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Ultimately the crux of the problem resides within all levels of government. I personally think the decision to implement widespread free-trade in search of new markets, rather than establish a sustainable economic system has led to the outsourcing phenomenon.
America isn't the only nation that is having their manufacturing and high skilled labour fields gutted through outsourcing. Most of the northern economies (Canada, Germany, Great Britain, etc) are experiencing similar situations.
To solve this dilemma, all nations must abandon the view that nations must compete for business (Competition State). Competition among states to attract investment and business doesn't result in high wages and stable business that people can depend on. But rather, it exacerbates the recent trend of part-time, temporary, low wage jobs that have emerged within the last 10 years and results in a global wage race to the bottom.
It's obvious that there isn’t one solution that can be implemented worldwide to solve this problem, but there are several propositions that have the potential to combat this trend. Firstly, northern nations must allow for strong unions that have the political capacity to effectively challenge business interests with respect to labour laws. Lawmakers must support these unions by halting the legislative attack upon organized labour by implementing stiff penalties against companies who engage in deliberate union busting and intimidation tactics. In southern nations, unconditional grants must be made available to those nations who cannot attract Foreign Direct Investment (FDI). Such funds will allow those nations to invest in national infrastructure to attract legitimate and sustainable business, while simultaneously provide effective social programs to support and educate the unemployed population. By providing stable social welfare programs and accessible education to the unemployed, the tide of unemployed migrant workers will be reduced as indigenous businesses are established that capitalize upon the social and intellectual capital native to a country. One solution to provide such funds would be through the implementation of the Tobin Tax (a minute tax upon international monetary exchanges) which would obtain some of the much needed funds to implement the programs that are required to aid developing nations.
Disclaimer: Before you go criticizing my reply, keep in mind that this was written up very quickly and as such, there may exist a number of difficulties or contradictions within the preceeding passages.
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