Both presidential candidates accuse the other of "Outsourcing." It is a term with a negative meaning, implying the perpetrator is un-American, but we have no outsourcing problem.
What is often called "outsourcing" is offshoring business functions, including building facilities and employing workers in other countries. Many say. "sending jobs overseas" harms America. They miss the important reality of U.S. jobs and ways to bring jobs here.
- The U.S. leads the world in manufacturing. Yes, you read correctly. We produce 21% of global manufactured products. China is 15%. The National Association of Manufacturers says, "manufacturing supports an estimated 17 million jobs in the U.S. - about one in six private sector jobs."
- Big manufacturers are building new plants here. BMW is adding 300 new South Carolina jobs and Airbus will add 1,000 in Alabama. These are right-to-work states, meaning workers need not join unions.
- Multinational corporations employ more Americans. U.S.-based multinational corporations employ 22.9 million in the U.S. This is more than twice the people they employ in China, Mexico, and all other countries combined.
- There is no "giant sucking sound" of jobs and money fleeing the U.S. The U.S. Bureau of Economic Analysis says foreign investment in the U.S. exceed the value of U.S. investments elsewhere by more than $4 trillion. Foreign-owned multinationals employ 5.5 million people in the U.S.
- "Insourced" business is a tremendous boon for the U.S. "Insourced" jobs (jobs brought to the U.S. by foreign-based companies) are nearly 5% of private-sector employment. These companies buy $1.8+ trillion in goods and services from local suppliers.
To Boost U.S. Jobs:
With 8.2% unemployment, we need more jobs. Many steps can make locating in the U.S. more attractive. The Index of Economic Freedom (The Heritage Foundation and The Wall Street Journal) show U.S. competitive disadvantages.
Hong Kong, No. 1 in the Index, has an economy growing at 7%. U.S. GDP growth, in this quarter (2012), was 1.9%.
Here are reasons Hong Kong is #1 and the U.S. is #10. Hong Kong's top corporate tax rate is 16.5%, the U.S. rate is 35%. Hong Kong's trade rules are the most competitive and efficient, with a zero tariff rate. Eegulations are "highly supportive of business efficiency."
Runaway U.S. regulations grow daily, so doing business is vastly more expensive and difficult. The government holds back the economy with regulation and nonstop deficit spending. Heritage's Bryan Riley explains:
Excessive federal spending and resulting deficits are a problem. Foreign investors spent $400+ billion on U.S. Treasury securities in 2011. This is how the government borrowed $400+ billion from foreign investors. We could have invested in the U.S. private sector or spent that on U.S. exports.
Concern about outsourcing is misplaced, but there are many ways the the U.S. can attract more jobs. More economic freedom will spur growth in the economy, bringing greater prosperity and new enterprises to our shores. These are some of the many reasons we have been outsourcing for 11 years.