Leftists and union bosses are wrong on outsourcing

[^_^ 5,021]

Conventional wisdom (also known as uninformed speculation) has long held that outsourcing decimates American employment by shifting "our jobs" to another country and leaving nothing in its wake but rising rates of joblessness and ever-shrinking prospects for career growth, individual prosperity, and U.S. competitiveness.

In this scenario—a favorite for tub-thumping politicians and out-of-touch labor leaders looking to demonize corporations and pit "the working class" against "management"—amoral or even immoral business executives gleefully fire thousands of Americans and greedily hire thousands of lower-cost workers in other countries to prop up profits and fatter year-end bonuses.

According to this hallucination, these piggish executives ship "our jobs" overseas even though they know full well that those actions will undercut their companies' ability to compete, slash product quality and customer service, and eventually turn America into a third-world basket case, a barren wasteland filled with 300 million louts incapable of creating anything, producing anything, or caring for ourselves.

Well, it turns out that that depiction of outsourcing and of the citizens of the United States of America is not only grossly insulting but also wildly inaccurate.

The real truth about the impact of outsourcing on U.S. employment has been revealed via the research of economist Matthew Slaughter of Dartmouth's Tuck School of Business, whose astonishing findings were reported recently in the Wall Street Journal.

Consider these four head-spinning highlights from Slaughter's voluminous research on outsourcing's impact over the past decade:

--Instead of shredding employment opportunities in this country, outsourcing actually creates two jobs for every one displaced to another country.

--Those new U.S.-based jobs created as a result of the dynamic impact of outsourcing not only outnumber the jobs they replaced by a factor of 2 to 1, but the new jobs also offer better pay and demand higher skills than the old ones.

--The phenomenon is not limited to the U.S.: in the past generation, companies based outside the U.S. have doubled the number of jobs created in America.

--And, those workers at U.S.-based subsidiaries of foreign corporations earn significantly more—31% more—than do their counterparts at competing firms based in the U.S.

In his Journal guest editorial on outsourcing and politics that highlights Slaughter's work, former Secretary of Defense William S. Cohen writes that "when U.S. firms hired lower-cost labor at foreign subsidiaries overseas, their parent companies hired even more people in the U.S. to support expanded operations."

Cohen continues: "Between 1991 and 2001, employment at foreign subsidiaries of U.S. multinationals rose by 2.8 million jobs; during that same period, employment at their parent firms in the U.S. rose by 5.5 million jobs.

"For every job 'outsourced' to India and other foreign countries, nearly two new jobs were generated here in the U.S".

And as if that weren't enough of a repudiation of outsourcing's evil nature, Cohen piles it on with this additional insight: "Those new U.S. jobs were higher-skilled and better-paying—filled by scientists, engineers, marketing professionals and others hired to meet the new demand created by their foreign subsidiaries. . . .

"If Congress enacts legislation to stop American companies from outsourcing, foreign governments could do the same—and that could put at risk millions of high-paying jobs in the U.S."

http://www.informationweek.com/news/global-cio/interviews/showArticle.jhtml?articleID=228000211&cid=fbook

[Saddle Bronc 124]

Union logic is "our members got decimated due to losing jobs (for which we absconded when they came to us for help); the fact that a lot of them got new jobs doesn't count, because they are no longer our members".

[The_Dude 1,142]

http://www.youtube.com/watch?v=KLni3wbndls

[mawilson 2,133]

outsourcing actually creates two jobs for every one displaced to another country.

This almost sounds like the Obamanomics "debt-to-prosperity" theory of economic growth according

to which 1 dollar of government spending creates 2 dollars in the economy.

Also known as "BS".

[Dan J 277]

A shift in the workplace has been happening for years and it will continue to happen. Any job that can be outsourced globally or automated will be. The remaining jobs will be skilled positions often requiring a 4 year collage degree.

The jobs that we have lost in the last few recessions are the types of jobs that have not been recreated once the economy recovers. Thats going to leave a lot of people who are middle aged and approaching retirement unable to save for retirement and dependent on social security.

You can no longer make it by just working hard anymore. Now you will need to work hard, have good education and a bit of luck.

[mawilson 2,133]

You can no longer make it by just working hard anymore. Now you will need to work hard, have good education and a bit of luck.

Education is important? Who knew.

[^_^ 5,021]

The remaining jobs will be skilled positions often requiring a 4 year collage degree.

This is a good thing.

[mawilson 2,133]

The remaining jobs will be skilled positions often requiring a 4 year collage degree.

This is a good thing.

I agree. Any art form in which compositions are made out of pieces of paper, cloth, photographs,

and other miscellaneous objects, juxtaposed and pasted on a dry ground is going to be very important

to our future economy.

[one...two...tree 2,762]

This is a good thing.

Not so much for a big chunk of the workforce in this country - jobs that unfortunately, cannot be outsourced - service sector jobs. Should we tell them, tough sh!t?

[^_^ 5,021]

Should we tell them, tough sh!t?

If someone doesn't have a college degree and no real skills outside of answering a phone, then yeah.. that's exactly what they need to hear.

[I AM NOT THAT GUY 5,715]

If someone doesn't have a college degree and no real skills outside of answering a phone, then yeah.. that's exactly what they need to hear.

They outsource that too, big time, to the Philippines, and they all have college degrees as well. College degrees don't protect you anymore from losing your job. Mobility does.

[^_^ 5,021]

They outsource that too, big time, to the Philippines, and they all have college degrees as well.

That is what I call a waste.

[one...two...tree 2,762]

If someone doesn't have a college degree and no real skills outside of answering a phone, then yeah.. that's exactly what they need to hear.

Yes, lets continue marginalizing those hard working Americans who don't have any real skill sets, but nevertheless are needed.

Companies like Walmart pay low wages and benefits, and provide mostly part-time jobs--practices that lower standards for all retail workers. These companies claim that retail jobs should be "starter jobs," or "temporary jobs," when in reality these jobs are the future of our economy, and already employ millions of Americans of all ages, educational levels, and economic backgrounds. The number one job in America, according to the Bureau of Labor Statistics, is retail salesperson--a position held by some 4.2 million people as of May 2009.

http://www.huffingtonpost.com/joe-hansen/post_784_b_703681.html

[chri'stina 190]

I find this confusing since I have mostly just heard negative things about outsourcing.

[^_^ 5,021]

Yes, lets continue marginalizing those hard working Americans who don't have any real skill sets, but nevertheless are needed.

Needed? Yes. Worth much? No. Lots of things that are needed aren't worth much. It sucks to be needed but not worth much.