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June 01, 2009

Limiting 'off-shoring'

Losing domestic jobs to foreign countries is one of the major concerns of workers. Will this trend simply continue and more jobs be lost to overseas competitors? Listen

Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:

"I think it will. Right now, the estimate is that there are 11 million jobs that have been moved by U.S. companies to foreign countries. So we define those as off-shore jobs. But, number one, you have to put that in perspective. We have 130 million domestic jobs. Now in terms of the future, yes, that 11 million will likely increase. One estimate is it will go up each year by maybe 200,000 to 300,000. However, there are limits. Many jobs can't be 'off-shored.' In fact, the same study that predicts off-shore jobs going up by 200,000 to 300,000 per year claims that only 11 percent of service jobs can be off-shored. Furthermore, as foreign countries develop, what we'll likely see is their wages will increase. And domestic demand for their workers will also increase. That means that they'll be spending more of their time making products for their domestic consumption. Also, the higher wages of their workers won't make those workers as lucrative for holding what used to be U.S. jobs. So I think that the bottom line here is it's always difficult and sometimes dangerous to extrapolate in the future from what's happened in the past, and there are several forces at work that will not end off-shoring, but will not make it as lucrative as it has been."

Posted by Dave at June 1, 2009 08:00 AM