Since the 1960s, when the U.S. began experiencing a decline in automotive manufacturing jobs to Japan, the outsourcing of jobs to offshore companies has remained a contentious issue. The debate resurfaced in recent years with the outsourcing of technical roles, becoming a prominent topic during the 2004 presidential campaign. However, obtaining concrete facts and statistics regarding the actual impact of outsourcing on the American economy proves challenging. Discussions surrounding outsourcing’s effect on the economy are often dominated by rhetoric rather than substantiated evidence.
A significant disparity exists between the perceptions of average Americans and the views of economists and other experts. For instance, a Zogby International Poll revealed that 71% of Americans believe outsourcing harms the economy. Conversely, when The Wall Street Journal posed the same question to economists, only 15% felt that outsourcing had a negative impact.
Opinions on outsourcing tend to be divided more by economic status than by political affiliation. While some Republicans in Congress believe outsourcing negatively affects the economy and advocate for legislation to curb it, conservative think tanks like the Heritage Foundation, along with Republicans connected to big business, argue that the threat of outsourcing has been exaggerated.
Liberals also hold differing views on outsourcing. The Democratic party, traditionally associated with labor in the United States, saw a Democratic president, Bill Clinton, champion the North American Free Trade Agreement (NAFTA) through Congress. Most experts agree that this treaty facilitated the current outsourcing trend.
Arguments for and against outsourcing abound. The Heritage Foundation contends that despite outsourcing, American employment numbers are higher than ever, with new jobs continuously created to offset those lost overseas. Conversely, anti-outsourcing advocates point to declining gross wages, arguing that the jobs being created are primarily low-level service sector positions, failing to replace the high-tech jobs lost.
Citing the Organization for International Investment, the Heritage Foundation further argues that for every job outsourced, another is “insourced” to the United States from another country, often at a higher rate of pay than the job lost. However, anti-outsourcing advocates dispute the accuracy of these figures.
Ultimately, a definitive answer regarding the effects of outsourcing on the United States economy remains elusive until the federal government conducts thorough and unbiased research.