Out of Control Policy Blog

Where did all the jobs go?

Nowhere, says sober-minded Daniel Drezner:

The Government Accountability Office has issued its first review of the data, and one undeniable conclusion to be drawn from it is that outsourcing is not quite the job-destroying tsunami it's been made out to be. Of the 1.5 million jobs lost last year in "mass layoffs'' - that is, when 50 or more workers are let go at once - less than 1 percent were attributed to overseas relocation; that was a decline from the previous year.
...
The data did show that from 1997 to 2002, annual imports of business, technical and professional services increased by $16.3 billion. However, during that same half-decade, exports of those services increased by $20.5 billion a year. In 2002 alone, the United States ran a $27 billion trade surplus in business services, the sector in which jobs are most likely to be outsourced. The G.A.O. correctly stressed that it is impossible to compute exactly how many jobs are lost because of outsourcing, but unless its figures are off by several orders of magnitude, there's no crisis here.
...
The Bureau of Labor Statistics estimated that in the first quarter of this year 4,633 workers were laid off because of offshoring. In the same period Kodak, for example, announced layoffs of 15,000 workers because the growth of digital photography reduced demand for film.

Still, all the paranoid politicking seems to have paid off:

This month a poll by Zogby International for the Foreign Policy Association found that 71 percent of Americans believed outsourcing was hurting the economy. It also found that 62 percent of American workers believed the federal government should penalize companies that send work offshore.

BTW, check out the outsourcing section of Reason's just-released Annual Privatization Report.

Ted Balaker is Producer


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