A Modest Proposal

Over the last few years, I have had the opportunity to guest lecture, usually at the Master’s level, at various Universities in Upstate New York.  I find the experience very rewarding as I have the opportunity to bring value to the next generation.  But, most importantly, I am always enriching my knowledge in the classroom participation of the students.

There is one thing I have noticed, however (and please keep in mind that this is not a scientific survey).  It would appear that the vast majority of the students in these Master’s level classes are foreigners.  To me, this is neither good or bad, just that it is.

And for years, I have been reading about a various concerns regarding the long-term strength of the United States of America and its ability to continue being the most prosperous country in the world.

With Respect to Being Competitive in Business:

I have read many stories and heard many a commentary about the US losing jobs to countries whose labor costs are considerably less and whose attention to the environment and social issues are somewhat lackluster.  Remember that “giant sucking sound” that we were supposed to hear with the passing of NAFTA?

Well, it’s true.  Many manufacturing jobs moved to Mexico after NAFTA passed.  And then many of those companies in Mexico moved from Mexico to China and other Southeast Asian countries in the never-ending search for lower cost production.  But the vast majority of the jobs that moved were for the skill-sets of the lowest-level, or in industries which were inherently too dirty to be allowed in the any community in the US.

Many other companies were forced to upgrade their infrastructure and technology to maintain a level of competitiveness.  Remember years ago when Billy Joel was singing about “Allentown”, Pennsylvania and how all the steel mills were being shut down?  Well, those steel mills were not forced out of business because of the “dumping” of below-cost steel from other countries.  They perished because they did not invest in their ability to produce, could not compete, and died as rightfully as they should have.

It’s a global economy and it’s not going to get any less global anytime soon.  It does not matter whether one agrees with it and embraces it, or despises it and rails against it.  Like living creatures subject to Darwinism, companies too must adapt or die.

Since we are not going to compete in dirty industries which require unskilled labor, we need to hone our competitiveness elsewhere and by other means.

So, I offer a modest proposal…

With Respect to Grade School Education:

I have read several articles over the past few years regarding the deficiencies of the performance on standardized tests of grade school students in the US as compared to those of other developed (and some developing) countries.  Now, I am not saying that I agree with this assessment, especially since it seems that I have been reading such stories since I was in grade school.  And I am not going to offer comment as to why this may be, as it is certainly beyond my expertise.  But the persistence of such stories appearing should give cause for pause.

Should these stories be true, what is especially of concern is the pervasive and especially exaggerated sub-par performance of students in the sciences and mathematics.  It is these disciplines which drive industry and it is a proficiency in these disciplines which will secure the future.

Since we appear to be lacking in the creation or generation of talent in the Sciences and Mathematics at the rate needed to remain competitive, we have need to formulate and execute a “Plan B”.

So, I offer a modest proposal…

With Respect to Social Security:

It appears that the only real issue that politicians of all parities and varieties seem to be able to agree upon is that Social Security will be bankrupt in the future.  Sure, some say that Social Security will be bankrupt in 10 years, some say 25 years, some say more and some say less.  But almost everyone agrees that it will be bankrupt.

If there is more time to fix the problem, it will be less painful.  If there is less time to fix the problem, it will be more painful.  So, the sooner our “leaders” get to work on it, the better-off everyone will be.

For those who are not really versed on how Social Security works, it’s basically a Ponzi pyramid scheme.  The workers (early investors) who paid into it reap the rewards as they retire.  However, these rewards are really generated by the monies paid in the system by the present-day workforce. 

As the expected age of a person increases over time, the actual population reaping these rewards also increases.  Since the workforce tax base is not growing as quickly (population in the workforce) or as richly (annual salary), the pyramid becomes top-heavy.  Eventually, the amounts being drawn out of the scheme exceeds the amounts feeding the scheme and the scheme starts paying from its reserve funds.  When these reserve funds are also consumed, the result is bankruptcy.

Of course, taxes to pay into the fund can be increased, or the age of retirement can be deferred, or the amount paid to the retirees can be reduced, or a limit on income for eligibility can be established or increased, or combinations of all or these.

Sure, there are many countries in similar straights.  And our situation is not nearly as dire as some of them because at least our population is increasing overall through both immigration and births and it is this increase in the working population which will somewhat delay the inevitable.

Since Social Security is going to go bankrupt, and the fastest and least painful way to solving the problem is to increase the number of people paying into the system and the amount they are paying into the system, we need to increase the number of high-paying jobs.  As unemployment is presently at 4.5% (The Economist, March 17th) which statistically means there is barely unemployment, there is room for additional employees.

So, I offer a modest proposal…

This year, there was a quota of 65,000 H-1B visas.  For those who do not know what an H-1B visa is, it is a special visa to come to the United States to work and is intended for the best and the brightest in the entire world and specifically targeted to individuals whose talents are deemed “important” to the welfare of the United States.  Every year, the application process (petitions) for these visas begins on April 1st.  In 2006, this all quota was exhausted on May 26th.

My modest proposal is to increase this quota to whatever the economy can absorb.  Why should we teach and train people in the one thing that is indisputably our competitive advantage in the global economy, namely our brain-trust and send them back where they can use this knowledge against us?  If the economy can absorb 250,000 (arbitrary number), why not let 250,000 in?  Likewise, if the economy can only absorb 50,000, then that is the number who should be let in.  The policy wonks in Washington DC can predict the health of the economy and even which disciplines are most needed.

Which brings me to Grade School Education…  If the United States is lacking in the generation of talent in the Sciences and Mathematics, whilst that particular problem is being addressed in our education system, the solution can be augmented by targeting foreigners with those skills we are not generating (or those we are not generating to the caliber necessary).

And lastly, the individuals who are granted H-1B status are usually graduates (most with Master’s level degrees) in specialized fields that are in high demand.  These jobs are usually the highest paying.

For illustration, if the average salary for these workers was $100,000 per year, aside from the income taxes produced, they would contribute roughly $15,000 per year to Medicare and Social Security.  At 250,000 new H-1B petitioners granted visas, this amounts to $3,750,000,000… almost four (4) BILLION dollars.  Over ten years at this rate of increase, that would be an extra forty (40) BILLION dollars.  Certainly, this would not cure the ails associated with Social Security, but it is a good-sized dent and will permit time for the system to be fixed without it being as big a shock.

There could be safeguards established to make sure the system does not run-amok.  That security is addressed.  As these jobs would be so highly paid, you can even establish market-rate fees to cover the actual cost of processing and maintaining the status of these individuals.  Maybe even establish something akin of a “Student Loan”.  If the newly admitted fail or otherwise become a burden, send them home.

Prima-facie, and keeping in mind that this is not my field of expertise, this approach seems plausible to solve many existing and pending woes facing the United States.  And, I can’t see any down-side that can’t be addressed in the legislation.

Someone less modest and more knowledgeable than me should give it a look.

Paris is the Founder and Chairman of the XONITEK Group of Companies; an international management consultancy firm specializing in all disciplines related to Operational Excellence, the continuous and deliberate improvement of company performance AND the circumstances of those who work there – to pursue “Operational Excellence by Design” and not by coincidence. 

He is also the Founder of the Operational Excellence Society, with hundreds of members and several Chapters located around the world, as well as the Owner of the Operational Excellence Group on Linked-In, with over 25,000 members.

For more information on Paris, please check his Linked-In Profile at: http://de.linkedin.com/in/josephparis

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