Great Depression II in the Making?
The debate on the impact of outsourcing to U.S. economy and employment outlook continues to dominate the 2004 election campaign. Many presidential candidates have made it a part of their "selling" platform and the possible "X factor" that could help them win the election.
To support the bill that calls a ban for outsourcing government jobs offshore, many experts have started to wonder what the next steps would be. According to Thomas Sowell from Capitalism Magazine, if we impose restrictions to limit the outsourcing of American jobs, will it lower unemployment rate?
The notion that by eliminating the export of American jobs to other countries would save future downsizing and increase job growth is probably no more than a mere speculation. In my March 15, 2004 entry entitled "The Bright Side of Outsourcing," the United States is in fact the largest exporter of services, which actually makes them the largest outsourcing supplier in the world.
This explains why only one job out of 100 layoffs in the United States are caused by outsourcing jobs offshore.
Imposing restrictions to limit outsourcing US jobs might even cause far greater a problem: retaliation from importing countries. This is something that would definitely cause American workers to lose their jobs due to "outsourcing problems," which will be the ceasation of exported services.
I personally do not agree with the bill calling a ban of outsourcing US government agencies' jobs. I do not agree with some presidential candidates' platform to reduce outsourcing of US jobs either. It would be irresponsible to approach the macro economy from a single issue.
In a capitalist economy in which the check-and-balance system is in place, such as in the United States and other western countries, a failure in one area would not create a domino effect provided that the three powers (executive, legislative and judicial) work hand-in-hand to objectively understand the problems at hand and work things out carefully.
Sowell further added that many economists blamed trade restrictions that were supposed to "save jobs" for making the Great Depression in the early 1930s worse and longer lasting.
We don't want to create Great Depression II, do we?
- Author and blogger Jennie S. Bev can be found at JennieSBev.com
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Offshore outsourcing has very little to do with the ecconomic problems we are facing right now. All in all, there are not even *that* many jobs that have or will be going overseas. Out of about 130 million jobs in the US, only about 900,000 are estimated to have gone oversears since 2000, and up to 3.3 million are projected to go overseas BY 2013! Compare that with 15 million jobs that will become available through retiring babyboomers leaving the workforce, and this is a drop in the bucket.
There are many reasons why jobs are slow to come back. One other one that is often overlooked is that health care costs have not only risen for individuals, but also for employers. An employee now costs $7000 to ensure — enough reason not to hire more for some companies.
For a good discussion, see:
http://www.seinquest.com/content/Wiki.jsp?page=OffshoreOutsourcing
Comment by Hanns-Oskar Porr on March 22, 2004 2:14 pm
I work for an international company based in the US that is almost completely distributed. I have worked for a British Defense contractor. When the American project manager goes overseas to manage a worldwide project for a European company, it’s the same kind of outsourcing that is described so disdainfully by many. I currently am practicing that form of outsourcing now by waiting for a message from an Indian in Mumbai that he has completed a job for me in the US.
The point is that the door swings both ways. The US has had a history since WWII of going all over the world to perform work for other countries. Is it no suprise that other countries watch this and decide that this approach is a good thing.
It certainly explains why most of the countries I deal with have learned English, Science, Math, Computer Science, Project Management and the other people skill to do our jobs.
Maybe some persons should take the example we are being offered by other countries. A message that we delivered to them years ago.
Comment by nedludd on April 6, 2004 12:54 pm