So here’s a new twist.
http://www.virtualemployee.com/ is a site where you can setup a virtual office in India. They claim to be able to pair resources with each customer so that you have you own virtual office staff. Your virtual employees or “VE’s” for short, are project managed by you but reside in India where the cost of living is less, there are lots of well trained people and they work for minimum wage (Depending on the skills you require).
Hummm, I’m all for a global economy, but I am also an advocate of fair trade. I don’t believe that companies should be able to take advantage of off shore resources in order to lower the wages of people in North America where the cost of living is higher. I’m also not sure how the tax system works to make sure that these companies who are outsourcing services pay taxes to make up for the impact on rest of Canada. Canada will not get the income tax from these resources. So what is the fair thing to do? Other countries will no doubt take advantage of these more cost effective resources and produce goods that sell for less in our markets.
The remote resources will have jobs that will help to boost the economy in their country and hopefully raise their standard of living (which will eventually standardize the cost of living globally). If a person can do as good as job as I can and will cost a company less, then part of me says they should have my job. Another part of me says hey wait a second, I pay taxes to support my country and you don’t.
This is a really complicated and serious problem that is tied to the cost and standard of living in the various countries. It is not very likely that we will be able to get governments around the world to agree to a common minimum wage and global unions would no doubt be the end of us all. In many cases the services provided do not have a physical component that would have to be shipped (Thus raising the cost of goods) so how can we be fair to all involved?
This dilemma ties back to a post from a few weeks ago where I explained that the internet has leveled the playing field with respect to knowledge. I also highlighted the importance of a good immigration policy to keep North America in the game. The saving grace that I talked about then was that we have a nicer place to live. Most of the people that we would employee in these remote locations would no doubt prefer to live in a less crowed place and we would be wise to import their skills and work ethic.
North America has become lazy and we are going to pay a hefty price if we don’t wake up and get with the program. Unfortunately sites like “virtualemployee.com” undermine my proposed improvements to our immigration policies and could lead to the eventual collapse of the North American economy. I’m not saying that we don’t deserve what we get, but some of us are playing by the rules and want to see everyone succeed.
As much as I hate to admit it, we may have to use import taxes to slow things down until we can get our act together. The question then becomes “How do you tax the import of services?”
I’m going to have to think on this one…Comments???