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January 05, 2004

Outsourcing Revisited

Could the use of outsourcing many jobs overseas actually be a positive economic event for the country as a whole? That's the argument of columnist Bruce Bartlett, who cites a study by the McKinsey Global Institute that claims that for every $1 outsourced by the United States, the country gains $1.12 to $1.14 from shifting labor to more productive activities and the creation of foreign subsidiaries that bring in additional funds. I don't have the grounding in economics to assess the study (plus I couldn't find it on their web site), but I'd love to see a blogger with an economics background take a look at it and see if the excitement about outsourcing really could be doing more harm than good. (Are you listening, Jane?)

Posted at January 5, 2004 06:57 AM

Andrew Olmsted

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Comments

Haven't read the original article but it strikes me as bullshit. The assumption is that people losing jobs in this country have equally or higher paying jobs readily available to them. If only this were true. We are moving from high paying manufacturing jobs to a society trying to make its way using low paying service jobs. I am very concerned that if the outsourcing of midlevel and higher jobs continues we will no longer be the economic engine that drives the world economy. The net GDP of the world may stay the same but the distribution of money and opportunity wills shift drastically and we will see potentially disastrous results in this country.

Posted by: dad at January 7, 2004 03:25 PM