being sent to. There has got to be other reasons and costs for shipping these jobs overseas than just wages. There are other factors making this economically feasible for so many firms. This could include factors like lower overhead due to lower property values and energy costs and lower taxes. Our government is not doing a good job at identifying and dealing with these factors. As such, our jobs are being exported and more people are becoming unemployed. The more that this happens, the weak the economy in the US becomes. There will be fewer and fewer people who will be able to afford the niceties of life. The US economy will spiral into oblivion.
One such factor that is making jobs more expensive is how unemployment insurance is charged. In most states, including Utah, we do not charge money to companies when they lay people off. There is not a deductible when an unemployment insurance claim is filed. This is a big mistake. We should charge companies when they involuntarily separate people without cause. We need to provide an incentive for companies to keep people on board. Since unemployment insurance is just that, insurance, it is perfectly justifiable to charge a deductible for separating an employee without cause. Doing so would allow the state to charge a smaller premium in unemployment insurance. Companies that find ways to keep employees would be rewarded with a smaller premium. Perhaps the state can even provide an unemployment insurance discount to firms that have a history of not laying people off.
Specifically about this issue. This company is the University of Utah Hospital. It is an extension of the University of Utah which is an extension of Utah State Government. It is as if the State of Utah themselves were off-shoring work. It is as if the Governor himself authorized it. This should be a personal embarrassment to Governor Herbert. And it should be a personal embarrassment to every state senator and every member of the Utah House of Representatives whether Republican, Democrat or otherwise. These men and women have the opportunity to fix this problem right now, while the legislature is in session. They can stop the current action by the University Hospital and prevent other state entities from making similar personnel moves. They can make this type of outsourcing against State Policy.
I also find it interesting that this story broke on the Saturday of a Holiday Weekend and is only reported on the #4 news channel in the market. It is as if someone wants to keep this news on the down-low.
As a Republican, I believe in staying out of the way of private business. The state can not and should not stop a private corporation like IHC, Mountain Star or any other private medical company from sending work off-shore, but the State of Utah and the Hospital of the Flagship University of our state should be different. They must lead by example. The fact that the University Hospital off-shores work will make it easier for other firms to justify their similar actions. We can not expect private companies to keep work on our shores if entities of the government send their work off-shore.
The majority of funding received by the University Hospital comes from the state in one form or another. Not only does the hospital receive money from the state for regular operations. It also receives funds from the state in the form of Medicare and Medicaid payments. This money all comes from the tax payers.
This move hurts the state fiscally. They money that the University Hospital saves with this contract will be lost in other areas of state government. The 200 people that are losing their jobs will file unemployment insurance claims. They may become eligible for food stamps, WIC and perhaps other forms of state welfare. They will put off purchases of new clothes and other items that are eligible for sales taxes. They may not be able to pay their bills and could lose their homes to foreclosure. This reduces property values and puts a dent in property tax revenues. If enough firms in the state follow-suit, it could lead to another economic avalanche. This will not only cost the state money in the long run it will also cost the city and county governments in lost revenue.
I ask of my readers the following. First, tell all of your friends about this travesty and second contact both your state senator and your state representative and ask them to put a stop to this. The State of Utah must lead by example and learn to show all enterprises, both public and private, how to keep jobs in the United States. Also, ask your congressman, either congressman Bishop, Matheson or Chaffetz to fund a study to identify the reasons so many firms off-shore labor and to identify and implement counter measures at the Federal and State levels. We must keep Americans working. We must remove the obstacles that keep Americans from working. We must find ways to keep jobs on our shores. Our economic future depends on it.
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