Would you like Fries with that?

In my part of the country, we've seen a lot of jobs leaving. They might be going to Mexico or even to another state, but it doesn't really matter because they aren't here. I've heard the economists talk about this phenomenon called "offshore outsourcing". It isn't new but it seems to be happening a lot lately. John Kerry calls it a "double-blow" to US Workers who are already affected by a poor economy. Of course, he blames all of this on President Bush. Meanwhile, there aren't too many people out there championing the cause of protectionism to force jobs to stay in the US - not even John Kerry.

It isn't just the midwest, the effects of offshore outsourcing can be felt all across the country. An article over at the American Enterprise Institute provides some facts about offshore outsourcing:

No one knows how many jobs may be affected. The most widely publicized estimate is that as many as 3.3 million jobs over fifteen years may be vulnerable to outsourcing abroad.
For individuals or groups of workers affected, the need to find new work often entails a difficult adjustment.

Some commentators have expressed concerns that outsourcing may have contributed to the weak growth of jobs in the labor market during the recovery from the recession. February employment data, for example, showed job gains that continued to be disappointingly small.

Wage premiums for workers in the U.S. with college level training and skill training beyond the high school level are still quite high: going to college or getting technical training will continue to have a high payoff for U.S. workers for the foreseeable future.

Economists say offshore outsourcing has little impact on the overall unemployment rate and the practice helps the US to stay globally competitive. It's estimated that about 500,000 jobs have moved overseas. In a pool of workers that numbers 130 million people, it isn't a real huge amount - unless you happen to be one of those without a job.

Companies see the potential savings from not having to pay workers as much in wages and benefits as well as lower manufacturing costs, but there's a downside too. A recent Infoworld article cites some problems for companies that move offshore including; cultural factors that inhibit effective communication with workers, poor available infrastructure, higher training costs, costs associated with layoffs in the US, and the logistical difficulty of running a company thousands of miles away.

At the very bottom of all of this outsourcing sits the American consumer. The fact is that we like stuff cheap. When we shop, we look for the best deal and frequently the best deal is manufactured someplace else. Go to Wal-Mart. The place is jammed with people looking for a bargain.

Economists say the jobs that leave help to make the US more competitive, "The workers released from (outsourced jobs) will go on to develop the next big thing." [Source] I guess that's easy to say if you have a job. Proponents of outsourcing say,

If jobs making blue jeans and toys disappear overseas, other jobs will pop up - jobs in transportation or in industries that produce things the new economy needs. This places a burden on displaced workers. They will need the courage to retrain and financial assistance while they do it.

The Bureau of Labor statistics says that by 2006, for every two people leaving the work force, only one person will be coming into the work force. They estimate that by 2008, we're going to have 10 million unfilled jobs in this country. [Source]

It may be true that we'll have a whole lot of jobs by then, but what kind of jobs will be left? An article in the Washington Post titled, Maybe We Could All Deliver Pizza... imagines a world where only low level service jobs exist,

To hear the pessimists tell it, "Snow Crash" is right around the corner. You don't know "Snow Crash"? It was a turn-of-the-21st-century cyberpunk novel by Neal Stephenson, who foresaw a nightmarish future in which the "Invisible Hand has taken all those historical inequities and smeared them out into a broad global layer of what a Pakistani brick-maker would consider to be prosperity." And what the inexorable forces of comparative advantage thus revealed was that the U.S. economy would evolve to the point where Americans excelled at only four things: "music, movies, microcode (software), high-speed pizza delivery." Well, maybe we should scratch the microcode, since software companies have been outsourcing programming jobs to Asia at an accelerating pace.

The future doesn't look too bright for those without a college degree or certain technical skills. It seems the world has left them in the dust.

There aren't any easy answers to the "problem" of a global economy. It isn't enough to say we'll reap better jobs if we send other jobs overseas. It isn't enough to simply tell someone who's worked on an assembly line for 20 years that they're going to have to learn how to program a computer. Forcing companies to stay in the US isn't going to help either. Higher prices and lower competition will also spell layoffs - probably at a much higher level than they are now.

Government protectionism isn't going to solve the problem. The only thing likely to make a dent in the problem of offshore outsourcing is something that I call, "Patriotic Consumerism". In other words, we have to be willing to pay a little more for some things. We have to be willing to insist that our products are clearly labeled, "Made in the USA". I seriously doubt Americans will be willing to take such actions. We need to figure out how to deal with this global economy.

Until then, the words of a Bruce Springsteen song are likely to ring true for many, "Foreman says these jobs are going boys and they ain't coming back to my hometown."