Lefty Support For "Offshoring"

Newsweek's lefty economics commentator Robert Samuleson opines:

Remember the great "offshoring" debate? It was all the rage a few years ago. Modern communications allowed white-collar work to be zapped around the world. We faced a terrifying future of hordes of well-educated and poorly paid Indians and Chinese stealing the jobs of middle-class engineers, accountants and software programmers in the United States and other wealthy nations. Merciless multinational companies would find the cheapest labor and to heck with all the lives ruined in the process.

What happened? Well, not much.

... [an economist] examined a survey on "mass layoffs" from the Bureau of Labor Statistics to see how many stemmed from offshoring. The answer: 4 percent. That included both manufacturing and service jobs.

In 2004 and 2005, the BLS counted almost 1 million workers fired in layoffs of 50 or more. That isn't a huge number in a labor force of about 150 million. Moreover, most causes were domestic. The largest reason (accounting for about 25 percent) was "contract completion"—a public works job done, a movie finished. Other big categories included "downsizing" (16 percent) and the combination of bankruptcy and "financial difficulty" (10 percent). Only about 12 percent of layoffs stemmed from "movement of work"—a category that would include offshoring. But two thirds of those moves were domestic.

[he] located a similar survey for Europe.

And here Newsweek's leftish international commentator Fareed Zakaria expresses his similar view.


Nadir said...

Yeah? Well, here's a blog I posted just yesterday showing that a news website in California is outsourcing its local news reporting to India.


Perhaps you haven't lost YOUR job yet, but I know my engineer wife deals with a Chinese company that is contracted by the tier one automotive supplier she works for. Traditionally this job would go to a US or even a Canadian firm. Her corporation is dealing with all kinds of problems from language barriers, distance, time zone issues and lower quality just to save a buck.

This is a real problem that isn't going away.

The definition of a "mass layoff" is "When 50 or more new claims for unemployment benefits are received from one establishment in a given month".

In the 4th quarter of 2006, the Bureau of Labor Statistics counted a total of 1444 mass layoffs. Of those layoffs, 614 (or 42.5%) were layoffs of between 50 and 99 people. That means somewhere between 30,700 and 60,786 people lost there jobs in smaller mass layoffs.

There were 340 mass layoffs of 100-149 people, 158 mass layoffs of 150-199 people and so on. In the 4th quarter of 2006, there were 26 layoffs of 1000 people or more. That means that a minimum of 26,000 people who lost their jobs were in that group of large layoffs.

4% of 1444 mass layoffs is roughly 58 layoffs. Were those layoffs of 50 people or were they layoffs of over 1000 people? Your figures don't tell us.

So we could assume that the 4% of people who were laid off due to outsourcing is at least 2900 and could be more than 58,000. Again, this is just for one quarter.

I come from a town of 15,000 people. When the rayon plants moved their operations overseas during the first wave of offshoring, the couple thousand layoffs devastated the community.

You can trivialize the loss of 58,000 jobs or 58 jobs, if you want to, but those are human beings we're talking about. They are not just statistics. They are people.

58,000 is half the popluation of Ann Arbor, two-thirds of Westland. It's the entire population of Saginaw.

IN ONE QUARTER!!!! That's a lot of people. It may not mean much to you, but it sure as hell means a lot to the neighborhoods, cities and families that are suffering those losses.

Paul Hue said...

Meanwhile lots of other jobs get created, this process has in any case been happening constantly since the 1950s, and one result is lower prices for consumers, leaving them to spend on other things... things that require jobs to produce, distribute, and sell.