Thomas Sowell

 Jobs have become a big issue in this election year -- which means that it is optimistic to expect a rational discussion.

 Nothing is discussed more irrationally than "outsourcing." It is obviously completely misleading to discuss how many jobs American companies are sending to other countries without even mentioning how many jobs foreign countries are outsourcing to Americans.

 Yet those who are making the most noise about outsourcing seldom say a word about the in-sourcing of jobs from other countries. But it is the net balance that matters.

 Maybe those statistics are hard to get. But you certainly won't get them if you are not even looking for them and avoid even mentioning them.

 Official statistics published last March in the Survey of Current Business showed an increase of 2.8 million jobs outsourced by American-owned multinational corporations during a quarter of a century ending in 2001. Over that same span of time, there was an increase of 4.7 million jobs outsourced to Americans by foreign-owned multinational corporations.

 These numbers go back and forth over time.  But they don't even exist in the rhetoric of those denouncing outsourcing.

 Any laws passed to stop the outsourcing of American jobs to other countries are almost certain to bring laws in other countries to stop the outsourcing of jobs to Americans.

 We had something like that during the Great Depression of the 1930s, when international trade restrictions were imposed in order to save jobs during a period of record unemployment. Countries around the world did the same thing, with the net result of a sharp reduction of international trade and a needless prolonging of the depression.

 Many policies designed to "save jobs" have effects that are the opposite of their intentions. Germany has some of the strongest job protection laws in the world -- and double-digit unemployment rates are common in Germany.

 Job protection laws add to the cost of labor. These laws may save the jobs of those who already have jobs but the passage of time brings new young job applicants into the labor market and the high cost of labor means that employers have incentives to get their work done by substituting machines for workers or by shifting to producing products that require less labor.

 Countries in the European Union as a whole have stronger job protection laws than the United States -- and higher unemployment rates because their rate of job creation is much slower.


Thomas Sowell

Thomas Sowell is a senior fellow at the Hoover Institute and author of The Housing Boom and Bust.

Creators Syndicate



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