NCPA - National Center for Policy Analysis

The Battle Over Offshoring

May 12, 2004

Fear of losing high-paying, high-skilled jobs through outsourcing is unwarranted, says Columbia University professor Jagdish N. Bhagwati, an international trade expert.

According to Bhagwati:

  • The number of jobs in IT (information technologies) - related sectors was about 17 million in 2002
  • Only 100,000 of those jobs are outsourced annually -- even future predictions of up to 225,000 jobs outsourced annually over the next 15 years still accounts for only 1.5 percent of available IT jobs.
  • Bhagwati predicts that IT jobs will expand, as "prodigious technical change" is the main growth engine in the economy.

Moreover, Bhagwati believes that the panic over outsourcing is further fueled by the fact that the American social safety net is not as strong as in, say, European countries, and that the personal safety net is lost when families are frayed, as they are today.

Additionally, Bhagwati argues that the AFL-CIO has gotten a "stranglehold" on the Democrats, so the party is promoting protectionism under the guise of pushing for higher labor and environmental standards in other countries.

Bhagwati advises against any protectionist measures imposed by the United States, arguing that managed trade policies sound good in theory, but do not work in practice.

Source: Timothy Aeppel, "Offshore Face-Off," Wall Street Journal, May 10, 2004.

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http://online.wsj.com/article/0,,SB108378189296402848,00.html?mod=2%5F1086%5F2o

 

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