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Posted by
admin on Monday, March 27 @ 19:53:57 EST
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The Hollowing Out of America
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admin on Monday, March 27 @ 19:53:57 EST
: " The Hollowing Out of America
RISMEDIA, March 23, 2006—Outsourcing middle income jobs overseas is devastating for REITs, institutional and individual office and industrial building owners, a leading expert in corporate site selection told a news conference at National Manufacturer’s Week.
A new study revealed three consequences of outsourcing that impact US real estate:
More than $1.2 billion in office rent is lost annually due to jobs shipped abroad
8,500 manufacturing plants, on average, close annually due to outsourcing.
Approximately 54 million square feet of office space—the equivalent of one-third of the Chicago central business district—goes “dark” every year as a result of outsourcing
Offshoring also reduces the tax ratable value of commercial and industrial properties in the US, while resulting indirectly in further job losses from support industries, reports America’s Economy In The 21st Century: Pollina Corporate Top 10 Pro-Business States 2006. "Many of the largest US office markets are struggling, with the exception of those tied to specific industries, like energy, that are doing well," observes Dr. Pollina, the study’s author, and president of Pollina Corporate Real Estate, which is headquartered in Chicago.
"While most major downtown markets have seen lower grade office space converted to residential condominiums, the trend is now toward increasingly better buildings being converted,” Dr. Pollina told reporters at Manufacturing Week 2006. “In Chicago, the prestigious 52-story IBM Building, a celebrated building designed by famed architect Ludwig Mies van der Rohes, may join the growing ranks of office buildings being converted, in part or in whole, to residential use.”
"While the U.S. is losing jobs, as reflected by our office and industrial markets, in less than 15 years, Shanghai has erected enough high-rises to fill Manhattan," noted Dr. Pollina.
“Mirroring this trend in US real estate, Shanghai sold 705 hectares (1,742 acres) of land via public tender, a 52 percent increase over 2004, the Shanghai Daily (Dec. 19, 2005) reported. Most of the land was reserved for commercial use as opposed to 2004, when more than half was for residential use. India’s commercial office markets are growing, especially in the suburbs of Mumbai, Delhi, Bangalore and Chennai. Primarily technology and other companies outsourcing to India are feeding these office markets,” Dr. Pollina said.
The study focuses not only on the ills that make offshoring attractive, but also on solutions to creating an environment where businesses can keep their jobs and plants here and compete, and what ten US state governments have done to create a competitive climate for companies. But the study also warns about the serious societal ramifications caused when good jobs go offshore.
The future of the American middle class “is like the future of a wood house overrun with termites – close to collapse – as well-paying white and blue collar jobs sail offshore and are replaced by McJobs,” warned Dr. Pollina.
“Like a termite-stricken house, the job numbers issued by Washington do not reflect what’s going on inside,” says Dr. Pollina, who paints a bleak assessment of the future of the US middle class, while offering solutions for job retention and development to keep good jobs in America.
“No Labor Bureau numbers track underemployment,” Dr. Pollina explained. “Many outsourcers say that the number of US jobs lost to date represent the tip of the proverbial iceberg – some areas of IT could see a tenfold increase in offshoring, for example.”
“The US is taking a one-eye shut approach to economic development that isn’t worth much more than taking out a hanky and waving goodbye as our middle class jobs sail out of the port of gainful employment,” said Dr. Pollina. He criticized the efforts of the Federal government and most US state and regional governments in job retention and creation. "Government should incentivize and incubate job development and stop penalizing US companies through oppressive taxes and regulations, while providing tax breaks that reward offshoring.
“Keeping US jobs requires a triage approach,” says Dr. Pollina. “Governments must identify which jobs will move offshore no matter what, those that will stay, and jobs that can be saved by providing the right pro-business environment and economic incentives. Anyone who believes that we are only experiencing competition that in time will be overcome by superior US ingenuity is not only arrogant, but foolhardy. They don’t understand the complexities of the international economic system nor do they understand how weak our educational system has become.”
The Pollina Corporate list of the Top Ten Pro-Business States 2006 includes South Carolina, Virginia, South Dakota, North Carolina, Wyoming, Georgia, Florida, Maryland, Alabama and Kansas. Dr. Pollina stated that “While we should hold the Top 10 states up as examples for the nation, too many of the states that ranked in the bottom 25 category have such weak or non-existent programs or are so inept that they are pushing jobs out of their states. The efforts of the worst of these low-ranking states could only be classified as pathetic.”
To learn more or order a copy of the report, visit http://pollina.com/publications/probiz%7E1.htm. "
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