Commentary

Offshoring Fears Overblown

Though figures on how many jobs have flocked overseas are scarce, economists from across the political spectrum say it would be a mistake to blame global outsourcing for sluggish job growth in both the service and manufacturing sectors. Forrester Research, an independent technology firm based in Cambridge, estimated in a November 2002 report that 3.3 million service-industry jobs would be relocated abroad by 2015, compared with the 108 million service-related positions that existed as of January. Despite the exodus of call centers and medical transcriptions to such low-wage countries as India, America’s financial sector, architectural-engineering industries, and computer-science businesses actually posted employment gains between 1999 to 2003, according to the Institute for International Economics. Less than 5 percent of jobs associated with the nation’s $200 billion-a-year information technology industry have migrated overseas, says Daniel Griswold, associate director at the Cato Institute. “The anxiety over outsourcing is based entirely on anecdotal evidence,” said Griswold. “There is little evidence the US economy is losing a large number of jobs from trade.”

Geoffrey Segal is the director of privatization and government reform at Reason Foundation, a nonprofit think tank advancing free minds and free markets. He is also editor of Reason's Privatization Watch.