TITLE

Missed Target

AUTHOR(S)
Risen, Clay
PUB. DATE
February 2004
SOURCE
New Republic;2/2/2004, Vol. 230 Issue 3, p10
SOURCE TYPE
Periodical
DOC. TYPE
Article
ABSTRACT
This article offers a look at offshoring--contracting out jobs overseas. These days, everyone's afraid of offshore outsourcing. But, like the fears that surrounded NAFTA, those around offshoring are mostly baseless. In fact, the greatest threat from outsourcing is that its opponents will use it to force a new wave of protectionism. Even if there were a short-term loss of jobs, the losses would likely have a more muted effect on the economy than the factory flight of the 1980s and '90s. According to the McKinsey Global Institute, for every dollar a U.S. company spends on offshoring to India, the U.S. economy gains $1.14, thanks to a number of factors. The USA Jobs Protection Act, introduced by Senator Chris Dodd and Representative Nancy Johnson, would prevent U.S. companies from hiring foreign workers when American workers are available for the same job. If companies were somehow prevented from shipping jobs offshore, they would likely turn to other methods of reducing labor costs, such as technological upgrades--a process that has resulted in job loss since the birth of capitalism. One approach is to require companies to purchase "outsourcing insurance," which would cover a portion of displaced employees' salaries for a fixed period of time in the event their jobs are outsourced. one of the U.S. economy's greatest strengths is its ability to redeploy workers quickly without dramatic cuts in their wages.
ACCESSION #
12038110

 

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