Tuesday, November 22, 2011

About The "Oursourcing Our Jobs" Argument

From the WSJ:


U.S.-based multinational corporations added 1.5 million workers to their payrolls in Asia and the Pacific region during the 2000s, and 477,500 workers in Latin America, while cutting payrolls at home by 864,000, the Commerce Department reported.

The faster growth abroad was concentrated in emerging markets, such as China, Brazil, India and Eastern Europe, according to economists Kevin Barefoot and Raymond Mataloni, of the U.S. Commerce Department.

"Judging by the destination of sales by affiliates in those countries," the economists wrote in a recent survey, "the goal of the U.S. multinational corporations' expanded production was to primarily sell to local customers rather than to reduce their labor costs for goods and services destined for sale in the U.S., Western Europe and other high-income countries."


This is a a point that needs to be stressed when we're talking about the "outsourced" jobs.  In reality, there are many regions of the world that are growing at far more impressive rates than the US.  In addition, these are new markets with an emerging middle class.  That means is simply makes more sense to locate the factories and manufacturing facilities in these countries to sell to that market.