Importing affluence: the economics offshoring.

• Author: Moore, Adrian
• Position: Citings - Outsourcing - Brief Article

DEMOCRATS AND Republicans are now engaged in a partisan Three Stooges slap fight over who is more outraged by offshore outsourcing. Wasn't it just a few months ago that both parties were trying to outdo each other in their support for free trade?

"Offshore outsourcing" (or offshoring) is the fashionable term for the recent uptick in service jobs contracted to firms in India, China, and other developing nations. Consultants who help companies arrange offshore outsourcing agreements predict it could affect up to 3.3 million jobs by 2015. Take away the marketing hype, and it could still easily be 2 million.

Lost in the concern about offshoring is the fact that the money companies save by sending rote work overseas is invested in more creative jobs here in the U.S., a point made by a recent Institute for International Economics study (downloadable at www.iie.com/publications/ papers/kirkegaard0204.pdf). Analyzing Bureau of Labor Statistics data and...