Posted on 03/31/2004 8:14:28 AM PST by Isara
Jobs: Outsourcing has become a convenient bogeyman for politicians who want to scare Americans about their jobs. But, in fact, outsourcing is good for our economy.
Thankfully, those who know better are finally starting to make the case that outsourcing, far from being a detriment to American workers, is a major benefit.
How? It's true that outsourcing takes some jobs and sends them overseas. But that frees up capital for the creation of new, higher value jobs — jobs that pay well, and require skills and education. The kind of jobs that all politicians insist they want, but that few understand how to get.
As Federal Reserve Gov. Ben Bernanke noted Tuesday, outsourcing is responsible for maybe 2% of the 15 million jobs the economy loses each year. But with outsourcing — and the trade that goes with it — the economy churns out about 17 million new jobs each year.
Support for Bernanke's view came in a study released Tuesday by the Information Technology Association of America (ITAA).
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Outsourcing, it noted, helps free up money to buy better equipment, boost output and lower costs. These are all good things that lead to more jobs, not fewer.
Across the economy, the impact is huge. As the chart shows, by 2008 the economy should be about $124 billion larger, thanks to outsourcing.
Far from costing jobs, outsourcing actually adds them. In 2003 alone, ITAA says, companies added 90,000 jobs due to outsourcing; by 2008, that number will jump to 317,000.
Yes, outsourcing does cause some pain. Since the 2000 dot-com meltdown, some 372,000 tech jobs have been lost — as many as 104,000 of them due to outsourcing.
But those in Washington who think protectionism is an answer to short-term job loss from outsourcing are mistaken.
Presidential hopeful John Kerry is one of them. Just last Friday, he proposed sweeping changes to the corporate tax code that would punish companies for outsourcing.
That may be good politics, but it's bad economics. Protectionism leads to higher prices, lower output and fewer jobs. Even the ITAA, whose members routinely funnel money to protectionist politicians, called Kerry's proposals "unwise."
We agree. And, happy to say, so does President Bush.
Bush took a lot of flak a month ago for standing by his top economic adviser, Gregory Mankiw, after Mankiw asserted that outsourcing helps the economy. Mankiw was forced by congressional Democrats to apologize — not for being wrong, but for his "insensitivity."
On Tuesday, Treasury Secretary John Snow basically repeated Mankiw's remarks, saying outsourcing will create "lots of jobs."
This time, no apologies needed. They're right.
(Excerpt) Read more at investors.com ...
We reached Bangalore, India. The woman was extremely hard to understand, I'm still not sure of what she said. We did, after much repeating, manage to get Dad's password. Then she said something like "I going to transfer you now...you stay on!" and I was dumped into an unwanted sales pitch for software. I told this other woman I didn't want any software but she assured me it was "free". Then she asked for a credit card. Why, I asked, if it is free? Oh, we just charge one dollar to your credit card for shipping. It turns out that after 30 days they would have started billing a monthly service charge to "use the website".
Yeah, outsourcing is great all right! F*** AOL!
Some outsourcing speaks to the American advancement of greater freedom through free markets throughout the world, and pluses for the American economy in more American goods and services available to those growing international economies.
A certain symbiosis.
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