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The Outsourcing Bogeyman - varnamvarnam
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The Outsourcing Bogeyman

It seems the Democrats have stopped harping on “Outsourcing is evil” message because the number of jobs lost was only a very small percentage.

bq. THE FUROR OVER “offshoring” of jobs to countries such as India, so pronounced during the Democratic primaries, seems to have faded. With good reason: Last week the Labor Department published the first government effort to quantify the impact of offshoring, which tentatively suggested that it may be responsible for just 2.5 percent of the job losses in the first quarter of this year. [“Washington Post”:http://www.washingtonpost.com/wp-dyn/articles/A53706-2004Jun18.html]

“Daniel Drezner”:http://www.danieldrezner.com/archives/001365.html#001365 has a detailed analysis of the Labor Department Report.

bq. So, to conclude — the percentage of jobs lost due to mass layoffs — in turn due to offshore outsourcing — as a percentage of total jobs lost through mass layoffs was not 3% — it was a whopping 1.9%. If you drop out seasonal employment, the figure rises to 2.5%. So my back of the envelope calculations from a few months ago are an exaggeration. My apologies.

bq. The caveats — this data does not cover two other kinds of job loss via outsourcing — 1) Those let go due to ousourcing when fewer than 50 people were let go; and 2) Those jobs created de novo overeas that may have been created in the U.S. instead were it not for the outsourcing phenomenom.

bq. At the same time, this data also does not cover two kids of job gains via outsourcing — 1) Those jobs created via insourcing, when a foreign firm hires U.S. workers; and 2) Those jobs created via the budgetary savings reaped from outsourcing.

bq. The bottom line — offshore outsourcing is responsible for a piddling number of lost jobs. [“Daniel Drezner”:http://www.danieldrezner.com/archives/001365.html#001365]


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