Deinonychus antirrhopus

Offshoring

I was checking out the National Taxpayers Union's site and ran across this paper on offshoring (aka outsourcing). It is pretty good and I recommend that everybody who has some interest in the issue of offshoring read it. The bottom line is that despite all the hysterical news headlines the idea that lots of jobs are moving offshore is over blown. Big shock. The article covers such things as

• Offshoring scare mongers rely on gross numbers not net numbers. For example, recently headlines were made with a report that suggests 3.3 million jobs will move offshore. There is no attempt to find out how many jobs will move "onshore" so that a net loss or gain number can be determined.

• Many of the jobs that are offshored, contrary to popular belief, are not high paying jobs. In fact, most jobs threatened by offshoring pay a wage below the U.S. average. Also of the 12 IT occuptaions that pay more than $50,000 in 2002 8 of those occupations increased their employment from 1999 to 2002.

• The U.S. maintains a sizable trade surplus in the provate services sector. That is the U.S. exports more services than imports (note that importing services is basically offshoring).

• BLS has now started looking at this issue and some of its initial findings argue agianst the seriousness of offshoring. Of the 239,361 nonfarm workers who were seperated from their jobs 31 days or more in quarter of 2004, only 4,633 lost their jobs to offshoring.

So this idea that offshoring is a big problem, is yet another example of the media hyping a non-issue.

Further, one reason why we are seeing more about service importing is that parts of the third world are starting to "catch up" in some areas like education. India for example, is not merely a source of cheap labor, but a source of cheap educated labor. I find it is amusing that many of the people who point to the shabby way the U.S. treats its allies are often the same ones who say that something has to be done about offshoring--i.e., punish these very same allies for out competing the U.S.

Part of the problem may also be traced back to the poor K-12 education in the U.S. in terms of math and sciences. According the the article, the U.S. ranks 37th in the world in terms of educating pupils in math and sciences. Odd isn't it how the Left, which was complaining about offshoring, is also in the pocket of the teachers unions and there is considerable resistance to correcting the problems in regards to teaching sciences and math.

Anyhow, read the paper, it has lots of interesting information.