Notes on the Atrocities
Like a 100-watt radio station, broadcasting to the dozens...

Wednesday, April 07, 2004  


A few days ago, Ian Welsh left a few links to his site about the economy. For me, the religious studies guy, it's all worthy remedial reading. There was some especially nice material about outsourcing.

My confusion on the issue has been this: I understand that companies get stronger when they outsource low-skill jobs, meaning they grow more competitive at home, which leads to more, higher-skilled jobs here. But the logic breaks down when you factor in productivity gains--no need to hire new folks when you've got online tracking, say. So what gives?

Ian echoes my worries: "But the question is sustainability. The huge outflow of jobs from the US is also currently accompanied by a huge increase in US debts, by a massive current account deficit and by a plunging US dollar. What happens if and when the US can't afford to buy those services and goods that have been outsourced?"

But according to Kash, to whom Ian refers us, we're not at that vanishing point yet.

Jason Kirkegaard of the Institute for International Economics (a nonpartisan think tank devoted to careful research on current issues in international economics) made an extremely detailed examination (careful, .pdf) of the BLS’s labor statistics by industry, occupation, and state to try to identify an impact of offshore outsourcing on those occupations said to be most vulnerable. One could spend hours poring over the detailed cross-tabulations showing exactly which types of jobs have been lost in recent years. In general, the report does not turn up any evidence the offshore outsourcing is responsible for significant job losses in any particular industry or occupation....

[E]ven if we imposed a moratorium on offshore outsourcing, the job market would still remain weak because of the weak economy. We won't stop losing jobs, or gain new ones, until demand picks up in the economy, no matter how much or how little international trade the US engages in. So if you’re worried about the job market (which I am), then focus your attention on the pitiful economic management that the Bush administration has shown, and the weak economy that has persisted as a result. [Itals Kash's]

So expect lefty economists to remain skittish about protectionist language. Expect economic dimwits like me to remain skeptical of the rosy(ish) outlook, thus driving Kerry to protectionist policies that will later, apparently, slow the economy's recovery. Expect said dimwits to blame Bush.

posted by Jeff | 2:00 PM |
Blogroll and Links