Job Losses and Trade: A Reality Check
During the last campaign Senator Kerry used the fear of outsourcing to try and gain political advantage. The problem is that Kerry really was engaging in hysterical rhetoric. Consider the great Clinton Jobs Machine of the 1990s. Over 22 million jobs were created. But how many jobs were lost? Try over 300 million. How can this be? Simple, more than 300 million jobs were added to the economy for a net gain in jobs. Job creation and destruction are continuous processes. According to Brad DeLong, 360,000 claims for unemployment insurance per week is consistent with a stable unemployment rate. Some researchers have suggested that as many as 3.3 million jobs will move overseas between 2000 and 2015. That is 220,000 jobs a year. Statistically it is insignificant as that annual number breaks down to a weekly number of a bit over 4,000 jobs. When there are 360,000 first time unemployment claims for a stable unemployment rate 4,000 jobs is literally nothing. Passing any laws to address this “problem” is a waste of time, resources, and could very well end up costing more jobs in the long run. Bottomline: offshoring is not the big bogey man it has been made out to be.
Update: Boifromtroy notes that most outsourcing stays within the U.S.