U.S. better off with outsourcing, industry study says
[Of course they say that, their profits rise for every job we lose - mish]
Tuesday, March 30, 2004 8:07:36 PM
WASHINGTON (AFX) -- The U.S. economy will be stronger, with more jobs and higher wages if global outsourcing trends are allowed to continue, according to an economists' study funded by an industry group
"The benefits of free trade clearly provide a boost to the U.S. economy," said Nariman Behravesh, chief economist for Global Insights, which produced the report released Tuesday by the Information Technology Association of America. "Using offshore resources reduces costs, dampens inflation, lowers interest rates, increases spending and creates additional jobs," Behravesh said
However, the study concludes that outsourcing is responsible for about 104,000 of the 372,000 software jobs lost between 2000 and 2003 and will further reduce U.S. employment in the software industry by about 50,000 jobs by 2008
Most of the job losses in the industry since 2000 have been due to the bursting of the dot-com bubble, the recessionary impact of spending in other sectors and the huge productivity gains that allow companies to get more output out of each worker, the study concluded
Outsourcing will create many more jobs in other sectors over the next four years, the study says. Outsourcing created about 90,000 American jobs in 2003 and 317,000 total net new jobs by 2008, the study says. Overall, the economy lost 61,000 jobs in 2003
[Outsourcing created 90,000 new jobs?! and will create 317,000 by 2008?! - Gee that's 80,000 jobs a year. BFD. IF it even happens. How many potential new wage earners based on demographics will there be in the next 4 years. Where will these jobs be created? These idiots never say. They just assume they will be there - mish]
By 2008, the U.S. gross domestic product will be $124.2 billion larger with outsourcing than it would be without, according to the Global Insights/ITAA study. U.S. GDP was about $11 trillion in 2003
Earlier in the day, Federal Reserve Gov. Ben Bernanke came to similar conclusions about the value of global trade and outsourcing in a speech at Duke University. Global IT outsourcing -- in which U.S. companies buy computer services and software from overseas suppliers -- has become a hot-button issue as the U.S. economy recovers slowly from the 2001 recession
President Bush's top economic adviser, Greg Mankiw, set off a frenzied debate when he wrote that outsourcing is merely a new form of trade. Bush and other politicians of both parties distanced themselves from the tone of Mankiw's remarks, but not necessarily from the content
Agricultural, mining and manufacturing jobs have been lost to trade and "outsourcing" for centuries, but only recently have significant numbers of service and professional jobs been threatened
[How do you lose mining jobs if the mine is in your own country? - Are they talking about mines on pluto lost by plutonians to martians? or are they talking about mines on pluto owned by mars and martians did the labor before but now plutonians will do the work? mish]
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