Student Projects:Outsourcing PPF:Misc Sources

David Dorwin: I created this page to contain miscellaneous sources, citations, and facts that we think should be in the paper but either don't own the related section or aren't sure how to fit it in.

As you use a piece of information, move it to the Used section so that we know that it has already been included.

Unused

Intro?

• Offshoring and the Global Economy
  • "...many are starting to wonder how the U.S. economy will create good, high-paying jobs in the future."
  • "Some experts have expressed concern that offshoring could lead to “hollowing-out” of the American middle class, and others worry about an economy primarily comprised of a smaller upper tier of highly-educated, mobile workers (a “creative class”) and a larger pool of low-wage workers who would provide services that cannot be offshored (a “services class”). New evidence suggests this could be happening."
  • "...belief that the success of the U.S. economy in the coming years hinges on the ability to create high-quality jobs at home and expand the middle class."
  • "...if the root causes of offshoring are left unaddressed, the middle class will continue to erode."
  • "...must be wary of policies that promise to protect workers from the downside of globalization but that in practice inhibit the dynamism and flexibility of the economy and end up costing jobs and prosperity. Yet, at the same time, they must always ensure that U.S. policies are not affirmatively disadvantaging American workers in the global marketplace and that if offshoring does occur, it is driven by legitimate economic forces, not practices that contradict the American values of hard work and shared prosperity."

Motivation for our paper

David Dorwin: I'm thinking that these would be good in an introduction, but currently we only have a small abstract. Otherwise, they could be scattered in the Present and Future sections.

• The strong productivity and employment climate in the US in the last century has been shaped by creative policies, such as the GI bill after World War II and innovative research and development policies in the 1990s. (americanprogress.org) Therefore, it is plausible, and perhaps expected, that strong and imaginative policies can overcome the issues raised by globalization and overseas outsourcing.
• It is not just those that have lost their jobs to offshore outsourcing that are suffering as a result. Offshoring has contributed to stagnant wages and declining benefits for those who still have jobs. - http://www.americanprogress.org/site/pp.asp?c=biJRJ8OVF&b=81390
• In the long term, Americans will avoid occupations that they consider likely to be sent overseas. This can be just as damaging to the economy as the original act. - http://www.americanprogress.org/site/pp.asp?c=biJRJ8OVF&b=81390
  • There is historical precedence for this in the manufacturing sector. Job losses compounded with the belief that policymakers would allow it to continue led people to seek careers in other sectors. The result was that companies often found themselves searching for skilled manufacturing workers. (americanprogress.org) Thus, the jobs that were available could not be filled, leading to additional problems for the economy and more reasons to send the work offshore.
  • A similar result could occur in the IT sector. If people choose to seek other careers, innovation will slow, negatively impacting the US economy, and the pool of qualified native US workers will shrink. As a result, American IT companies may have to look overseas to find qualified workers, either through offshore workers or bringing foreign workers to the US, such as through H-1B visas. Because IT jobs often see some of the greatest productivity growth, their exodus would damage the US economy, and therefore US living standards. -http://www.americanprogress.org/site/pp.asp?c=biJRJ8OVF&b=81390
  • As Christian E. Weller, a senior economist at the Center for American Progress, states, “When Americans have faith that enough jobs will exist in a given field, they will train for them.” - http://www.americanprogress.org/site/pp.asp?c=biJRJ8OVF&b=81390
  • It is possible that statements by high tech corporations that there are not enough US workers to fill high-tech positions become self-fulfilling prophecies. Major US companies have repeatedly made such claims, such as those made to the Senate in 1998 (\cite{visa98}), as they request higher caps on H-1B visas. High school and college students that hear this may decide not to get a degree in those high tech fields because the jobs are likely to be offshored or given to foreign workers.

Economics

David Dorwin: For whoever is doing economics...

• The conventional wisdom of economics predicts that trade will raise the national income in the US while leaving most workers poorer. In addition to harming directly displaced workers, trade also harms workers who are subsequently competing against each other for the remaining jobs. - http://www.americanprogress.org/site/pp.asp?c=biJRJ8OVF&b=38079
• In addition to companies, workers whose jobs are insulated from competition with displaced labor also benefit from trade. Service sector trade could significantly shrink the size of this group, thus shrinking the number of beneficiaries of trade - http://www.americanprogress.org/site/pp.asp?c=biJRJ8OVF&b=38079

Statistics

• Jobs lost to outsourcing and projections

Visas

L-1

I hope we are going to cover L-1 visas. There appear to be a lot of loopholes and proposed policy changes.

• There is some good information on L-1s and abuses in the Congressional Testimony of FAIR's Executive Director available here (large PDF of entire hearing) orhere (small HTML). At the end of his testimony, he also describes several existing proposals for reform.

Recommendations?

• new support system for America's workers
• national healthcare
• increase investment in R&D
• reform and improve education