Unless we, as a Country, decide to “go Luddite.” Contrary to claims by Unions and other pro-labor groups, “offshoring” is not the obvious and primary cause of job loss in the U.S; productivity improvements and shifting business dynamics are (among other things). This chart, from the Atlanta Fed proves the Unions/labor wrong, rather conclusively:
In the 10-year period from 1998-2008, we saw 1.9 million manufacturing job “losses” domestically, while only 242,800 such jobs were “created” abroad by U.S. multinational firms (i.e. this ignores multinational firms based in other countries). Many groups – and let’s be honest, all of us at one point or another – have blamed services companies for off-shoring the majority of their customer service and administrative/operations, but again, the above chart shows this is largely a myth. Of 335,000 jobs “lost” in financial institutions (many of them operations/administration/service jobs), only 13,400 were “created” in other countries.
Some skeptics may look at the “Other Industries” line and question why only 234,200 jobs were “created” in the U.S. while over 1.6 million were “created” abroad. Unfortunately for such skeptics, this is easily explained (emphasis mine):
Sixty-nine percent of the foreign employment growth by U.S. multinationals from 1999 to 2008 was in the “other industries” category, and 87 percent of that growth was in three types of industries: retail trade; administration, support, and waste management; and accommodation of food services. Some fraction of these jobs, no doubt, reflect “offshoring” in the usual sense. But it is also true that these are types of industries that are more likely than many others to represent production for local (or domestic) demand as opposed to production for export to the United States.
We certainly don’t present this information as a definitive answer to the question about the role of offshoring in the slow U.S. jobs recovery. But if you forced us to choose between global or domestic factors as the place to look for solutions as we struggle with persistent underperformance in U.S. labor markets, we’d choose the latter.
In other words, all the American companies that’ve expanded into Asia and South America have hired ALOT of local workers, they have not, at least not anywhere close to the degree alleged by labor groups, took our jobs…