July 26, 2012
Our nation’s unemployment rate is an important focus for the upcoming Presidential election. It’s also been a potent campaign tool, as both parties have accused the other of “outsourcing” and “sending jobs overseas.”
“Outsourcing” continues to make headlines. But an important question goes unaddressed: what are its real consequences?
According to The Heritage Foundation’s Amy Payne, outsourcing opponents fail to understand “the reality of jobs in America, and the ways to bring even more jobs to the home front.”
There are a lot of myths about outsourced jobs, particularly in the manufacturing sector. The truth is that the U.S. actually leads the world in manufacturing, producing 21 percent of global manufactured products. And several big manufacturers are building new plants in the U.S., including BMW and Airbus, creating more manufacturing jobs.
In fact, Payne reports, outsourcing benefits the U.S. as international firms locate operations here: “the total value of foreign investment in the United States exceeds the value of U.S. investments in other countries by more than $4 trillion. Foreign-owned multinational corporations employ 5.5 million people in the United States.”
On C-SPAN recently, Heritage’s Bryan Riley pointed out the facts on investment:
If the goal is to reduce unemployment, policymakers should focus on problems like red tape that discourage job creation. The U.S. regulatory burden continue to increase, making businesses more expensive and more difficult to operate.
Excessive federal spending and the resulting budget deficit continue to be a problem. Foreign investors spent more than $400 billion on U.S. Treasury securities in 2011. This is another way to say that the government borrowed more than $400 billion from foreign investors. Those dollars could have been invested otherwise in the private sector of the U.S. economy or spent on U.S. exports.
Do you think that outsourcing is bad for U.S. economic recovery?