A report called ‘Jobs, Trade, Sourcing and the Future of the American Workforce’ was released in April this year by the Chamber of Commerce of the United States. The release of the report was aimed at dispelling the myths of outsourcing, an issue that has come to dominate the debate on the current economic health of the US. Defined by the 2004 Economic Report of the President as the process by which ‘a company relocates labour intensive service industry functions to another country’, outsourcing or offshoring of US jobs has come to be seen as the key cause affecting the US economy. When seen as a key cause affecting the US economy its only natural that debate in this year’s election campaigning will focus on the impact of this ubiquitous and subjectively perceived threat. Debate has thus focused on the candidate’s ability to project an outlook for the US economy which strikes a chord with the majority of Americans and therein lays the relative support or attack on the process of outsourcing jobs. With little or no understanding of the process of offshoring and the reality of dwindling job numbers, the argument has been attributed for the ills of the US economy. But as the report shows, offshoring aids the US economy much more than it could ever hurt and here are the reasons why.
First, an increase in productivity, coupled with the economic decline and continued uncertainty are the primary reasons for the recent job losses and not the offshoring of work. Second, the report reveals that despite job losses in manufacturing and service sectors, more Americans are working now than at any other time in history. Third, no one has a clear estimate of the actual number of US jobs that have been outsourced. Under any circumstance it would amount to only a fraction of the 138 million strong US workforces. Fourth, insourcing beats outsourcing in the US economy, by nearly $60 billion annually ie more jobs are shipped to the United Stated from other countries than vice versa. Fifth, American knowledge workers have not lost out on job opportunities as a result of outsourcing with unemployment rates amongst fresh graduates being strikingly low. Sixth, outsourcing of technological jobs would not affect the leadership of the United States. Seventh, a projection, based on current data, shows that by 2010, there would not be a shortage of jobs but rather a shortage of workers. Lastly, the report underscored the relevance that the US remain open to economies worldwide and not adopt isolationist measures in response to a perceived threat from offshoring.
With the above reasons it becomes distinctly clear that a threat from offshoring remains just that – ‘perceived’. Objectively speaking also there is no single factor affecting the US economy. The burden of fiscal deficit can be factored in, as it is the largest ever in US history, besides rising oil prices, declining investor confidence, domestic and international security worries and the burgeoning burden on the exchequer as a result of the war on terrorism are all playing on the slow growth of the US economy and therein slowing employment figures. Despite all these factors the most rhetoric, in this election, has been on the effect of offshoring of jobs to countries such as India, China and Mexico. It’s relevant to understand the line which candidate comes to adopt as it reflects the party line, stage of campaigning, and the party’s base structure. Thus for President Bush it is imperative to showcase the accruable advantages and relevance of offshoring jobs to American companies while for Senator Kerry, it remains important to propound a line that is consistent with the multiple labour unions that have vouched support for his candidacy. With the release of this report and various journal articles on the relevance of offshoring, one can hope that the negativity associated with it can be dispelled.
First, an increase in productivity, coupled with the economic decline and continued uncertainty are the primary reasons for the recent job losses and not the offshoring of work. Second, the report reveals that despite job losses in manufacturing and service sectors, more Americans are working now than at any other time in history. Third, no one has a clear estimate of the actual number of US jobs that have been outsourced. Under any circumstance it would amount to only a fraction of the 138 million strong US workforces. Fourth, insourcing beats outsourcing in the US economy, by nearly $60 billion annually ie more jobs are shipped to the United Stated from other countries than vice versa. Fifth, American knowledge workers have not lost out on job opportunities as a result of outsourcing with unemployment rates amongst fresh graduates being strikingly low. Sixth, outsourcing of technological jobs would not affect the leadership of the United States. Seventh, a projection, based on current data, shows that by 2010, there would not be a shortage of jobs but rather a shortage of workers. Lastly, the report underscored the relevance that the US remain open to economies worldwide and not adopt isolationist measures in response to a perceived threat from offshoring.
With the above reasons it becomes distinctly clear that a threat from offshoring remains just that – ‘perceived’. Objectively speaking also there is no single factor affecting the US economy. The burden of fiscal deficit can be factored in, as it is the largest ever in US history, besides rising oil prices, declining investor confidence, domestic and international security worries and the burgeoning burden on the exchequer as a result of the war on terrorism are all playing on the slow growth of the US economy and therein slowing employment figures. Despite all these factors the most rhetoric, in this election, has been on the effect of offshoring of jobs to countries such as India, China and Mexico. It’s relevant to understand the line which candidate comes to adopt as it reflects the party line, stage of campaigning, and the party’s base structure. Thus for President Bush it is imperative to showcase the accruable advantages and relevance of offshoring jobs to American companies while for Senator Kerry, it remains important to propound a line that is consistent with the multiple labour unions that have vouched support for his candidacy. With the release of this report and various journal articles on the relevance of offshoring, one can hope that the negativity associated with it can be dispelled.
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