Will Outsourcing Affect the Recovery?

Filed in archive Opinions & Insights on September 20, 2009

© Alex E. Proimos

One of the questions that have been going through the minds of many is whether the U.S. will have a "jobless recovery" as the recession begins to recede. A "jobless recovery" concerns many American economists because so much of our economy has moved away from heavy manufacturing to services, many of which can be outsourced with relative ease.

The next question is whether this "jobless recovery," should it occur, will create a political backlash against offshore outsourcing. In a large part, it likely depends on whether the unemployment rate stays stubbornly high, as many expect, or if it instead declines more quickly than otherwise thought. But more than just "decline" will define the concern - I believe that who remains unemployed will also be relevant.

Certainly, without money flowing to families through decent jobs, the consumer economy that has defined the American experience over the past 20 years will be difficult to re-energize. Failing to energize this segment will impact not only the American economy, but those economies that sell lots of goods into the U.S., such as China and Europe. Failing to energize this segment may also create a backlash that will, ultimately, lead to anti-outsourcing measures that will affect the labor markets in outsourcing-provider countries.

One article, from the UK's Independent, highlights the trend.

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