Thread regarding Cigna layoffs

What If We Made Offshoring Cost the Same as Hiring Americans?

I'll start by saying this will never happen, but economically there is no downside to doing what is proposed below, and in fact in the long run, it would make Cigna and a lot of other corporations better.

A company can replace a $150,000 American worker with a $35,000 overseas worker and save $115,000.

Why should the tax code allow that enormous labor-cost arbitrage?

Under a simple 1-to-1 offshoring tax, if a company moves a job overseas, the difference between the comparable U.S. labor cost and the foreign labor cost would be taxed 100% and made completely nondeductible.

$150k American worker
$35k foreign worker
$115k offshoring tax
$150k total offshore cost

The company can still offshore. It just doesn't get to keep the entire savings from replacing American labor.

What would happen?

If 10 million jobs were realistically capable of being performed domestically and 70% returned, rather than the 70% - 30% split towards HIH, and a model becoming more popular among more and more corporations.

7 million jobs could return to America
Roughly $1.05 trillion in annual compensation could shift to American workers
The remaining offshore work could generate roughly $345 billion in federal tax revenue
More income would circulate through American households and businesses
Companies would have greater incentive to invest in American workers, AI, automation and productivity

But isn't this bad for "American competitiveness"?

That's the argument we constantly hear, but competitiveness for whom?

If an American worker costs $150k but produces substantially more useful work than a $35k offshore worker, comparing salaries alone is meaningless.

A worker who takes five times as long to complete a task and requires substantial rework isn't actually cheaper simply because their salary is one-quarter as much.

And making an American company pay American wages doesn't make China more productive. A highly educated, highly productive American workforce can make America more competitive.

What may become less competitive is the company's profit margin and, potentially, shareholder returns.

That's not necessarily the same thing as making America poorer.

A corporation can increase its profits by replacing American workers with cheaper foreign labor without producing a single additional product, invention or unit of economic output. It has simply shifted economic value from American labor to corporate profits.

So what is the actual downside for America?

There is an argument that this could cause certain services to become more expensive, however, there is ample historical evidence that insurance, and other services go up when the consumer base gets smaller, I.e. off-shoring causing unemployment.

Since that argument doesn't actually hold any weight the policy would also mean:

More American jobs.
Higher American wages.
More domestic spending.
More tax revenue.
More incentive to invest in American productivity.
Less dependence on foreign labor.

The government gains revenue. American workers gain employment and income. Corporations may make less profit, potentially, but for Cigna this probably even isn't true because there is a larger consumer base, but they can still be profitable.

So here's the question, is there a downside to doing something like this?

No. It isn't difficult to implement, you can look at a companies tax roll, or employment history to find out how to tax properly. Figuring out who is offshoring isn't difficult. It would mean more American workers, less stress, more money within the country, more information within the country, a better society, but this isn't what they want. They want to maximize profits, a corporation is a soulless enterprise, that has one goal, it is neither good nor evil, and the sooner we realize that and start to treat people like people again, the better off we will all be.


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| 483 views | | 33 replies (last 21 days ago) | Reply
Post ID: @OP+1m1cwfj23

33 replies (most recent on top)

Unfortunately this will never happen because our politicians are in the pockets of billionaires and corporations though lobbying and political donations. We are living in an oligarchy, not a democracy

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Post ID: @r4+1m1cwfj23

@qh Not just one single way. In fact, for any progress, many persons need to try multiple ways at same time. Eventually hopefully something will occur coinciding with these efforts that cause someone or several persons of importance outside these corporations that leads to national media press and lawsuits, etc. that then hopefully leads to stocks to take a nosedive dive for all these health insurance corporations. Which hopefully leads to them being forced or feeling forced to change.

Only stock market matters to these corporations. And only super bad press will cause shareholders to share stock in them.

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Post ID: @qs+1m1cwfj23

@jz how do we speak out? do we just write our representative

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Post ID: @qh+1m1cwfj23

If people are too scared to even speak out on an anonymous forum, then they will be afraid to speak out anywhere or anytime.

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Post ID: @k0+1m1cwfj23

@j5 It won’t happen; they won’t bring the jobs back. Once they’re gone, they’re gone. That is precisely why I have been trying to nudge, even gently push, folks to speak out now! Speaking out now may not save our jobs but at least it will show we are not pushovers and maybe help our children.

But so many out of fear, I guess, want to be silent. Then, later they will have regrets for not speaking out.

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Post ID: @jz+1m1cwfj23

To the person who didn’t even bother to remove the ChatGPT comment before pasting this here. AI may replace some jobs, but it won’t replace people with the right qualifications, experience, and skill sets.
You most likely lack the education and understanding to appreciate just how much more complex healthcare is than the auto industry. If AI and offshore teams have struggled to automate and replace jobs effectively in the auto industry, expecting them to successfully automate complex healthcare work is unrealistic.
Offshore mistakes and false promises have already caused some auto companies to rethink layoffs and bring employees back. I believe healthcare organizations may eventually face the same reality. It’s only a matter of time.

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Post ID: @j5+1m1cwfj23

AI generated predictions. Good news for Americans is India's IT and BPO sectors "could vanish by 2030".

By 2030, the job market won't be destroyed, but it will be fundamentally restructured. We are looking at a net increase in jobs globally, but this masks a turbulent period of massive displacement and creation, driven by the "automation arbitrage" that is replacing the old model of "labor arbitrage".

🌍 The Global Picture: A Net Gain, But a Turbulent Transition

Globally, the World Economic Forum projects a net gain of about 78 million jobs by 2030—with 170 million new roles created and 92 million displaced. This massive shift represents about 22% of all jobs being transformed. The key to this outcome is workforce readiness; without it, we risk the "Age of Displacement" scenario.

🇺🇸 The US Market: Significant Disruption, Not Apocalypse

In the US, the impact will be pronounced but not apocalyptic.

· Job Losses: Forrester predicts 6.1% of US jobs (10.4 million) will be lost to AI and automation by 2030—more than the 8.7 million jobs lost in the Great Recession.
· Work Hours: McKinsey estimates up to 30% of US work hours could be automated, with some projections as high as 57%.
· Economic Value: This automation could unlock ~$2.9 trillion annually in the US.
· Skills Shift: By 2030, 70% of the skills required for most jobs will have changed due to AI.

📉 The Offshoring Revolution: The End of an Era

AI is dismantling the traditional offshoring model. The core value proposition—cheaper human labor—is being replaced by cheaper AI agents.

· The End of BPO?: Visionary investor Vinod Khosla has predicted that India's IT and BPO sectors "could vanish by 2030".
· Market Shock: When a major AI coding assistant was released, Indian IT stocks lost roughly $50 billion in market value in days, signaling a massive shift.
· A New Model: Instead of simple outsourcing, companies are moving towards "capability arbitrage"—seeking locations with deep technical talent and digital infrastructure. Global Capability Centers (GCCs) in India are evolving into high-value hubs, with employment projected to rise from 1.9 million to at least 2.5 million by 2030.

🧑‍💻 What This Means for Workers

The impact will not be uniform. Here is a breakdown of the jobs landscape:

· High-Risk Jobs (Displacement): Roles involving repetitive tasks are most vulnerable—administrative/clerical work, customer service, data entry, and basic accounting.
· High-Growth Jobs (Creation): Surging demand for AI Specialists, Sustainability Specialists, data analysts, and cybersecurity experts.
· The New "Co-Pilot" Reality: Many jobs won't disappear but will be redefined. Workers will become "agent orchestrators," managing AI tools rather than doing the work manually.

The next 5-10 years will be defined by adaptation. While the net job figures are positive, the transition will be rocky. Success will depend on aggressive reskilling, upskilling, and a fundamental shift in how we think about work and education.

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Post ID: @fw+1m1cwfj23

@es Their salaries come from tax payer dollars, genius!

So, yes, comes from me and comes from you!

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Post ID: @et+1m1cwfj23

@eq do the government do anything to regulate the maximum wage for CEOs? We can think it’s fact, but is that your money? If A gives B x amount of money, that’s the deal between them. If government doesn’t do anything, what can we do? If you want, you can lobby government with your suggestions.

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Post ID: @es+1m1cwfj23

@ep Even the President and Federal government believes that CEOs of all of these Health Insurance are woefully being overpaid!

Not an opinion; it is a fact!

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Post ID: @eq+1m1cwfj23

@en we can have our opinions, but no impacts!

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Post ID: @ep+1m1cwfj23

@ek I would say what would be reasonable would be for a CEO for a corporation this size to be paid maybe 5 times that of the average Director’s salary. I think altogether, stock options included, $2 million is fair. But $20 million is absurdly overly paid.

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Post ID: @en+1m1cwfj23

@e6 the problem is the workers/employees have no say on how CEOs should get paid. Shareholders (board of directors) decide how much to pay for CEO. The hierarchy has been in place for hundreds years.

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Post ID: @ek+1m1cwfj23

@e8 Not only are they destroying the company itself long-term, they are immediately destroying their own home country by ki-ling local tax revenues.

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Post ID: @ee+1m1cwfj23

The real question is simple. Are outsourcing decisions actually improving quality and efficiency, or are short-term cost savings creating long-term risks to performance, trust, and reputation?
It is heartbreaking to see highly educated, talented Americans struggling to find work while more jobs move offshore. These are real people and families, some sleeping in their cars or even selling plasma to help put food on the table. Companies have every right to make business decisions, but we should also ask what those decisions are costing American workers and communities.

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Post ID: @e8+1m1cwfj23

@dz this isn’t true. Europe and many other places protect their workers

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Post ID: @e7+1m1cwfj23

@dz We don’t want communism but we do want for American citizens to keep their jobs over non-American citizens. And we want a fair salary/ wage. And we want CEOs and other executives to be paid closer to what should ne reality.

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Post ID: @e6+1m1cwfj23

@dy that’s right. And that’s why the things are so complicated. You can’t stop capital pursuing profits by offshoring jobs unless you want to be communism

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Post ID: @dz+1m1cwfj23

@dx shareholders are the owners of the company. That’s the basic principle of capitalism. Not necessarily the American citizens. These days, shareholders can be anyone who controls the capital. They could be Americans citizens, also could be the tycoons in Asia, Europe, or anywhere.

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Post ID: @dy+1m1cwfj23

Let’s keep it simple. If it is an American company, then ONLY American citizens should be employed PERIOD!

AMERICANS FIRST!!!

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Post ID: @dx+1m1cwfj23

@ay This is all well and good, but please explain why a lot of the incoming "replacements" have to be "trained" by the domestic worker that was laid?

If the non-domestic worker was so good, why would they need training and hand holding? Why do they make so many mistakes that have to be cleaned up by the few remaining domestic workers?

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Post ID: @dg+1m1cwfj23

@OP I think this makes sense. Here's the problem:

"A worker who takes five times as long to complete a task and requires substantial rework isn't actually cheaper simply because their salary is one-quarter as much."

This has to actually translate to a $ amount on the same spreadsheet that the MBAs use to track the expense for the workers.

The problem is, they have a simple model of : "Job Title A in the US earns x", "Job Title A in India earns x*.30" and they see the immediate difference in cost.

Distilling the ACTUAL FULL COST of the offshoring is not tracked and boiled down into MBA language of a column on a spreadsheet with a number.

Once that can be done, the argument can be seen and made. Until that number makes it into the expense sheet, its not going to be seen.

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Post ID: @df+1m1cwfj23

@ay RE: not enough american IT talent

that might be true 10 years ago. but thousands of american IT people have been laid off since recent years due to offshoring and AI so now we have abundance of american IT workers

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Post ID: @dc+1m1cwfj23

@ag tell me you are Indian without me even looking at you.

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Post ID: @cn+1m1cwfj23

@b3 The overall percentages are low…. Otherwise the model wouldn’t work. It does happen though.

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Post ID: @c8+1m1cwfj23

America is like a mighty oak. Its stature is immense, yet its growth is never linear—it experiences seasons of rapid, sunlit expansion and long winters of dormant stagnation. Its resilience is remarkable; it has weathered countless storms, shed its withered leaves, and sprouted anew each generation, promising to revive for centuries to come. But a tree is only as strong as its root system. If the soil grows shallow, or if the roots fail to intertwine and support one another, the grandest trunk will eventually hollow out from within, toppled not by the fiercest gale, but by its own silent decay.

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Post ID: @b6+1m1cwfj23

A VERY frequent occurrence is that both customers and providers get transferred to onshore anyway because the foreigners are too incompetent to understand anything in order to get the help they need and deserve.

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Post ID: @b3+1m1cwfj23

America has a large pool of highly qualified workers who are struggling to find employment, in part because many positions have been moved offshore. When qualified people cannot find stable work despite their skills and experience, the consequences can be severe, including financial hardship and, for some, the loss of stable housing with no healthcare.

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Post ID: @b2+1m1cwfj23

America produces some of the world’s brightest minds. Many of the world’s leading universities are in the United States, and Americans have made enormous contributions to science, technology, medicine, and countless other fields.
So who exactly is saying that Americans can’t add or read? That’s an absurd generalization. Before making accusations about the capabilities of an entire population, I’d suggest educating yourself about the American education system and its achievements.
And if America is supposedly so terrible, why are so many people from around the world eager to work for U.S. companies?

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Post ID: @b1+1m1cwfj23

@OP With you suggestion, offshoring will probably end, but hiring enough Americans will remain a challenge because the high-tech sector lacks a sufficient pool of qualified domestic talent. Companies will have to look elsewhere to fill the gaps. Just look at today’s tech workforce: the balance between native-born citizens and first- or second-generation immigrants illustrates exactly how this country was built and continues to reinvent itself.

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Post ID: @ay+1m1cwfj23

@ag Syria has a higher literacy rate

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Post ID: @am+1m1cwfj23

@ag Probably want to look up India's literacy rate first mate.

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Post ID: @ak+1m1cwfj23

They will still offshore, because foreigner are smarter than Americans. Just look at the American education system where those in high school still can't add or read. American's are not so smart in math and science.

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Post ID: @ag+1m1cwfj23

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