Dan Drezner points to this press release and this executive summary as more support for his conviction that offshore outsourcing is an unalloyed good for the U. S. economy. Read the comments to his post–they’re interesting.
I don’t think this study means what he thinks it means.
- The job creation rate they cite of 90,000 jobs is below the level required to offset the increase in the size of the workforce. It will need to be at least twice as large just to keep up. This suggests that either the unemployment rate will rise or the number of “discouraged workers” will rise or both.
- The rising real income figures they cite are average income figures. The median real income is either stagnant or falling (according to the BLS). This just means that some people are making more money. It’s not good news for the American people as a whole.
In the absence of other forces for net job creation it doesn’t sound like the people laid off over the last couple of years are going to find work any time soon.
One of the main characteristics of science is that it is predictive. We’ve had predictions of rising rates of job creation for quite a few quarters now. All of these predictions have been supported by good science but none of them have actually come to pass. The science has actually boiled down to the idea that “it’s always happened that way before”. What if something new and different is at work today?
Offshore outsourcing is a fact of life and, as I’ve said before, I don’t think we should panic or introduce protectionist measures. But we should face the issue squarely and encourage more investment in the U. S..
