Guest columnist
Outsourcing: What goes around, comes around

By Bill Center
Special to The Times

Bill Center

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It's easy to understand why American workers are afraid of losing their jobs. It's happening all around them. The potential consequences — from loss of health care to homelessness — can be catastrophic.

It's increasingly difficult to land a new job with comparable pay and benefits. No amount of retraining is apt to turn a 55-year-old forklift operator into an entry-level computer programmer able to compete with an equally motivated "20-something."

Experience isn't much of an asset in today's job market, either. Young, unemployed computer-school dropouts eagerly snap up available positions for lower pay and fewer benefits.

What's going on here, and what should we do about it?

Our fears are rational. Each year, between 20 million and 30 million American jobs disappear forever as products become obsolete and firms merge or go out of business. Economists call this "creative destruction."

The good news is that even during our so-called "jobless recovery," we're replacing those lost jobs with new ones. During the boom-boom 1990s, we not only replaced lost jobs, we created an astounding 17.5 million new jobs, resulting in high demand for experienced workers. Today, that seems like ancient history.

It's true, many "new economy" jobs are in the service sector. But service jobs are more than fast food, housekeeping and sales. They include engineering, financial services, education, medicine, biomedical research and other new-technology jobs that pay, on average, more than the disappearing jobs.

Understandably, much attention of late has focused on outsourcing of U.S. jobs. Interestingly, the most dire projections show just over one-half million positions yearly moving overseas. That amounts to between 2 and 3 percent of annual jobs lost.

Trying to slow or halt outsourcing won't fix the problem. In fact, it would surely make things worse.

Trade — including jobs — is a two-way street. Foreign corporations have already moved more than 6.5 million jobs into the U.S., including many high-tech and manufacturing jobs, and the current rate of inflow actually exceeds the outflow. There's a new BMW plant in South Carolina, Nissan plants in Mississippi and Texas, and Toyota plants in California.

American workers clearly can compete. According to Consumer Reports, the "Japanese" cars built here in the U.S. are the best-quality vehicles on the road.

Recent attempts to restrict government from contracting with firms that outsource ignore the fact that U.S. firms — employing American workers — do a huge amount of business for foreign governments. America's workers would be the losers in any tit-for-tat retaliation.

The global marketplace is highly competitive. U.S. businesses must compete or go out of business. For many enterprises, that means sourcing some work overseas where competitors already take full advantage of a low-cost global work force. Staying competitive saves and even creates American jobs.

There's no easy answer. Simply keeping jobs here in the U.S. won't work, even if American consumers develop a sudden fondness for products "Made in the USA." Paying more for some items means there's less to spend on other goods and services resulting in fewer jobs for everyone.

The current dynamism of our economy is not temporary. We urgently need systems that truly support America's workers as we strive to cope with change. That means supporting job creation, lifetime work skills and transition assistance.

Top priority must go to educating our work force for the knowledge-based jobs of the future and providing lifelong learning skills to facilitate significant career changes. It's difficult to envision a bright economic future for the one-out-of-three students in our state who doesn't complete high school.

We need greatly expanded access to universities and technical and professional schools. Investing in our research universities is also a proven powerful spur to job creation.

We need progressive tax policies that encourage entrepreneurship, hiring and on-the-job training.

We must find a way to provide all Americans with health care that isn't tied to having a job.

We should strengthen federal unemployment benefits and include incentives for an early return to work.

If we fail to adequately prepare America's workers for the harsh realities of our dynamic global economy and take appropriate steps to moderate adverse impacts, who can blame them if they cry out for protection?

Bill Center is president of the Washington Council on International Trade, a Seattle-based trade policy organization, www.wcit.org