We have no idea how many U. S. jobs are offshored, i.e. performed by people who are sitting in other countries performing them. None. It could be the 300,000 that is the guesstimate sometimes provided. That’s guesswork based on the belief that 60% of businesses offshore at least one department.
It’s unlikely to be less than 300,000. It could be 3,000,000. It could be 30,000,000. We really don’t know.
There are no U. S. specifically governing jobs offshored. There is no reporting requirement other than a requirement to report what you’re spending and the balance sheet requirements.
Even if the factories come back, the jobs won’t. They are gone forever.
Chinese factories are the highly automated in the world, thoroughly optimized with AI running on 5G (and some 6G) networks. Many have no workers other a few robot maintainers and programmers. Some Chinese factories operate in darkness.
That is what might come back—factories without workers.
Dave Schuler: We have no idea how many U. S. jobs are offshored
You mean delegated? Unemployment is about 4% in the United States, so most everyone who wants a job has a job. Median income is among the highest in the world. Or is this what you think the majority of Americans should be doing?
Only if you ignore people who have given up looking for jobs, those working part-time involuntarily, and those who are undermployed.
And I have no idea what the majority of Americans should be doing. What I think is that unless we control immigration of unskilled workers and protect more skilled jobs, whether from AI, offshoring, or other, there will be very few jobs that pay a decent wage left.
Dave Schuler: Only if you ignore people who have given up looking for jobs, those working part-time involuntarily, and those who are underemployed.
U6 has run about 3-4% higher during economic expansions since the 1990s. In other words, other macroeconomic trends are more important than offshoring.
April 2025: U3 = 4.2%, U6 = 7.8%.
How about underemployed? People with college degrees who would rather be using their degrees than being Uber drivers?
Dave Schuler: And I have no idea what the majority of Americans should be doing.
As economies develop, fewer people are involved in agriculture and will move into factories. As economies continue to develop, fewer people work in factories and will move into service and technology.
Any country can make conventional automobiles. Vietnam produces 200,000 cars per year. Morocco produces half a million! There’s no advantage to having a highly educated and connected American sit on an assembly line making conventional products. There are a billion other people who can do it cheaper. To survive and prosper, Americans have to make smarter cars smarter.
Dave Schuler: How about underemployed? People with college degrees who would rather be using their degrees than being Uber drivers?
It takes time for the young to develop. Some won’t prosper for a while. But have hope. The majority will find their way.
Consider that median income in the United States is among the highest in the world. That doesn’t come from manual factory work. As factories modernize they will require education to operate the advanced equipment. But manufacturing will continue to represent less and less of the productive potential of developed economies. Just look at the growth of Google and Amazon, information and retail respectively.
I see it differently. I think we are protecting some jobs and the wages for those jobs are climbing. Those we are not protecting are either being offshored or their wages are declining.
And it isn’t just young workers who are underemployed. A large percent are over 40.
So what? The United States is unique in many ways. For example, we are the only country in the world that has a 1,500 land border with a country that has a median income half its own. We’re the only country in which physicians are as highly paid as they are. No major European economy is growing the way the U. S. is. That’s just a few of the ways in which we’re different.
The point I’m making is that comparisons between the U. S. and other countries are misleading if not mistaken.
Dave Schuler: I see it differently. I think we are protecting some jobs and the wages for those jobs are climbing.
Sure, but that’s not different, rather just an aspect of the overall picture. No country can do everything. Encouraging the development of new technologies is a valid policy choice. Morocco traditionally crafted traditional artisan goods; but Morocco didn’t become the largest automobile exporter to the European Union without significant effort.
Dave Schuler: Those we are not protecting are either being offshored or their wages are declining.
Yet median income is among the highest in the world. It is certainly valid to point to dislocations and distortions in the economy. But offshoring is a natural aspect of continuing economic development.
Dave Schuler: And it isn’t just young workers who are underemployed. A large percent are over 40.
It’s hard to measure underemployment, but is generally thought to be about U6-U5, or about 3%, and has been the about the same during economic expansions since the 1990s.
There will always be some distortions in labor markets; due to friction (people don’t always want to or are able to move to find appropriate work), and due to limited information (natural ignorance). That doesn’t mean economic dislocations aren’t real or a real problem for those effected. Nor does that mean such dislocations shouldn’t be addressed to limit the damage. Indeed, limiting the damage is important for recovery and continued development.
Dave Schuler: The point I’m making is that comparisons between the U. S. and other countries are misleading if not mistaken.
You say, but don’t show.
Your claim is that offshoring is due to policy choices. Our claim is that offshoring is the natural market tendency of highly advanced economies as they move into technology and services, delegating less advanced jobs to other countries. Certainly policy choices can slow or accelerate offshoring, but the inexorable market pressure remains.
April 2025: U3 = 4.2%, U5, 5.1%, U6 = 7.8%.
Let’s try another way of explaining it. Wages in healthcare, education, and government have risen about twice as fast as those in other sectors over the last five years. Those increases constitute much of the increase in the median wage. Those sectors are all highly protected.
Numbers for underemployment by college grads are tracked. It’s lower now than it was in 2017 which is as far back as I could find with minimal effort. If you want to make the claim you ought to find some evidence. AFAICT its as least as large a problem in the EU.
Overall here, you are well below your analytical norm. The point about the US being unique is true of every other country. Despite your claim, wages in manufacturing, construction, leisure and hospitality, just to name a few have been increasing.
But back to your original point, if we cant know how many jobs are offshored then what is the point making claims about it? If your goal is to bring back jobs, then say how many jobs you think you can bring back, which ones you actually want back, what’s the right way to do it, how likely is success and how much will it cost.
https://www.statista.com/statistics/642037/share-of-recent-us-college-graduates-underemployed/
Dave Schuler: Wages in healthcare, education, and government have risen about twice as fast as those in other sectors over the last five years.
All of those are service professions requiring localized and educated workers. Because those jobs can’t be outsourced, wages tend to grow faster than other sectors. Over time, as the jobs require more skills and more specialization, the wages will continue to increase. Plus the healthcare sector is rapidly growing due to demographic aging, so that puts additional pressure on wages. Meanwhile, the United States imports lower-skilled workers (e.g. farming, construction) to fill the niches left vacant as Americans move up. That, along with high technology ventures, is exactly what is expected as a post-industrial economy develops. NVIDIA alone is worth more than $3 trillion.
Median income in dollars isn’t artificial, but represents market power in the global economy; and that means offshoring has not inhibited the broader economic growth of the United States.
Again, that doesn’t mean there aren’t distortions in the three sectors you mention that should be addressed, but there are much larger forces at work in the global economy.
steve: If your goal is to bring back jobs, then say how many jobs you think you can bring back, which ones you actually want back, what’s the right way to do it, how likely is success and how much will it cost.
Of course, there just aren’t enough workers to fill the old-fashioned factories imagined by some. You could import people from Mexico. Then again, you could build the factories in Mexico while Americans “learn to code”, which was the whole point of NAFTA.
Consider a young student just out of college. She can’t find work in her chosen profession yet, so she needs a job. She could migrate with the agricultural crops, bunking in crowded barracks, doing piece work from sunup to sundown. Or because of her language skills (English), she could be a barista at the local coffee shop close to home, while in her spare time she develops that new AI game she dreamt up.
Real wages have outgrown inflation over the last 5 years. Physician pay in that period has been lower than inflation. I cant find anything substantiating the claim about workers in education ie the teachers and professors. As has been noted many times in many places what students are actually paying for college has leveled off sine about 2012. Health care spending in general has leveled over the last 5 years. It looks like govt workers are probably making more but I cant find numbers to support the twice claim.
Steve
https://www.statista.com/statistics/1351276/wage-growth-vs-inflation-us/
In that sentence “requiring” means “legally requiring”. Not “naturally requiring”. If training and certification were naturally required, none of the licensing would be mandated. And the Pure Food and Drug Act of 1901 would not be necessary.
I DO believe that the training and certification are beneficial, at least contingently. I just think that wage growth in those sectors should be limited to be no more than the growth in the non-healthcare, non-education, non-government sectors.
BTW my information on wage growth is from the Kansas City Federal Reserve (various citations).
Dave Schuler: In that sentence “requiring” means “legally requiring”.
As for localized, it means it can’t as yet be effectively offshored to lower cost producers. As for licensing, you really don’t think doctors should be licensed? In the modern age?
Dave Schuler: I DO believe that the training and certification are beneficial, at least contingently.
Then have no idea what point you are trying to make.
As I said in the comment I do think they should be licensed but I think their wages should be regulated.
The point that I’m making is that natural and “good idea” are not synonymous. IMO when you intervene in the market you should also make efforts to offset the harms done.