Arnold Kling  

Outsourcing Data

Economics of Health Insurance... In Praise of Failure...

Daniel Drezner writes that actual data on outsourcing has been hard to come by.

Now, however, we can add some actual figures to the overheated debate. The Government Accountability Office has issued its first review of the data, and one undeniable conclusion to be drawn from it is that outsourcing is not quite the job-destroying tsunami it's been made out to be. Of the 1.5 million jobs lost last year in "mass layoffs'' - that is, when 50 or more workers are let go at once - less than 1 percent were attributed to overseas relocation; that was a decline from the previous year...

The Bureau of Labor Statistics estimated that in the first quarter of this year 4,633 workers were laid off because of offshoring. In the same period Kodak, for example, announced layoffs of 15,000 workers because the growth of digital photography reduced demand for film.

Of course, thanks to Bryan Caplan, we know why fear-mongering over outsourcing works better than fear-mongering over technological change. It's anti-foreign bias at work.

For Discussion. Is the outsourcing issue approaching its political expiration date?

COMMENTS (1 to date)
Brad Hutchings writes:

Is the outsourcing issue approaching its political expiration date?

Sadly, the outsourcing issue has become part of the common wisdom. In mixed company, it is probably safer to bring up the stupidity of anti-price gouging laws in the wake of Florida hurricanes than to try to make a case for outsourcing. Or maybe a tad safer for W to note illegal immigrants' economic desires when questioned by O'Reilly why we don't have a 600 foot fence on the border and nuclear weapons as a backup.

Incidently, The Apprentice this evening made an incredibly obvious case for outsourcing. The women spent all night cleaning their restaurant. The guys hired a cleaning service and got some sleep, then performed much better the next day. The show presented a no-brainer example that everyone can grasp. Yet when it comes to foreign trade, such a disconnect...

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