On Friday (April 2), the Bureau of Labor Statistics will release the employment report for March. Most economists are expecting a solid increase in jobs. But they have expected significant increases for months, only to be proven wrong when the official data were released. Another weak jobs number undoubtedly will raise pressure on Congress and the Bush Administration to take action on the issue of outsourcing, which many unemployed workers, especially in information technology (IT), blame for their misfortune.
One reason why the outsourcing issue has gotten so much attention is that it plays to deeply held fears about foreigners that have been part of the American political landscape since the Know-Nothing movement of the 1840s. As Holman Jenkins of the Wall Street Journal recently put it, "The current griping over 'outsourcing' seems almost a species of psychological dysfunction, one that blames foreigners over any explanation that doesn't."
The Bush Administration has been very slow to recognize the political threat from the outsourcing issue. Indeed, it played right into it with an ill-timed proposal to allow illegal Mexican workers in the U.S. to have "guest worker" status allowing them to remain here legally. While I think this is a defensible policy, it suffers from appearing to be motivated more by politics than a serious concern for illegal immigration. It looks as if its sole purpose is to win Hispanic votes.
President Bush also shot himself in the foot when he promised to create a high level post to promote manufacturing, where the greatest job loss has occurred. Then it turned out that this "manufacturing czar" position involved nothing more than renaming an existing assistant secretary position at the Commerce Department. Finally, its vetting process blundered by naming to the post a businessman, Tony Raimondo, who has outsourced jobs to China from his own business. The appointment was quickly rescinded when John Kerry's campaign brought this fact to the media's attention.
The Bush Administration has done little to address the outsourcing issue other than muzzle Council of Economic Advisers Chairman Greg Mankiw for daring to suggest that it is an inevitable process. But others are starting pick up the slack. A new study by the American Electronics Association offers a balanced perspective.
Bruce Bartlett is a former senior fellow with the National Center for Policy Analysis of Dallas, Texas. Bartlett is a prolific author, having published over 900 articles in national publications, and prominent magazines and published four books, including Reaganomics: Supply-Side Economics in Action.
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