The Impact of Offshore Outsourcing

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The Impact of Offshore Outsourcing on Developed
Countries
Jens Christiansen and Jim Burke February 20, 2006
CS/Econ/IR/Politics 125 Global Challenges
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Job Losses and Gains Since 1992
Quarterly data
10,000
9,000
Thousands
8,000
7,000
6,000
92
94
95
93
96
98
97
00
99
02
01
04
03
05
06
Job gains
Job losses
Source BLS
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Setting the stage for corporate offshoring, 1970
2006 the creation of the disposable
American worker
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US Economic Growth, 1949 2005 3-year average,
Rate of growth,
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US Unemployment Rate, 1949 - 2005
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Setting the stage for corporate offshoring, 1970
2006 Lowering the barrier to layoffs as a
corporate strategy

• Declining economic growth and rising
  unemployment rates
• Deregulation of industries
• Declining union bargaining power
• Growing influence of financial markets and
  financiers over corporate management
• A falling minimum wage and the rise of a low
  wage, low value workforce

Large-scale and ongoing layoffs have become an
acceptable business practice for corporations
an unfortunate necessity
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The Doubling of the Global Workforce
Richard Freeman
2000
2,930million
1980
960million
9
Full page anti-union ads in The New York Times
and The Washington Post from last Monday,
February 13th
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IMPORTS EXPORTSAS PERCENT OF GDP

• US GDP 2005 12.770 trill.
• EXPORTS .928 trill. (7.3) IMPORTS
  1.727 trill. (13.5)
• GERMAN GDP
• 2005 2.830 trill.
• EXPORTS 1.016 trill. (36)
• IMPORTS .801 trill. (28)

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Grossly Distorted Picture
United States 100
GDP per head at purchasing power parity, 2002
Household income adjusted for inequality
GDP per head adjusted for leisure (GDP per hour
worked)
from The Economist, Feb. 11, 2005