Out Sourcing America

America was built on the system that it was classless society in which an immigrant, who only has the shirt on his back, can have a comfortable living. This thought process has been called the "American Dream", which is most often seen in the middle class of America (Klepp). Middle class society started in the 19th century and was embraced after World War II when the troops returned home to find America's market full of manufacturing jobs created by the war(Vogel 1-2). Middle class today is defined in the United States Census as three of the five incomes split by the census, individuals making between $26,000 to $150,000 a year (Census Bureau 1-10). This is a broad range of income so the census bureau figured the average income is $60,529. The fact is that $60,529 not exactly accurate since it takes into account the individuals that make millions of dollars a year. To get a better understanding of the middle class you must take out the 20 percent high income and the 20 percent low income to figure out what the middle class actually makes. By doing this calculation, it has shown that the middle class itself is split in two. Half of the families that are considered middle class make under $44,000 a year while the other have make more than $44,000. Individuals have defined the middle class by basing a person's income, land ownership, occupation, and education into calculating if they are middle class. If you looked at the information above, you will see that the middle class in this calculation is also vastly different. Most individuals who are considered to be middle class have gone to college, however, not everyone has finished. The occupations that individuals have in the middle class differ also. Highly educated individuals like engineers, nurses, teachers, and many others are considered middle class, while individuals in manufacturing, certain areas in construction, and areas in retail are also considered middle class. Many people believe that America does not have only three classes, rather they believe that it actually has four classes.

By looking at the information above you are right to believe that America is segmented into four classes, however these individuals have a lot in common. The thing that brings these individuals together is taxes and the decrease of good paying jobs. Although middle class is the largest class in America, they are often found to be the least represented in Washington. Tax breaks are found to benefit the upper class or the lower class. The most recent example of this was the Bush tax cuts which cut taxes to wealthier individuals to help stimulate them into spending the money they saved from the cuts on goods and services that the middle class provided. This cut did not work quite as planned since the individuals of the upper class did not purchase as many products or services as the Bush administration had hoped. Another example of tax breaks that did not benefit the middle class was the estate tax that affects 2 percent of America. This tax helped to put 20 billion dollars a year in taxes to the government. This tax cut was also made to benefit the upper class of America. The thought on this tax was the similar to the Bush tax cuts, in which the individuals that receive the money inherited to them would spend this money and purchase products and services provided by the middle class. These two tax cuts did not work as well as planned by the Bush administration and has helped to increase the deficit of America to 1 trillion dollars a year.

The one item that America was known for by many countries was the fair labor of its employees paying those livable wages and benefits. Americans fought for this right in the 1930's with sit down strikes and protests to demand better working conditions and fair labor contracts in America's manufacturing industry. Currently, America seems to be in the same situation it was in back then in which companies paid individuals unfair wages with no benefits, while upper management was receiving the fruits of the labors by the workers. American jobs are being sent to Third World countries that employ their population of men, women, and children to work in their factories. These laborers are lucky to receive on dollar a day for their hard work if they make their quota for the day. Countries like India, Indonesia, China, Vietnam, Mexico, Thailand, and many other countries encourage companies to outsource their labor force to their countries to create jobs for their people. American companies are looking hard at reducing cost of production in order to distribute cheap products to the U.S. market to increase their profitability. Companies that keep their employees in America have cut the benefits and wages in order to compete with the global market. However upper management like CEOs, CFOs, and key share holders have benefited from the decrease in labor cost. CEOs tend to last only two to three years at a specific company due to stress and the favor of the main share holders of the company. Since a CEOs life expectancy in a company is so short they are often paid substantially more than the average worker. The average CEO makes $17.9 million dollars a year not including stock incentives or other benefits. Compared to the average middle class worker who makes roughly $44,000 a year, a CEO makes more than 400 times that. Many individuals justify the large amount of pay by saying that there are too few qualified individuals to be a CEO and that companies must pay high wages to entice the qualified. Also, take into effect the tax cuts previously stated in which the upper class benefits from these cuts.

Many individuals have blamed free trade as the cause of the problems that are happening in America. Free trade allows countries to distribute their goods to other countries at a reduced cost because the tariffs of these countries would be small or nonexistent. Since the beginning of the United States free trade has existed. The Constitution prohibits states from creating barriers for citizens and businesses. The main push to allow free trade for American Corporations was the formation of NAFTA or North America Free Trade Agreement. NAFTA has created the gradual removal of tariffs and other trade barriers on most goods produced and sold in North America (Vogel 1-3). NAFTA became effective in Canada, Mexico, and the United States on January 1, 1994 (Vogel 1-2). NAFTA forms the world's second largest free-trade zone, bringing together 365 million consumers in Canada, Mexico, and the United States in an open market (Vogel 1-2). The world's first largest-free trade zone is the European Union. The European Union has been a shining example of free trade by surpassing the value of the dollar with the European EURO. The main reason why the European Union has been so successful in the free trade market is that