First, the bad news: Some of us will lose a job this year. It's inevitable. After all, in the last 10 years, the country has lost more than 7 million jobs each quarter on average.
But now the good news: That won't matter to most, because there
are actually more jobs available than ever before. Almost everyone
who loses a job can get another one, often at a higher salary.
The federal government's household survey shows more than 139
million Americans are working today -- the highest number ever
recorded. Plus, the unemployment rate is holding steady at a
relatively low 5.5 percent, even as our population increases.
All this matters because it's election season, and over the next
three months we're going to be hearing a lot about the dangers of
"outsourcing,"
the process by which American jobs are supposedly being sent to
other nations -- countries that refuse to compete with us on a
"level playing field."
The reality, of course, is that the playing field is tipped our
way. The United States has the best educated, most productive, most
adaptive workforce in the world. Because of that, and our support
of free trade, "outsourcing" is actually far overshadowed by
something we hear much less about, "insourcing." That's the process
by which foreign firms hire workers here, including Honda workers
in Ohio and BMW employees in South Carolina.
A recent study by the Organization for International
Investment found that there are 6.4 million jobs in the U.S. in
which the employer is a foreign company. The study also showed
insourced jobs are growing at an annual rate of 5.5 percent, while
manufacturing outsourced jobs grew at an annual rate of only 1.5
percent. More companies are moving jobs here than are shipping them
elsewhere.
And even when it does happen, outsourcing isn't necessarily a dead
end. A separate study by the firm Global Insight showed that
the economic activity that followed the outsourcing of
some information technology jobs led to the net creation of more
than 90,000 net new jobs in 2003. It's expected to create 317,000
net new jobs by 2008.
Of course, even with the job gains, we'll probably still experience
a loss of manufacturing jobs. For example, U.S. manufacturing
employment declined by 11 percent between 1995 and 2002. However,
America wasn't alone.
A study by Alliance Capital Management found that rising
productivity is driving down manufacturing employment worldwide.
The typical country lost 11 percent of its factory jobs, and some
countries suffered even more than we did. China, which some accuse
of stealing our manufacturing jobs, actually lost 15 percent of its
manufacturing jobs over the same period.
The international economy is becoming more productive and more
innovative, which means all of us are paying less for such things as computers, cell phones and
coffee. And, even though we've lost jobs, our manufacturing sector
is more efficient than ever. Manufacturing output actually
increased by 38 percent over the last 10 years.
Political leaders from both sides of the aisle recognize the
benefits of this process.
Sen. Mitch McConnell, R-Ky., recently noted that insourced jobs are often higher paying than
those that are outsourced, and he pointed out that every state
enjoys the benefits of insourcing. For example, political swing
states Michigan and Ohio have 244,200 and 242,200 insourced jobs,
respectively.
Meanwhile, as far back as 1997, the Clinton administration
advocated outsourcing some government jobs as a way to increase
efficiency, cut costs and save tax dollars.
Politicians love to highlight individual examples to prove their
case, so we're sure to hear plenty of anecdotes this summer about
workers who've lost their jobs because of outsourcing.
But in an economy of our size, it's important to focus on the big
picture. The numbers prove our economy is growing and creating good
jobs for an ever-increasing population. The good news outweighs the
bad -- by far.
Ed Feulner is the president of The Heritage Foundation (heritage.org), a Washington-based public policy research institute.
