Free Trade: Still Not Destroying Jobs

by on February 21, 2007

Over at my other blog, Brian Moore points out this article that looks back of the great off-shoring debate of three years ago:

Then-candidate John Kerry issued a statement denouncing what he called “Benedict Arnold CEOs” who shipped U.S. jobs overseas. The airwaves and cables fairly hummed with angry talk about offshoring.

And what happened next? Nothing.

Nothing, that is, like the massive outflow of jobs that many feared. Employment growth, which had been notably slow after the 2001 recession, picked up in the United States. (We’ve gained more than five million jobs since early 2004.) Recruiters who specialize in information-technology workers say they have more openings than they can fill…

Most economists who’ve looked at the issue rate the long-run economic impact of offshoring as either (1) minimal, or (2) positive. Using overseas workers to save money or boost productivity generally results in better or cheaper services, which in turn leads to more competition, more innovation, and growth.

But you don’t have to take my word for it. Listen to Scott Kirwin, who made a return appearance in December to Wired magazine. Things have changed. He shut down his anti-offshoring Web site in 2006 and has since found himself a better job in the software business. “I don’t view outsourcing as the big threat it was,” he told the magazine. “In the end, America may be stronger for it.”

I wonder if any of the pundits who excoriated Greg Mankiw in 2004 are ready to apologize yet.

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