Outsourcing and Elections

Date: Thursday, June 26, 2003 3:42 PM

JOB DESTRUCTION NEWSLETTER

www.ZaZona.com

This author asked the question: "These jobs don't disappear, after all:
they go overseas, to people who probably need them more. Isn't that a
good thing?"

The question assumes that workers overseas needs jobs more than
Americans. The answer to his question is a very obvious: NO, IT'S NOT
SUCH A GOOD THING TO SEND JOBS OVERSEAS BECAUSE AMERICANS NEED JOBS
JUST AS MUCH.

http://www.techcentralstation.com/1051/techwrapper.jsp?PID=1051-250&CID=1051-062503A

Outsourcing and Elections

By Glenn Harlan Reynolds 06/25/2003

It's no secret that more and more technology jobs are being outsourced
to Third World countries where salaries, and other costs, are lower.
And, as Hiawatha Bray reports in The Boston Globe, it's starting to
generate some pushback:

For years many engineers, computer programmers, and other high-tech
workers have complained that US companies have used special visas,
called H-1B and L-1 visas, to import workers from India and other
countries. These workers allegedly supplant native-born Americans,
increasing unemployment among highly educated US workers.

But since the technology slump of the past three years, companies have
reduced their use of H-1B and L-1 visas. Instead, many firms have set
up operations in other countries to handle everything from telephone
call centers to computer programming tasks. Countries like India offer
thousands of well-educated workers at wages far lower than those
offered in the United States.

Unemployed software engineer Steven Paris, 47, says that work visas and
outsourcing are why he's been out of a job since October, despite
bachelor's and master's degrees in computer science. ''I think we need
to curb the H-1B and L-1 program,'' Paris said, ''and I think we're
going to have to look at tariffs and some kind of protectionism'' to
limit outsourcing. Paris agreed that foreign competition was healthy
for the economy, but said that the outsourcing trend has gone too far.

With all sympathy to Mr. Paris, people usually conclude that foreign
competition has "gone too far" when it threatens their job. (And if we
could import foreign politicians to compete with domestic ones, you'd
see tariffs and protectionism that would make Napoleon's Continental
System look like free trade.) Nonetheless, this sort of competition can
certainly cause dislocations, both political and economic. (For more,
here's a report that outsourcing to India increased by 25% last year,
and a somewhat sunnier view of the situation from the Hindustan Times.)

But it also causes moral dislocations, and in various parts of the
political spectrum. Bray's story reports on an "alliance of liberal
activist groups and labor unions" that is opposing the outsourcing of
jobs. And while it's easy to see why labor unions might oppose this
sort of thing, it's hard for me to see it as a liberal issue, really.
After all, aren't liberals supposed to be for the redistribution of
wealth from the better-off to the less-well-off? These jobs don't
disappear, after all: they go overseas, to people who probably need
them more. Isn't that a good thing? Or, at least, to me it's not
obviously worse than, say, taxing corporations in a way that causes
them to cut jobs, and then using the money to pay for foreign aid. In
fact, it's probably better, overall, since it builds up a corps of
educated professionals in other countries, instead of fostering the
sort of dependency (and corruption) that usually results from foreign
aid.

It's true that corporations do this in order to maintain profits -- but
they usually are pressed to do that by downward pressure on prices,
brought about by competition, which means that they're not earning a
windfall out of the deal, and the savings are passed on to consumers,
another group that liberals are supposed to like. So it's odd that
opposition to outsourcing would attract interest from "liberal" groups,
though it clearly has.

On the other hand, conservatives are supposed to like free markets, and
some of them are upset by this sort of thing, too. Phyllis Schlafly
doesn't like it. And Pat Buchanan and Ross Perot have been calling for
more protectionism for over a decade now, though they might argue that
they are more interested in nationalism than fairness in the abstract,
something that liberals (at least outside the labor community) find it
harder to argue.

Could this outsourcing produce a major political backlash? Sure, it
could. Will it? That's less clear. Right now the issue is owned by
relative extremes on the left and right, making it unlikely to produce
much movement one way or the other. It's possible that a Democratic
candidate -- Dick Gephardt, perhaps? -- might raise this issue, and
might make some inroads among Information Technology workers, who have
traditionally leaned libertarian/Republican. But big enough inroads to
turn the election? Probably not. Things might become more unpredictable
if a third-party candidate raises the issue in a big way. Ralph Nader
might do so, or some as-yet-unheralded candidate might come out of the
right to steal votes from George Bush. That doesn't seem likely now --
but then again, in 1991, neither did a Clinton Presidency, which was
made possible in no small part by protectionist third-party candidate
Ross Perot.

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