Kerry and the myth of outsourcing
Another day goes by and yet another story on the plight ofAmerican jobs going overseas is printed. The only reason why thisis not going away is because John Kerry has made it a central themeof his platform, and Republicans have done a terrible job attackingit. If you want to see a prime example of a harmless issue spuninto a false, misleading campaign scare tactic, look no furtherthan Kerry’s stance on outsourcing.
According to a recent Democratic poll, 43 percent of Americansare afraid of outsourcing. It’s absurd though to think thathalf of America should fear jobs going overseas. These are probablythe same mix of people that feared the invention of the assemblyline and even the computer.
I guess they don’t know that history shows innovation tobe great for economic development. Where would manufacturerproductivity be today if automobiles were still assembled by amyriad of factory workers? I’ll tell you where it would be— on the sticker price of that new BMW mom and dad justbought you.
The sector supposedly hit the hardest by outsourcing isinformation technology. However, a new report from the CommerceDepartment shows that the U.S. runs a trade surplus in IT services.Another report from Global Insight states that only 104,000 IT jobswere lost last year to outsourcing. A whopping 2.8 percent of totalIT jobs in the United States. Perhaps the most important finding ofthe study is that the money saved from outsourcing does not gostraight to the company’s bottom line but to improvements intechnology and other resources contributing to output.
What does this equal? One word: jobs. The Global Insight studyfound that GDP was $34 billion higher last year because ofoutsourcing, which created 90,000 new jobs. The areas benefitingmost from outsourcing were construction, transportation andutilities, education and health services and wholesale trade.
Kerry would have you believe that if he were not elected thenall of corporate America would be run from a call center in India.He scares the blue-collar Americans in Ohio and Michigan intothinking that their families are going to be out on the streetbegging for food if Bush is re-elected. How untrue.
Kerry’s solution to the so-called problem is to penalizethose companies that outsource in the form of higher corporatetaxes. This sounds good to the laid off, unionized, factory workerwho can’t find another job because he hasn’t retrainedhimself in 15 years. But the truth is his proposal only serves tohurt those companies already doubly taxed by our pork-barrelgovernment. More corporate taxes equals less money for corporationswhich leads to less money for employment, which results in —you got it — less jobs!
The argument ties into Kerry’s class warfare rant, and itis getting old. His proposal is so popular among blue-collarworkers because it makes them feel good. They actually think Kerrycan keep them sitting on the Ford assembly line until retirement.For these people, no change is good. They need to understand thatchange in the form of outsourcing is better.
Contrary to the Democratic scare campaign, outsourcing is goodfor America. Take my advice by tuning out the scare campaign andturning off John Kerry completely. If you can’t pull yourselfaway from him entirely, then at least don’t buy into hisoutsourcing myth.
Swede Hanson is a MBA student at the Cox School of Businessand host of the campus political talk show “Truth BeTold!” on KPNI – SMU Radio. He may be reached [email protected].
