Quality of Life & Corporate Responsibility


Life keeps getting tougher for folks to survive.  While politicians and media pundits seize the opportunity of each life-changing event, families seek to make the best of a struggling economy.  According to the latest government job report this month, just 74,000 more people were employed in December versus 205,000 expected by USA Today’s survey of 37 economists.[1] 

Life will become tougher for job seekers as globalization sweeps down on country after country.  For some countries, they will become industry leaders while others will fade into the night of obscurity.  Many Americans are retreating from the workforce, causing the unemployment rate to fall to 6.7% in December. 

In fact, only 62.8% of the adult population is participating in the labor market now; participation rates relate to those individuals who have employment or those actively seeking employment.[2]  Heidi Shierholz, an Economic Policy Institute economist, explains: “We’re going to have a long-term unemployment crisis for a long time.” 

This current low participation in the job market matches the lowest level since 1978.  According to USA Today business reporter John Waggoner, the economy could be puzzling to the average American: “…corporations have plenty of cash in their coffers to expand and meet future demand.  But the job numbers don’t reflect that yet.”[3]  

Companies taunt their corporate responsibility to the community with such public relationship activities as sponsoring local events.  Yet, more workers wish these companies would renew their social contracts with American employees to ensure them of a decent wage.


Consequently, some workers often become victim of their company’s good fortune.  Thomas Friedman, author of The World is Flat, explains, “The best companies outsource to win, not to shrink.  They outsource to innovate faster and more cheaply in order to grow larger, gain market share, and hire more and different specialists—not to save money by firing more people.”   

The world’s poor stands at more than 1.1 billion people, mostly rural Africans, Indians, and other South Asians.  In fact, the poorest fifth of the world’s people earn just 2% of the world’s income.[4]  With companies moving into emerging markets, they can raise the standard of living for millions.   

Today world’s middle class earns an average of $700 to $7,500 per family member according to the United Nations’ Millennium Development Report.  Many companies would argue that their global reach has improved the quality of life for millions around the world and this is a small price to pay for the loss of a few jobs domestically.  

Discuss if American businesses must deal with the search for cheaper labor and the consequences on the quality of life for millions of individuals locally.                                                                              

© 2014 by Daryl D. Green

[1] “Weak jobs report is not all bad for investors” by John Waggoner

[2] 2013 ends with weakest job growth in years by Annalyn Kurtz

[3]“Weak jobs report is not all bad for investors” by John Waggoner

[4]How Much Is Enough by Alan Durning

32 thoughts on “Quality of Life & Corporate Responsibility

  1. Life is tough and unfortunately it’s just as tough for US military service members. Every time you turn around the government is cutting the budget used by all the services. I have seen this in action as well. Many don’t understand this but the military is a business and the Air Force has been outsourcing to civilian companies for years. Congress figured this was a great way to save money. This allowed the government to stop paying monthly wages and when the employee gets to retirement age the government no longer has to pay for their retirement. It is the responsibility of the contractor that was hired due to out sourcing. In theory, it’s a great idea however, Liebelson (2012) stated, “defense service contracts cost taxpayers more than $200 billion. That’s nearly $50 billion more than the cost of active duty, reserve, and National Guard personnel combined”. In layman jargon, if we stop outsourcing and enlist more individuals into the military it would ultimately be cheaper in the long run. The tens of thousands of positions that were eliminated could be put back on the books and employ some well-educated service members to help protect this nation.

    Liebelson, D. (2012). The problem with outsourcing the military. Retrieved from http://theweek.com/article/index/224161/the-problem-with-outsourcing-the-military

    • Paul,

      Good example! You opened up another driving force for decision making….politics. Government officials often make decisions that are not logical but make good politics.


      Do government officials have the responsibility to look beyond petty politics even if it causes them to lose their own political positions and power?

      Professor Green

      • Professor Green,

        Yes they do owe it to the American people to take the responsibility to look beyond petty politics even if it means their job. The American people put them in the position they are in to do what is best for the people as a whole not themselves. unfortunately the politics of today have become so petty that to even dream of them going back to for the people would be just that, a dream.


    • Paul,
      Having been in the military, I’m very familiar with your analysis. I often heard complaints from my Marines that they had several issues when trying to accomplish a task that required the services of outsourced civilians in our administrative positions. As you indicated, it does just the opposite. Our government decided that it would be best to outsource to our local civilians. “In general, most forms of outsourcing draw upon local providers or markets. This is essentially because outsourcing firms have strong local preferences in order to enhance communication and simplify logistics management” (Jones, 2005, p. 95). It creates a gap in the accountability for their actions. When problems arose a Marine couldn’t go to their superiors for assistance. They had to report back to the source of their administrative problems and deal with civilians who oftentimes do not understand the life of an active duty military member. As you are probably well are, some of these upper GS level civilians had enough clout to pull rank on our service members.

      Jones, M. T. (2005). The transnational corporation, corporate social responsibility and the ‘outsourcing’ debate. Journal Of American Academy Of Business, Cambridge, 6(2), 91-97.

  2. I see globalization as a double edged sword. It has brought us together as a truly networked world. Communication, access to information, and trade have never been easier. One major impact is that globalization is working to flatten the divide between nations.

    What I mean by that is that companies are looking for ways to compete, which leads them to look to find the best talent at the lowest cost, regardless of function and location. This in turn means that for previously high wage countries, wages will begin to decline for many professions. Inversely, as lower wage countries begin to become more in demand, their wages will begin to increase (Bigsten, Durevall, & Munshi, 2012).

    For companies with the resources to do so, they will likely continue to try and find the competitive balance that works best for them, regardless of consequence to locals. This leaves smaller/localized businesses to fill the gap and provide opportunities that may not be available at larger companies. I believe this is why we see the continued growth of the local service industry in America, particularly in healthcare, which cannot be outsourced in many cases.

    Bigsten, A., Durevall, D., & Munshi, F. (2012). Offshoring and occupational wages: some empirical evidence. Journal Of International Trade & Economic Development, 21(2), 253-269. doi:10.1080/09638191003615612

    • Greg,

      Interesting opening! You hit one key area about globalization that really touches a moral issues for managers. Do they continue a quest for cheaper labor for the business at the expense of their own personal issues (i.e. better quality of life for their communities, making decisions that hurt their own workforce locally)?

      Professor Green

      • I certainly don’t mean to imply all managers are unsympathetic to the concerns of their workers and the local community, but the company tends to impose its will over their decisions in many cases I’ve seen. This is especially true in public companies where managers must answer to the shareholders. I feel most companies will do whatever it takes to maintain, or improve, whatever competitive advantage they can. If this hurts the local community in which they are based, that is just a side effect of doing business in our current globalized state.

        On the other hand, the workforces in these impacted communities have to find a way to make themselves more attractive to employers. They can accept lower wages, they can move to find new opportunities, or they can work to improve their education and skills. I found a study by Hickman and Olney that shows an increased enrollment in higher education institutions increased in areas affected by offshoring and immigration (2011). This seems to show that many workers are looking to find ways to rise above the situations they have been put in by the effects of globalization.

        Hickman, D. C., & Olney, W. W. (2011). Globalization and investment in human capital. Industrial & Labor Relations Review, 64(4), 654-672.

  3. I work in the technology services field where offshore contracting has become a popular tactic to obtain cheap labor for functions such as development and first tier support. It is interesting to monitor this trend and how companies deal with the communication and quality issues this trend has introduced.

    The American business has to consider if the offshoring of technology, white-collar jobs, results in a financial savings for their stockholders. Another factor is the decline on the average white-collar hourly wage for Americans by 18% from 1973 to 2005 (Wood & Maniam, 2009). American Businesses must strike a careful balance that provides a strong wage at home while also participating in the world economy at a level that produces growth.

    Wood, M., & Maniam, B. (2009). OUTSOURCING AND THE US ECONOMY: HOW CONSUMERS AND THE ECONOMY BEING AFFECTED?. International Journal Of Business Research, 9(4), 152-156.

    • I agree with you 100%. I wish America could keep everything within our own borders but the issue of isolationism and the repercussions of it economically could be devastating to our own economy. Stokes (2014) stated, “ A Pew Research Center survey found that a majority of the public said free trade agreements lead to job losses. And a plurality said that free trade deals lower wages. Nevertheless, majorities wanted to increase trade with both Europe and Japan”. The balance of ensuring American employees get what is due them and ensure economies around the world we “manipulate” is a fine line and will forever be part of the process to continue our own economic growth. Good or bad it’s here to stay. Abstaining from interacting economically with other countries I believe is a non-issue because it’s going to happen and that just how it is.

      Stokes, B. (2014). U.S. isolationism isn’t protectionism. Retrieved from http://globalpublicsquare.blogs.cnn.com/2014/01/14/u-s-isolationism-isnt-protectionism/

    • I work in the medical field and outsourcing is used more than I thought to “save” money for the hospital.

      The Housekeeping Department which was employed by the hospital is now outsourced through another company. Because the hospital no longer employees these employees several issues have come to arise that were not expected. They all had to take $1.50 an hour cut in pay, all their benefits were taken away and they were offered COBRA coverage and they were responsible for paying for their own uniforms. This in turn caused several problems: Sluggish response times coupled with slow issue resolutions, problems related to quality and turnaround time and loss of control over the company’s business processes because the new company had their own rules and guidelines.

      According to Flatworld Solutions, outsourcing is often undertaken to provide enterprises a competitive advantage by delegating business process to external agencies and realizing the benefits of low labor, better quality and improved innovation. While this provides a good picture of the fair side of the coin, most managers however need to grope with the possible shortcoming of the process and the corresponding impact on the company’s core processes.

      Pros and cons of outsourcing. (2014, January). In Flatworld Solutions: Expanding possibilities. Retrieved January 25, 2014, from http://flatworldsolutions.com

    • In my opinion the Affordable Healthcare Act increases the opportunity to use local labor through contract labor agreements or statement of work agreements with contract agencies, while the laborer will have insurance available at the marketplace. It doesn’t take much thought to draw logical conclusions that companies will hire fewer full time employees as a result.

      Changes in employer healthcare requirements will likely lead to new regulations in contract labor requirements.

    • While I do feel that part time, occasional and contract workers will become more prevalent in businesses in the future, I don’t believe that it is only the because of increased health care costs. Companies need to become leaner and utilize the workforce as efficiently as possible in order to minimize costs. According to Valletta and Bengali (2013), the prevalence of part time work due to economic reasons is extremely cyclical in nature. The need/use of this type of work increases in periods of recession and falls during economic recovery. A variable workforce allows managers the ability to use only the labor hours they absolutely require, and not have employees “on the clock” just because they need to meet their full time hour requirement. Furthermore, the elimination of overtime hours can have a significant impact on the bottom line. This employment strategy is unrelated to health care benefits, but more directed towards a highly productive workforce. There is much work and effort needed to move towards a leaner workplace, and it takes time. It requires careful review and analysis of processes and identification of opportunities where repetition of work can be eliminated.

      Valletta, R. & Bengali, L. (2013). What’s behind the increase in part-time work? FRBSF Economic Letter, 2013(24), 1-5.

  4. You can call it several names; runaway plants, offshoring, global sourcing, or outsourcing. American businesses love to look out of country for cheaper labor. This practice has been around for a long time and is only getting worse. According to (Wessel 2011) companies cut their work forces in the U.S. by 2.9 million during the 2000’s while increasing employment overseas by 2.4 million. I don’t care what you say. Outsourcing is not helping us to come out of this recession. The lower class is falling deeper into poverty because there are fewer jobs available for unskilled workers. They are not alone; today there are plenty of middle class as well as upper class jobs being outsourced. If you believe this problem is fun now, wait for Obamacare to really kick in. Are companies going to pay for the insurance of their employees? No they will not. They will bypass this expense by either outsourcing or by hiring temporary employees who work under 30 hours a week. Either way will not help the American people. Maybe a solution would be to go to another country and find cheaper labor to replace all of our lovely politicians.

    Wessel, D. (2011). Big U.S. Firms Shift Hiring Abroad. Retreived from: http://online.wsj.com/news/articles/SB1000142405274870482170457627 0783611823972

  5. In today’s competitive economy, I feel that it is almost necessary for companies to deal with looking for cheaper labor outside of the U.S. This applies to small companies as well as large ones. In the article Small Companies Going Global, Louise Uchitelle states, “The globalization of small business underscores corporate America’s belief that in the future most companies, even small ones, must compete internationally to be successful” (1989). Judging by the date of this article we know that this is not a new issue, but an issue that is more relevant than ever before. Small businesses have given many Americans stable jobs, but with this new trend of outsourcing the consequences could be great.

    Uchitelle, L. (1989). Small companies going global. The New York Times. Retrieved from http://www.nytimes.com

    • Amanda,

      You stated, “Judging by the date of this article we know that this is not a new issue, but an issue that is more relevant than ever before.”

      I agree. Outsourcing has been an ongoing issue for years. There will always be someone, somewhere unsatisfied with the rate jobs are leaving the U.S. The real question with this matter is what can we, as rising scholars and business leader, do to make a change? Are there suggestions or ideas of our own that we can incorporate in our own workplace that can help eliminate the potential of outsourcing? A few months back I was given the task of writing a proposal to outsource my job! Imagine that, being told to give your job away. It actually wasn’t that bad, “People tend to count the losses, but they don’t count the gains (Hargreaves,2012). Staying positive with my outsourcing proposal I simply outlined why we should outsource my position and the benefits of doing so but I also included reasons as to how they could better use my talents.

      Hargreaves, S. (2012). The case for outsourcing jobs. Retrieved from http://money.cnn.com/2012/09/14/news/economy/outsourcing-jobs/

  6. Companies often times have many legitimate reasons to want to move off shore but what it all seems to filter back to is the opportunity to make more money. That brings up the ethical question if it is wright to take jobs away from the American labor men and women to gain more capital. Business no matter what they claim go in to business for one reason to make money, sure there are plenty of things like they want to better the lives of others and help people but the end result is to make money off of their products and services. Many times companies in the us can afford to pay the workers its just that by having them here they are actually taxed more than if they were to move the jobs offshore. “More big U.S. companies are reincorporating abroad despite a 2004 federal law that sought to curb the practice. One big reason: Taxes.” says (McKinnon, Thurm). Many times the people that a company services is overseas. its not the companies fault that is where the market is located so to save on taxes they can move the manufacturing closer to the target market.


    John D. McKinnon And Scott Thurm (2012). U.S. Firms Move Abroad to Cut Taxes. Retrieved from:http://online.wsj.com/news/articles/SB10000872396390444230504577615232602107536

  7. The current global economy is being shaped by machines. As technology develops, some middle class jobs are going to continue disappearing. Andrew McAfee, a principle research scientist at the Massachusetts Institute of Technology believes “the jobs that are going away are not coming back”. McAfee offers up four forces that are driving the changing middle-class landscape. First, businesses are renting IT equipment and services rather than hiring full-time IT staff. Second, robots are becoming more advanced. As a result these robots are replacing some middle-class jobs at an increasing rate. Third, devices that allow workers to work anywhere at any time have proliferated. As a result, fewer employees need to be hired in order to get the job done. Finally, computers are increasingly able to analyze greater amounts of data. The ultimate function of all of these forces is to increase the efficiency and effectiveness of employees in such a way that not as many employees are needed to run the company. So long as technology continues to develop, the middle class will need innovate or watch themselves slip into the lower class.

    THE ‘HOLLOWING OUT’ OF THE MIDDLE CLASS. (2013). E-Scan Newsletter, 39(3), 2-3.

  8. Headley (2009) mentions in his article that the lower to lower middle class worker has seen jobs decrease as illegal immigrants and foreign workers in general work for cheap labor wages. The biggest factor has probably been advancements in technology which have created a smaller demand for low-skilled American labor workers in the economy. Many of our factories now use advanced technology meaning they require fewer labor workers but also require workers skilled to work on the machines if they malfunction.
    Therefore American businesses must deal with this issue because it is having a negative impact on the job market. The poor will never live comfortably and their standard of living will not increase. As a result, their quality of life will not increase.
    Headley, R. (2009) Cheap labor is slowly destroying the american economy. Retrieved from http://voices.yahoo.com/cheap-labor-slowly-destroying-american-economy-2879315.html on January 20, 2014

    • Jenelle I agree! One of the best ways to improve conditions for low-wage workers is to lift their pay, and one of the most effective ways to accomplish this is by generating good jobs in an economy with a tight labor market (Mishel, Bernstein, and Shierholz 2009). History shows that full employment—which is the utilization by the labor market of virtually all willing workers—lifts the living standards of working families because lower-wage workers in very tight labor markets gain the bargaining power to demand higher pay and/or better working conditions,(Theiss, 2012).

      Of course people who are low wage earners really need to get themselves into an educational program whether it be through the governments help or possibly within their own company they work for.

      Mishel, Lawrence, Jared Bernstein, and Heidi Shierholz. SWA 2009. State of Working America: 2008–2009. An Economic Policy Institute book. Ithaca, N.Y.: Cornell University Press.

      Theiss, R. (2012, April 27). Trends and challenges for low-wage workers. In The Future of Work. Retrieved January 25, 2014, from http://www.epi.org

  9. No one likes the idea of outsourcing, but businesses like it because it saves them money and helps them to compete in a global market. In the article Why Money Chases Cheap Labor – The Outsourcing Phenomenon, Theodore di Stefano states, “This need to keep labor costs low is part of a very old capitalistic dynamic whereby a company is compelled to keep its costs down because consumers are demanding good products at cheap prices” (2006). While outsourcing makes sense to a business’s bottom line, it can also hurt them domestically.

    Outsourcing is nothing new and will continue. However, if Americans are jobless they cannot purchase homes, cars, or spend money. According to Forbes contributor, Panos Mourdoukoutas, “If carried to the extreme, outsourcing turns corporations into opportunistic institutions without a vision, heading into a collision course with its most valuable partners—labor, customers, and the community” (2011). In a competitive world many can benefit from outsourcing; however, if this is not regulated at what expense — loss of American jobs, increased poverty, or social unrest?

    Di Stefano, T. (2006). Why money chases cheap labor – the outsourcing phenomenon. E-Business Times. Retrieved from http://www.ecommercetimes.com

    Mourdoukoutas, P. (2011). The unintended consequences of outsourcing. Forbes. Retrieved from http://www.forbes.com

    • Denise,

      Good commentary!

      However, do most businesses worry about threats to their current workers or

        the very

      unemployed if…it makes investors and shareholders happy?

      Professor Green

      • I would like to say yes, but the answer is probably no. However, all businesses have to be aware of the need to build people and societies in which they are located in. If they continue to undermine the relationships of the American people they could see negative impacts over time.

    • As the trends of healthcare move to more people getting benefits and the need to use the benefits that they are paying for the, insurances will probably charge more or the services will go up as well. So will the outsourcing in the healthfields increase to meet the needs and demands of the ailing public. The healthcare issues are continually increasing by the demands of the aging public and increasing costs of medical. It is important to look at the whole costs of insurance, medical costs, durable goods in the medical field and hospital settings as well.

      Upcoming Challenges and Opportunities in Healthcare Outsourcing | Article Outsourcing Center, Kathleen Goolsby, Senior Writer | January 1, 2010 | – See more at: http://www.outsourcing-center.com/2010-01-upcoming-challenges-and-opportunities-in-healthcare-outsourcing-article-37464.

  10. When thinking about cheap labor and the global market, China seems to be a big part of this subject. China’s economy grew extremely fast because of their abundance of cheap labor. Foreign companies invested into China because of the money that they could save by paying less to produce products. However, the global market is still changing. Eventually, a country like China who provides cheap labor will evolve into a country with increasing needs that will bring balance back into the global economy. According to a publication on the International Monetary Fund, “foreign manufacturers may find it increasingly less profitable to produce in China, raising their domestic employment; Chinese goods could become less competitive in global markets, potentially raising export shares elsewhere; and rising Chinese prices could pass through to trading partners that rely heavily on imports from China” (Das & N’Diaye, 2013). This assessment indicates that employment from countries like China will decrease after their economies increase as a result from foreign investments. Likewise, U.S. employment would eventually increase after the employment costs of these third world countries increased. A company that wants to invest into a country for cheap labor should do so for now, but in the end a balance will occur.

    Das, M., N’Diave, P. (June 2013). The end of cheap labor. Retrieved from https://www.imf.org/external/pubs/ft/fandd/2013/06/das.htm

  11. One of the reasons the participation number has dropped is the senior citizen demographic. People now live longer lifespans than ever before and technology is getting more advanced at exponential rates. The more elderly work sector cannot keep up with the technological changes in the workplace. Part of this due to lack of experience, part of this due to stubbornness. (we all some seniors who get set in their ways) But what this does is leaves them unemployable to the sectors they once knew. Dr. McCarren from our International Business course had a great example of this. He told us the story of an elderly woman who her entire life she mastered the upholstery trade. she was the fastest that people could get at it and was very successful. She worked her entire life at a shop where she was a valuable employee…until a machine took her job. The skill set she had was obsolete due to technology. The job market left to her is difficult. While the NCPA reports that while displaced workers in their fifties have a 70 percent to 75 percent chance of finding a job within two years of losing one, their new employment is often short lived. (cit.) The participation number also has many other factors, but this is certainly a contribution.

    NCPA (2010). Elderly unemployment. Retrieved from http://www.ncpa.org/sub/dpd/index.php?Article_ID=8009

  12. Outsourcing is just a way of business today. The company I work for manufactured products in another Asian country because if we were to manufacture it here we could not successfully compete in price. Companies are far more interested today in he bottom line of their income statements than with the ethical dilemmas that may be associated with cheap over seas labor. “True, the labor savings from global sourcing can still be substantial. But it’s peanuts compared to the enormous gains in efficiency, productivity, quality, and revenues that can be achieved by fully leveraging offshore talent.” (Bloomberg, 2006) Inversely, the existing system does sustain the company and thus sustains the jobs of us here and those people there who manufacture for us. If we went with an American company for this manufacturing, we would be unsustainable and they would lose business and possibly lay off their workers. Its a Catch 22 scenario, and that seems to be the case with many of these more significant ethical dilemmas. Globalization has opened up a realm of possibilities and complications that we are having to discover, adapt, and repair for some time to come, and in a world of hierarchical society, it’s unlikely that we will ever reach the ethical nirvana which allows everyone to win, as sad as that is to say.

    (2006) The future of outsourcing. Bloomberg. Retrieved from http://www.businessweek.com/stories/2006-01-29/the-future-of-outsourcing

  13. In today’s economy, every business will eventually have to consider outsourcing and for good reason! Labor is infinitely cheaper outside of the U.S. Jay Bryson, a global economist for Wells Fargo explains, “When jobs move from a factory in the South to one in Guatemala or China, it certainly has a negative impact on that community in the short run…but in the long run it makes things more efficient.” As horrible as it may sound, I think Mr. Bryson is correct. With outsourcing, prices for consumer goods are ofter less expensive.

    Hargreaves, S. (2012). The case for outsourcing jobs. Retrieved from http://money.cnn.com/2012/09/14/news/economy/outsourcing-jobs/

  14. Outsourcing has become a red word in today’s culture. Many Americans peg this as one of the key reasons the job market struggles so much. While it is key, one must really look at why consequences would take place should businesses move everything back home. Jobs would surge, sure. But profits and growth would be devastatingly low. I have always been of the thought that a business owner’s job is to create as much profit as possible, within the law and ethical boundaries. While that sounds shrewd, its the simple fact of today’s culture. If you aren’t willing to globalize and find cheaper labor, land, and material you simply cannot compete and survive. Americans are quick to arms about outsourcing, but in my opinion they would be much quicker in arms about pricing if companies were to move everything back to the US. Ultimately, I think that there is a balance that can be met between outsourcing and providing jobs here, but that balance simply has not been met.

  15. Many companies are forced to search for cheaper labor if they are to survive in today’s economy. While this might work financially for some industries, for other industries, outsourcing abroad is not an option. Another way in which some industries are decreasing human resource cost, is by changing the mix of the workforce, employing more part time and temporary staff. This lowers costs by having fewer benefit-eligible employees and allows more room for flexing a schedule to the needs of the organization, hence decreasing the financial impact to the company. While this is effective in helping the bottom line, it has significant consequences to employees. A study conducted by Schultz and Doorn (2011) demonstrated in fact that overall, employer dollars spent on health coverage for workers have declined. Much of this has been due to fewer workers covered as a result of a higher percentage of a variable workforce. One can appreciate the negative impact on quality of life that could be experienced if the availability of full time employment, with benefits, were to become more challenging to find.

    Schultz, J. and Doorn, D. (2011). Employer health benefit costs and demand for part-time labour. Applied Economics Letters, 18, 213-216.

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