WASHINGTON, MAY 14, 2004 - The much-vilified
process of outsourcing - where American companies employ workers
overseas - actually has helped boost the U.S. economy and create
millions of other jobs here at home, according to a new paper from
The Heritage Foundation.
Timothy Kane, Brett Schaefer and Alison Fraser debunk several "myths" about outsourcing, including the claim that America is losing jobs, the idea that outsourcing is a one-way street, and the belief that government can protect American workers from outsourcing.
The facts show our economy is getting stronger, the Heritage experts note. The unemployment rate is low, jobless claims are down and more Americans are working than ever before. Plus, there are currently 6.4 million "insourced" jobs in the United States - jobs where foreign firms are employing Americans here. And attempts at protectionism, such as the recently lifted steel tariffs that increased prices and cost American jobs, usually fail.
The analysts stipulate that some Americans lost their jobs to outsourcing, and we can expect more losses in the future. Forrester Research, a technology research firm based in Cambridge, Mass., estimates that some 3.3 million service jobs will be outsourced between 2000 and 2015.
Still, "according to these numbers," the analysts write, "at worst, jobs lost to outsourcing represent 0.71 percent of all jobs lost per quarter as part of normal turnover in the economy." And in any event, they write, "the gains of trade have been shown to vastly outweigh the costs, even when job dislocations are factored into account."
Nevertheless, the Heritage experts say, the government can take some steps to make the climate more conducive to job creation. For example, they recommend: