NCPA - National Center for Policy Analysis


June 29, 2004

While outsourcing does impose costs on those who lose their jobs, its benefits are real and impressive, says business magnate Steve Forbes:

  • Outsourcing cuts the cost for technology firms and other service providers by 60 percent.
  • By contracting out support services, U.S. companies use domestic workers in more productive jobs.
  • Every dollar spent on outsourcing creates about $1.13 of additional economic activity in the United States through spin-off effects.

The United States is also a key destination for international corporations looking to "insource" production and jobs, says Forbes:

  • Last year, 6.4 million Americans were employed by foreign companies' U.S. subsidiaries.
  • Numerous foreign carmakers, such as Toyota and Hyundai, have recently established plants in the United States.
  • Most of these foreign investments bring high-quality jobs, paying 19.1 percent more on average than U.S. companies.

Source: Steve Forbes, "Include Outsourcing When Considering Free-Trade Benefits," Investor's Business Daily, June 21, 2004.


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