Fiscal Reality: Economy, Jobs Continue to Grow
April 30, 2004
The U.S. economy continues to surge, growing at 4.1 percent in the last quarter of 2003 and is expected to meet or surpass that rate of growth in 2004. In a recent report, the Heritage Foundation says that more Americans than ever are working (138.3 million people) and the unemployment rate remains at 5.6 percent -- a low level in historical terms.
In addition, the report suggests the issue of job outsourcing is overstated:
- Outsourcing is a two-way street: the number of manufacturing jobs "insourced" to the U.S. grew by 82 percent this year while the number of jobs outsourced grew by 23 percent.
- Outsourcing results in producing more final output with lower input costs, meaning lower prices for all U.S. firms and families.
- The benefits to consumers through lower prices, more jobs and a higher standard of living, outweigh the costs of lost jobs by about 100 percent.
Unfortunately, says the Heritage Foundation, in a political campaign there is a great risk that government will take action to choke the flow of free trade. Robert McTeer of the Federal Reserve Bank of Dallas summed up the promise of government action: "If we are lucky, we can get through the year without doing something really, really stupid."
Source: Tim Kane, Brett Schaefer, and Alison Fraser, "Ten Myths about Jobs and Outsourcing", Heritage Foundation, April 1, 2004.
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