NCPA - National Center for Policy Analysis

HOW OUTSOURCING CREATES JOBS FOR AMERICANS

July 27, 2004

Increased economic globalization has caused jobs to move to the United States as well as away from it. And because of the higher, increasing productivity of American workers, the jobs that move here pay more than the ones that leave, says Bruce Bartlett.

Countries around the world are outsourcing their jobs to the United States in huge numbers, according to the Organization for International Investment:

  • For the past 15 years, corporations have moved jobs to the United States at a faster rate than jobs have left, for an 82 percent increase in insourced jobs compared to a 23 percent increase in outsourced jobs.
  • Manufacturing jobs have been insourced at an even faster pace than service jobs, more than doubling over the period (though beginning from a smaller base).
  • Jobs insourced to the United States increased from 4.9 million in 1991 to 6.4 million in 2001.
  • Insourced jobs pay 16.5 percent more than the average domestic job, and one-third of them are in the manufacturing sector.

The benefits of outsourcing to American workers and the U.S. economy greatly outweigh the costs, says Bartlett. Restrictions on outsourcing may save a few jobs in the short run, but they will come at the expense of better jobs in the future -- jobs that will not be created.

Source: Bruce Bartlett, "How Outsourcing Creates Jobs for Americans," Brief Analysis No. 480, July 27, 2004.

For text http://www.ncpa.org/pub/ba480/

 

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