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What is the impact of offshore outsourcing on the US economy and employment?

"Despite the outcry over the outsourcing of white-collar jobs to places such as India,the latest US Government data suggests that foreigners outsource far more office work to the US than American companies send abroad"
- The Wall Street Journal, March 15, 2004

Former Clinton Labor Secretary, Robert Reich says,"Outsourcing does not reduce jobs in America."
- The New York Times, February 15, 2004

In a special report by the Chamber of Commerce of the United States (April 2004), Thomas J. Donohue (President and CEO) states:

  • Increases in productivity, the recent economic downturn, domestic business impediments, and continued uncertainty are the primary reasons for recent job losses and the slow pace of hiring, not the movement of work offshore.
  • More white-collar office work is shipped from other countries to the United States than the country ships overseas.
  • When it comes to trade in services, "insourcing" exceeds "outsourcing" by nearly $60 billion annually.
  • Even with job losses in manufacturing and some service occupations, more Americans are working today than at any time in history. More than a half million payroll jobs have been created so far this year. The nation's employment machine is fundamentally strong, and trade is generating tremendous net benefits for the American people.
  • Under any estimate or forecast, the jobs being outsourced amount to a small fraction of the nation's 138 million strong workforce.
  • The nation's knowledge workers have not lost significant job opportunities to foreign competitors. The unemployment rate among Americans with a four-year college degree is just 2.9%.
  • The recent extension of worldwide sourcing from manufacturing to white-collar IT jobs does not threaten America's technological leadership.
  • By the year 2010, there will not be a shortage of jobs, but rather a shortage of workers.
  • To create jobs, it is critical that America remains open to the worldwide economy-where 95% of potential customers live.

According to a report by the McKinsey Global Institute (August 2003), every dollar of costs the United States moves offshore brings America a net benefit of $1.12 to $1.14 (in addition to the benefit to the country receiving the investment). Projecting a net savings to the American economy of $390 billion by 2010 due to sourcing, McKinsey reasons that as low value-added jobs go abroad, labor and investment can switch to jobs that generate more economic value. In addition, sourcing also creates export markets for US firms.

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