PolicyGuy

Tuesday, May 24, 2005


Offshoring and Government Contracting: Easy to Posture.
It's easy to demagogue the issue of employment, whether the subject is the effects of regulation, unions, foreign competition, or these days, offshoring. The Reason Public Policy Institute concludes that offshoring is not the enemy of economic health.

Research by the Government Accountability Office, the California State Auditor, and the Florida Governor?s Center for Efficient Government, and even the Communication Workers of America all find virtually no government contracting work goes offshore. Yet we have seen over 200 bills introduced to ban or limit offshore work in government contracts. Even worse, it has tended to cost state and local governments that have terminated contracts with offshore work more than $100,000 per year per job ?saved.? Legislators could offer all sorts of generous severance and retraining packages and still come out with cost savings for taxpayers.

Offshoring creates more jobs than are lost. The savings from outsourcing don?t get burned in a bonfire, they are reinvested into making jobs here in the US. In fact the best available analysis says that every $1 sent offshore in outsourcing creates about $1.12 here at home.


RPPI's overview of the issue is available (PDF format) in Offshoring and Public Fear: Assessing the Real Threat to Jobs

"Justice Louis D. Brandeis'?s metaphor of the states as "laboratories" for policy experiments ... had almost nothing to do with federalism and everything to do with his commitment to scientific socialism. .... To this day, it continues to inhibit a truly experimental, federalist politics." -- Michael S. Greve

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