Wednesday, August 11, 2004

Non-Issue - outsourcing

You know, it's rather annoying that the topic of job outsourcing is being brought up by the Kerry campaign. It's an easy topic to use and rouse up your supporters, but really, it's a serious non-issue. I understand why Kerry is using it - he's wants to put the focus on how bad the economy is right now, but why focus on outsourcing? It doesn't help to make people think the economy is being torn apart by jobs going to India, China, or wherever. There's so much information on this that I'm not going to link to much.

The basic numbers are this: Forrester Research claims that by 2015 (11 yrs from now) a TOTAL of 3.3 million American jobs will be lost to outsourcing. The Economist estimates that the regular American job market (regardless of outsourcing) churns through 7-8 million jobs every quarter. What that means is that the economy is robust enough to recycle 7-8 million jobs every quarter anyways, not that the economy will lose or gain 7-8mm jobs. That means 308-352 million jobs will be churned through in the same period as Forrester Research. Over the next 11 yrs, the estimates show that outsourcing accounts for only about 1% of the jobs out there. That's nothing!

Plus, the estimates are that only about 2-5% of total jobs lost are due to outsourcing. Again, that's nothing!

Okay, I'll admit that when you look at specific segments of the job market, the percentages are higher, but even then,

So c'mon Kerry, pick on the economy in more constructive ways than singling out outsourcing. Ya those jobs may seem huge when you talk to someone who's "lost" his job to outsourcing. But really, there are more important things to concentrate on relative to the weak job market. Saying you will encourage companies to keep jobs here means one of two things (maybe both): A) You don't want companies choosing the most efficient way to run their businesses, especially if it means hiring people outside of the US, or B) You will subsidize companies to hire people here even though is costs more.

Don't we already have a problem subsidizing people who don't need it (eg, corporate agriculture)?

So one more thing, I don't believe Bush has done much good for our economy, but he's certainly not the one forcing companies to push jobs overseas. Let's focus on things which actually can actually improve our economy. If Kerry wants to pick on Bush about the economy, he should focus on the fact that the recent (enormous) tax cuts haven't really put much money into the hands of the average consumer. If we all agree that this is a consumer driven economy, and that companies will hire and grow their business if consumers are there to buy their goods, then governmental stimulii should focus on that consumer! There's an issue to talk about if you want to get the masses on your side.

Now, I know I'm leaving a lot of holes in my argument. I should really fill in those gaps, but I'm too lazy to do so right now. Obviously this is a more nuanced than just saying it's not an issue at all, but I think everyone should see that outsouring is not an issue which should be at the top of an economic agenda.

UPDATE, 1:22pm: Here's a more nuanced take on this issue from . Now, if Kerry wants to focus on the social ramifications and real solutions to outsourcing (rather than just financially incenting businesses to stay here) this could be a real talking point. But I don't think any political issue brought up in this election season will allow for more nuanced discussions. It's all sound-bites from here on.

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