Jobs, Trade, Sourcing, and the Future of the American Workforce
(Released April 2004)
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Foreword
As the debate over trade, jobs, and the sourcing of work overseas has unfolded, we are struck by how infrequently solid facts have been brought into the discussion. The result is a debate that has generated more heat than light.
The following points need to be made more apparent in discussions over this issue:
- Increases in productivity, the recent economic downturn, domestic business impediments, and continued uncertainty are the primary reasons for recent job losses and the slow pace of hiring—not the movement of work offshore.
- Even with job losses in manufacturing and some service occupations, more Americans are working today than at any time in history. More than a half million payroll jobs have been created so far this year. The nation's employment machine is fundamentally strong, and trade is generating tremendous net benefits for the American people.
- Even the experts don't know precisely how many U.S. jobs have been or will be sourced overseas. Yet under any estimate or forecast, these jobs amount to a small fraction of our nation's 138 million workforce.
- More white-collar office work is shipped from other countries to the United States than our country ships overseas. When it comes to trade in services, "insourcing" beats "outsourcing" by nearly $60 billion annually.
- Media reports and political rhetoric aside, the nation's knowledge workers have not lost significant job opportunities to foreign competitors. The unemployment rate among Americans with a four-year college degree is just 2.9%.
- The recent extension of worldwide sourcing from manufacturing to white-collar IT jobs does not threaten America's technological leadership—yet our serious slippage in education and broadband application does.
- By the year 2010, we will not have a shortage of jobs, but rather a shortage of workers. We must expand the pool of available workers through education, training, immigration, and flexible workplaces in order to generate sufficient economic growth and the necessary tax base to support the coming avalanche of retirees.
- To create jobs, it is critical that America remains open to the worldwide economy—where 95% of our potential customers live. Isolationist measures designed to restrict trade and punish companies for sourcing must be defeated. We should, instead, open markets and enforce trade agreements; improve the skills of our workforce and expand the labor pool; modernize our transportation, energy, and technology infrastructure; and reduce legal, regulatory, tax, and health care costs.
In our view, a key shortcoming in the current policymaking process is the hastiness to make judgments and decisions in isolation. In fact, all of these issues are connected. They are part of the same equation and must be addressed on that basis.
From the continued threat of terrorism to the growth of global competition, our nation faces many external challenges. Yet America's greatest tests will come not from the outside world but from within. Will we preserve our economic freedom and our spirit of risk taking and enterprise, which set us apart from all other nations? Or will we build walls around our country and put bureaucrats in charge of our economy because we are afraid to compete?
The U.S. Chamber is prepared to work with every business, worker, policymaker, and citizen who believes as we do that Americans are not afraid to compete, and that with the right policies we can outproduce any country in the world. The naysayers who wrote off the American economy in the 1970s and 1980s are at it again. They were wrong then—and they are wrong now.
Thomas J. Donohue
President & CEO
U.S. Chamber of Commerce
Download and read the full report (PDF, 292KB) | Adobe Acrobat Reader Required