Friday, June 11, 2004


The Bureau of Labor Statistics reported yesterday that 4,633 saw their jobs shipped overseas in the first quarter of 2004.

As I have noted elsewhere, offshoring of service jobs does seem to be a relatively small phenomenon at present (though the mass layoff statistics cited here, as well as other statistics on trade-related job losses and imports of services do a miserable job of capturing the real situation on the ground), even my grandmother can see that it is growing rapidly and could be very, very big in a short few years. (In contrast, offshoring of manufacturing jobs is a big phenomenon).

There are many reasons to believe, measurement errors aside, that the BLS's Mass Layoff Statistics (which the Bush administration sought to axe last year, incidentally) understate the true number of job losses due to offshore outsourcing. But these job losses are really just the tip of the iceberg for their impact on the US job market, due to the job multiplier effect and to the threat effect. The latter, is probably the biggest impact right now...people are truly scared that their job (or jobs they would potentially seek, all things equal) may be sent overseas; they're afraid to leave bad jobs, afraid to demand better compensation, afraid to exercise their rights to freely associate in labor unions, etc. Businesses can use this threat of offshoring to keep their workers in line and keep wages low.

So while globamaniacs like Dan Drezner lament Lou Dobbs coverage of "Exporting America," Lou's saber rattling can actually be seen as serving a real purpose for corporate interests: keeping American workers cowering, sacred that their job may be next.


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