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Study Claims Offshoring Doesn't Cost US Jobs
SwashbucklingCowboy writes "Infoworld has an article up about a survey by the Software & Information Industry Association claiming that offshoring doesn't cost American jobs. The article quotes the executive director of the SIIA as saying, '[Offshoring] was used almost entirely as a form of expansion, not as a replacement.' Well, if a job is created elsewhere that could have been created in the US, isn't that a job lost?"
The idea that the economy is a zero-sum affair is so abundantly contradicted by readily available evidence that I find it almost amusing that it holds such sway over people.
No, a job created elsewhere instead of here does not automatically mean that it "costs" us a job here. Jobs aren't a resource that is mined from the Earth, jobs are created by the economy. If that overseas person does well enough, it may "create" two jobs here.
It's not even right to speak of jobs being "created"; a more appropriate verb might be funded. There's a "job" that involves you being my personal punchmonkey, but there's no way we're going to come to mutually beneficial agreement about that "job", so it isn't funded.
But the flip side holds; the net impact could be more than one job "destroyed". It's not zero-sum.
The whole thing is very complicated, because even if off-shoring a developer creates/funds five jobs over here, it may be the case that none of them are development work. Or one off-shored developer may well create three more development jobs, but not in Silicon Valley. (No, you don't get to say all three of those jobs are cleaning up after the off-shore guy; if off-shoring is a net negative value, the economy will eventually cut off the off-shoring, even if that means driving a particularly stubborn company that refuses to see it as a negative value bankrupt.)
But one thing it's not is "zero-sum".
(Even if you don't "like" capitalism, it's vital to come to understand what capital is and why capital produces more capital. Communism, and to a lesser extent socialism, can be seen as starting with the assumption the economy is a zero-sum game, and they end up creating a self-fulfilling prophecy on that front as in their zeal to make sure capital/wealth is evenly distributed, they destroy the mechanisms of capital/wealth creation. Actually, they end up with a negative-sum game. I'm not defending any particular instantiation of capitalism at this time, I'm just saying you damn well need to understand why it does what it does if you want to understand how economies work.)
I remember awhile back reading an article about how IBM was opening a new center in India and "creating" 1000 new jobs, and IN A COMPLETELY UNRELATED MOVE closing a center in the U.S., where they would be cutting 1000 jobs.
The report did correctly state at least one factor in outsourcing: "Seventy-three percent of respondents report a positive impact on profits".
Competition makes everyone better off - just look at the progress for the last century and it becomes abundantly clear.
The problem is that for me to be "competative" to a multi-national corporation as a worker I must forgo the progress of the last century and my lifetime.
I'm more "competitive" when I demand lower wages, lower my standard of living, lower my need for healthcare, lower my need for a clean environment, lower my expectations to talk with someone who actually knows english, etc, etc.
Unfortunately, there is no right answer here. Outsourcing looks great on paper for the bottom line. It seems to be failing for customer support, helpdesks, and call centers because even if you get a hold of a person that speaks good english and can help you with your problem, at least here in the USA, I still feel cheated for some reason, and the liklihood that you get a person that can speak good english and help you with your problem is unlikely at best.
Manufacturing simply makes sense for many people. It means cheaper goods for us as consumers and it moves a ton of the nastyness of manufacturing out of our back yard. None of the pollution, or any of that jazz.
I personally have more issues with the hiring of illegals here in the us than outsourcing.