Outsourcing Results in Net U.S. Job Growth

[rexbo 104]

Outsourcing Results in Net U.S. Job Growth

WALTHAM, Mass., March 30 /PRNewswire/ -- Global Insight, Inc. announced today the release of a new study, "The Impact of Offshore IT Software and Services Outsourcing on the U.S. Economy and the IT Industry," commissioned by The Information Technology Association of America (ITAA), the leading trade association for the IT industry.  The Global Insight research team was led by chief economist Dr. Nariman Behravesh, who is recognized as one of the world's most accurate economic forecasters.  Nobel Prize winning economist Dr. Lawrence R. Klein, the founder of WEFA and a Global Insight associate, made significant contributions to the Study.

    The in-depth Study found that global sourcing of computer software and services, while displacing some IT workers, actually benefits the U.S. economy and increases the number of U.S. jobs.  According to Study findings, the U.S. economy has much to gain from global sourcing and an environment of free trade, open markets and robust competition.  Benefits include job creation, higher real wages, higher real GDP growth, contained inflation and expanded exports resulting in increased economic activity.

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Using offshore resources lowers costs and boosts productivity.  As a result, inflation is lower, interest rates are lower, and economic activity is higher.  The increased economic activity creates a wide range of new jobs, both in IT and other industries. While there are some dislocations that affect both industries and regions, the overall economy adjusts so that offshore IT outsourcing actually creates new jobs.  Over 90,000 net new jobs were created in the U.S. through 2003.  The number of net new jobs is projected to grow by 317,000 in 2008.  The impact on U.S. jobs does vary by industry sector, with the major beneficiaries for the next five years being construction, transportation and utilities, education and health services, wholesale trade, and financial services.

    "The benefits of free trade clearly provide a boost to the U.S. economy," stated Dr. Behravesh.  "Using offshore resources reduces costs, dampens inflation, lowers interest rates, increases spending and creates additional jobs.  The challenge is to help displaced workers transition to other productive activities," he concluded.

[TrueBlue72 0]

Are you trying to confuse the Demoncrats with facts again???? Don't you know that article is "off message" and doesn't agree at all with their talking points!!!!!

[Proud Tiger 4,261]

I'm not an economist so I can't argue this case. But I admit to being natually skeptical. I hope the IT world and others don't end up in the same casket as the textile industry. :unsure:

[AU Tailgating Rules 0]

I'm not an economist so I can't argue this case. But I admit to being natually skeptical. I hope the IT world and others don't end up in the same casket as the textile industry. :unsure:

One of the things you have to remember about manufacturing problems in the U.S. is that in many case we have caused our own dispair. Where it not for labor unions placing undue requirements on domestic companies (Pushing up labor costs, benefits, strikes, etc.) many of the industries who are no longer competitive on a global scale would still be thriving. If you want to start blaming someone for loss of jobs to outsourcing, the Dems ought to look inward to the labor unions as one of the major causes.

[LegalEagle 22]

If there are no jobs in America, even the cheapest of goods will not be affordable.

[TitanTiger 21,241]

Since 5.6% unemployment is historically at or under the average unemployment rate over the last several decades or more...how is that having "no jobs in America"?

[LegalEagle 22]

Since 5.6% unemployment is historically at or under the average unemployment rate over the last several decades or more...how is that having "no jobs in America"?

I believe it's a couple of times higher than that of the last administration.

The damage is just beginning. Hang around and watch.

[MDM4AU 338]

Since 5.6% unemployment is historically at or under the average unemployment rate over the last several decades or more...how is that having "no jobs in America"?

I believe it's a couple of times higher than that of the last administration.

The damage is just beginning. Hang around and watch.

W's number v. Clinton since you brought it up (LINK)

According to Labor Dept., UE Rate in '90s was 5.8...

[sevenDs 0]

I'm not an economist so I can't argue this case. But I admit to being natually skeptical. I hope the IT world and others don't end up in the same casket as the textile industry. :unsure:

One of the things you have to remember about manufacturing problems in the U.S. is that in many case we have caused our own dispair. Where it not for labor unions placing undue requirements on domestic companies (Pushing up labor costs, benefits, strikes, etc.) many of the industries who are no longer competitive on a global scale would still be thriving. If you want to start blaming someone for loss of jobs to outsourcing, the Dems ought to look inward to the labor unions as one of the major causes.

Being in the textile industry I have seen thousands of jobs move off shore. It is due to labor unions, it's due to corporate "greed" and most importantly, it's due to the consumer wanting the lowest price for an item.

I worked for Vanity Fair in Jackson and Atmore and watched 1000 jobs go offshore just with those two facilities. And I know about 5,000 were lost through VF overall. But since leaving Alabama in 1996, I've seen that four auto plants have opened or planned to open which will bring better jobs. Granted there is a relocation of the jobs, but if you want to work, you have to go where the work is. And these are foreign owned manufacturers.

I believe corporations will discover what business is cost effective to handle in the US and what is better moved off shore.

I'd like to see the stats on "new" jobs versus jobs that moved offshore. Most reports only give one or the other.

[AUBoggs 0]

I'm not an economist so I can't argue this case. But I admit to being natually skeptical. I hope the IT world and others don't end up in the same casket as the textile industry. :unsure:

One of the things you have to remember about manufacturing problems in the U.S. is that in many case we have caused our own dispair. Where it not for labor unions placing undue requirements on domestic companies (Pushing up labor costs, benefits, strikes, etc.) many of the industries who are no longer competitive on a global scale would still be thriving. If you want to start blaming someone for loss of jobs to outsourcing, the Dems ought to look inward to the labor unions as one of the major causes.

Don't give the consumer a free pass on this issue. For years they have wanted to pay less for the products they use. If a $10 coffee maker breaks, throw it out and buy a new one. Corporate America has been listening to the consumer as well as the mass retailer who all want to pay less for the products. Unfortunately, many corporations are run by sales and marketing people whose only response to lower revenue is to outsource the production rather than look at concepts such as Lean Manufacturing and Six Sigma. When they do look at cutting costs, they've historically only considered manufacturing facilities and ignored the corporate office (SG&A).

I have lived this scenario for the last 3 years and have seen a lot of good people laid off for savings that has never materialized. My experience has been in consumer products. I’d be interested to hear from anyone in the durable goods industry as to how they are doing.