Outsourcing Is Nothing To Be Worried About

by John Hawkins | February 17, 2004 11:59 pm

Everywhere you turn lately, it seems there’s someone else worried about outsourcing. But look folks, there is nothing to be worried about.

To begin, it’s not that big of a phenomenon. “Forrester Research[1] predicts that 3.3 million white-collar jobs will be lost to offshoring by 2015.”

The loss of 3.3 million jobs over 15 years in a nation of our size isn’t exactly something that should prompt people to grab their shotguns & a 6 month supply of beans before they head to the fall-out shelters. Especially since over the long haul, outsourcing will create more jobs in the United States than it costs us.

Now, a lot of people don’t buy into that because they can “see” the jobs that were lost, but there is no way to specifically point to the jobs that were created. But, you have to consider a number of factors including…

— Those people overseas getting those 3.3 million jobs will spend some of the money they receive on American products which will create jobs back in the states.

— The money saved by the companies with outsourcing may be used either to hire people in the states or make upgrades in equipment that will make the company more competitive. That will eventually lead to increase in employment.

— Outsourcing may enable the company to produce a cheaper product which will allow consumers to spend more money on that product or on other goods which will lead to job gains.

— Most importantly, being able to produce a product more cheaply is a great advantage in the global marketplace. And the more competitive a company is, the greater likelihood it will thrive, profit, and grow — which means the company will hire more workers. On the other hand, a company that can’t be competitive will go out of business, which means it won’t be employing anyone.

Here’s the bottom line; the jobs that Americans do change over time. Some of them become obsolete, some of them move overseas, some of them are even being done here in the US by illegals. But as certain jobs disappear, they’re replaced, usually by better paying jobs. You can tell that by looking at the Per Capita Personal Income (in current dollars),[2] which has continued to grow, particularly in the last 25 years or so. So don’t sweat outsourcing, it’s nothing to be concerned about. To the contrary, it’s actually a net plus for the economy…