Outsourcing jobs to foreign countries seems to be increasingly
common. But at a time with high unemployment rates in the United
States, is it smart to be sending jobs overseas?
President Bush’s top economist, N. Gregory Mankiw, told
the Washington Post last week that outsourcing was “probably
a plus for the economy in the long run.”
Mankiw supports the theory of comparative advantage, which
argues that countries should specialize in the products they can
produce the cheapest and import everything else. Mankiw told
Congress “if a thing or a service could be produced more
cheaply abroad, then Americans (would be) better off importing it
than producing it at home,” according to The Economist.
It is true that this method has been shown to be successful in
the long run, but how does that help our economy right now?
Millions of Americans are currently looking for jobs. How does
outsourcing jobs help these people right now?
This is the flaw in Mankiw’s plan. By sending more jobs
overseas, the economy may be impacted even more in the short run.
The economy needs time to rebound. It is too early to be aggressive
with a still-faltering economy.
Despite the fact that the business-funded Conference
Board’s research shows that the economy has been improving
since last spring, Ken Goldstein, the group’s economist, has
warned that bumps in the road can still hinder the rebounding
economy, according to the Washington Post.
“Consumer confidence could falter if job and wage growth
don’t continue to strengthen,” Goldstein said.
It has been argued that outsourcing will not change anything
because it “accounts for a tiny proportion of the jobs
constantly being created and destroyed within America’s
economy,” according to the Economist. But tell that to the
American radiologist, to use Mankiw’s example, who just lost
her job to someone in India.
Outsourcing may be good in the long run, but taking these jobs
away hurts an already weakened economy right now.
Buhrer writes for The Rocky Mountain Collegian of Colorado
State University.