Exporting Jobs: A Sign of Strength

For years, liberals and and their labor union allies have generated many myths about American jobs being exported overseas, and have created a sense of fear in millions of hard—working people.  In fact, the truth is much more complex. 

Rejecting the pessimistic labor union cries over outsourcing and offshoring, the Economist has a much needed explanation of how America's long term decline in manufacturing jobs is a sign of strength: 

Shrinking employment in any sector sounds like bad news. It isn't. Manufacturing jobs disappear because economies are healthy, not sick.

The decline of manufacturing in rich countries is a more complex story than the piles of Chinese—made goods in shops suggest. Manufacturing output continues to expand in most developed countries¡ªin America, by almost 4% a year on average since 1991. Despite the rise in Chinese exports, America is still the world's biggest manufacturer, producing about twice as much, measured by value, as China.

The continued growth in manufacturing output shows that the fall in jobs has not been caused by mass substitution of Chinese goods for locally made ones.

It has happened because rich—world companies have replaced workers with new technology to boost productivity and shifted production from labour—intensive products such as textiles to higher—tech, higher value—added, sectors such as pharmaceuticals. Within firms, low—skilled jobs have moved offshore. Higher—value R&D, design and marketing have stayed at home.

Brian J. Schwarz   10 01 05

For years, liberals and and their labor union allies have generated many myths about American jobs being exported overseas, and have created a sense of fear in millions of hard—working people.  In fact, the truth is much more complex. 

Rejecting the pessimistic labor union cries over outsourcing and offshoring, the Economist has a much needed explanation of how America's long term decline in manufacturing jobs is a sign of strength: 

Shrinking employment in any sector sounds like bad news. It isn't. Manufacturing jobs disappear because economies are healthy, not sick.

The decline of manufacturing in rich countries is a more complex story than the piles of Chinese—made goods in shops suggest. Manufacturing output continues to expand in most developed countries¡ªin America, by almost 4% a year on average since 1991. Despite the rise in Chinese exports, America is still the world's biggest manufacturer, producing about twice as much, measured by value, as China.

The continued growth in manufacturing output shows that the fall in jobs has not been caused by mass substitution of Chinese goods for locally made ones.

It has happened because rich—world companies have replaced workers with new technology to boost productivity and shifted production from labour—intensive products such as textiles to higher—tech, higher value—added, sectors such as pharmaceuticals. Within firms, low—skilled jobs have moved offshore. Higher—value R&D, design and marketing have stayed at home.

Brian J. Schwarz   10 01 05