Tuesday, February 14, 2006

Outsourcing and Immigrants

Reading should provoke responses. If what you are reading doesn't provoke a response from you you probably aren't reading the right things. Or you aren't thinking enough.
I just got the latest issue of the Freeman, published by the Foundation for Economic Education. www.fee.org
Daniel Griswaold from the Cato Institute writes in an article titled "The Trade Deficit Lowers Our Living Standard? It Just Ain't So!" that "there is no shortage of jobs in the American Economy; indeed, worry is growing of a worker shortage."
That's odd, the media has given me the impression that outsourcing has left everyone from textiles workers to computer programmers jobless. And the influx of Latin American workers have been stealing what little jobs there are left here.
The Numbers: (though statistics do lie).
# of jobs lost annually to imports and outsourcing: 400,000
# of employed persons in the economy:138 million.
# of jobs that disappear permanently each year: 15 million
# of new jobs created each year: 16-17 million
"So, jobs lost to imports and foreign outsourcing represent only 3 percent of annual job losses in the US each year."
Griswold goes on to demonstrate that productivity is up 50% from a decade ago, and real compensation is up 20% per hour of work in that same time frame.
And in my experience all of this is true.
I worked at a tutoring agency last semester, working with middle and high school students in math. I was told that I was accepted as one out of 20 applicants, but that the other applicants were horribly unqualified for the job. The job paid nearly $20 an hour. My boss was charching $45 for a 45 minute session, paying me less than 40% of what she brought in... which was more than fair, and the topic for another conversation.

The point is that it is hard to find good help these days, and the reason for that is because all the good help is already employed!

Some people are losing jobs, and I hope they find new work soon. But to assume that we are all going to lose our jobs to outsourcing is ridiculous.
JN

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