From today’s WSJ:
“U.S. companies sending computer-systems work abroad yielded higher productivity that actually boosted domestic employment by 90,000 across the economy last year, according to an industry-sponsored study.
The analysis, one of the few that attaches detailed dollar values to offshore outsourcing’s costs and benefits, was conducted for a coalition of business groups working to combat a growing backlash on Capitol Hill and in statehouses against the loss of U.S. jobs.
Expected to be released today, the study’s premise is that U.S. companies’ use of foreign workers lowers costs, increases labor productivity and produces income that companies can use to expand both in the U.S. and abroad. It was commissioned by the Information Technology Association of America, an industry membership and lobbying group, which hired the economics consulting firm Global Insight Inc. of Lexington, Mass.”
I believe it is both economically incorrect — as well as a losing argument — to focus on outsourcing as the primary culprit for the lack of job creation. Either you believe in global trade (as I do), or you don’t.
On the other hand, there’s nothing wrong with removing the incentives that encourage additional outsourcing. From a tax and regulatory perspective, it should be a level playing field without additional hurdles to creating jobs in the U.S.
When you see that actual numbers involved, they are relatively small. There are other, more significant issues impacting job creation; We will address them shortly.
Estimated new U.S. jobs created from outsourcing abroad, according to an industry study
Source: Global Insight and North American
Industry Classification System
Outsourcing May Create U.S. Jobs
Higher Productivity Allows For Investment in Staffing, Expansion, a Study Finds
WALL STREET JOURNAL, March 30, 2004; Page A2
Outsourcing creates jobs, study says
Industry report says offshore outsourcing will boost economic growth, lower inflation, create jobs
March 30, 2004: 3:53 PM EST