Jobs Overseas Research Articles

CHEMICAL MAKERS SEEK RELIEF

A TOP CHEMICAL INDUSTRY official urged Congress on Nov. 17 to lift the generation-old moratorium on natural gas production along the U.S.'s outer continental shelf, warning that the consequences of insufficient supplies will soon become painfully clear to all U.S. consumers. If U.S. natural gas prices do not return to their historically affordable levels, American Chemistry Council President Jack I Gerard told a panel of the House Resources Committee, the nation's key manufacturing industries will accelerate the transfer of operations and jobs overseas, where the cost of energy is much cheaper. Paying the highest natural gas prices in the world puts Americabased manufacturing at a severe competitive disadvantage, and this is a largely self-inflicted wound, Gerard testified. What I can't predict is how Congress will respond to this crisis. There has never been a better or more critical time to pass natural gas supply legislation. The committee is considering ...

Exporting America: Why Corporate Greed Is Shipping American Jobs Overseas/The Lexus and the Olive TreeExporting America: Why Corporate Greed Is Shipping American Jobs Overseas By DobbsLou. New York, NY: Warner Books, 2004. 196 pages, hard cover, $19.95The Lexus and the Olive Tree By FriedmanThomas L.. New York, NY: Anchor Bocks, 2000. 499 pages, soft cover, $15.00

This article presents reviews of the books “Exporting America: Why Corporate Greed Is Shipping American Jobs Overseas,” By Lou Dobbs and “The Lexus and the Olive Tree,” by Thomas L. Friedman.

Job Loss: Bridging the Research and Policy Discussion

Although the economy is finally adding net new jobs beyond what is necessary to keep pace with the growth of the working age population, this current economic recovery is unprecedented in terms of its anemic job growth. There are a variety of culprits cited for this sluggish job creation--offshoring (moving jobs overseas), productivity growth, geopolitical insecurity, digestion of investments in information and communication technology, rising oil prices, and falling labor supply. However, few of these explanations are likely to explain much of this sluggish job market on their own. For example, rising health care costs have been cited as a possible reason why employers might be more reluctant to hire new workers. But when we look at trends in total employee compensation, we do not see the kinds of increases that would explain such slow job creation. Since the work force is aging, we might expect that this would reduce the size of the work force as a greater share of workers reach retirement age. However, the labor force participation rate of workers over the age of 55 actually rose about 4 percentage points from 2000 to 2004. So for the moment, the slow pace of job creation does not seem to be related to an aging work force. Another possible explanation for slow job growth is the phenomenon of offshoring. Manufacturing jobs have moved overseas during the past two decades and this trend continues, especially now in the apparel sector with the elimination of the Multifiber Arrangement in January 2005. (1) What has changed, however, is that service jobs, once thought immune to the offshoring threat, are now going abroad as well. This shift has important policy implications for the extension of trade adjustment assistance to service sector workers, as Lori Kletzer and Howard Rosen discussed in their paper for this conference (also see Kletzer, 2005, in this issue). While I think that the impact of offshoring of service sector jobs will become increasingly important over time, I do not think it is sufficient to explain a major part of our current anemic job growth. A more likely explanation for the lackluster job growth is some combination of the good news of sustained productivity growth (although what lies behind this is still fertile ground for research) and the dampening effect of geopolitical concerns, including the price of oil. However, before we conclude that concerns about the structure of the U.S. labor market have been misplaced, I would like to argue that there are quite sensible and rational reasons why people should be concerned about our policy responses in the context of trade and technological change and their impact on workers. Skill levels in the work force So what is the problem? Both trade and technological change put pressure on our economy to raise the skill level of the work force. But the supply of skilled workers is just not keeping pace with the changes in demand due to technology and trade. Managers live with this reality everyday. For example, the 2001 American Academy of Management Association Survey on Workplace Testing reports that one in three job applicants tested by employers lacked the basic skills necessary to perform the jobs they sought in 2000. This skill crisis was in place during the boom of the 1990s, it was here during the recession of 2001, and it is still here today. It threatens to be a significant drag on our ability to remain competitive in the global economy through the production of innovative high-skill-content goods. It also undermines our ability to move workers from contracting sectors of our economy to expanding ones. But fixing this crisis requires us to understand the skill quality both of workers entering the labor market and of those already in the job market. In terms of the skills of new entrants, we see that in spite of a significant increase in the wage premium paid to those with a college degree, there has been a slowdown in the rate of growth in the United States for college enrollment and completion. …

Comment and Discussion

Comment and Discussion Lawrence Mishel General Discussion References AFL-CIO. 2004. "The Bush Record on Shipping Jobs Overseas." AFL-CIO Issue Brief. Washington (August). Agrawal, Vivek, and Diana Farrell. 2003. "Who Wins in Offshoring." McKinsey Quarterly, Special Edition: 36-41. Bloom, Harold, Saul Schwartz, Susanna Lui-Gurr, and Suk-Won Lee. 1999. Testing a Re-employment Incentive for Displaced Workers. Ottawa: Social Research and Demonstration Corporation. Bishop John H., and Suk Kang. 1991. "Applying for Entitlements: Employers and the Targeted Jobs Tax Credit." Journal of Public Policy Analysis and Management 10 (1): 24-45. Brainard, Lael. 1991. "Protecting Losers: Optimal Diversification, Insurance, and Trade Policy." Working Paper 3773. Cambridge, Mass.: National Bureau of Economic Research. Brainard, Lael, and Robert E. Litan. 2004. "'Offshoring' Service Jobs: Bane or Boon and What to Do?" Brookings Policy Brief 132 (April). Burtless, Gary, and Robert Litan. 2001. Globaphobia Revisited: Open Trade and Its Critics. Brookings. Committee for Economic Development. 2001. From Protest to Progress: Addressing Labor and Environmental Conditions through Freer Trade. Washington: Library of Congress. Congressional Budget Office. 2004. Family Income of Unemployment Insurance Recipients (March). Davidson, Carl, and Stephen A. Woodbury. 1995. "Wage-Rate Subsidies for Dislocated Workers." Upjohn Institute Staff Working Paper 95-31. Kalamazoo, Mich: W. E. Upjohn Institute for Employment Research (January). Department of Labor, Employment and Training Administration. "Trade Adjustment Assistance (TAA) and Alternative Trade Adjustment Assistance (ATAA) Services and Benefits." www.doleta.gov/tradeact/benefits.cfm [January 12, 2006]. Dickert-Conlin, Stacy, and Douglas Holtz-Eakin. 1999. "Employee-Based versus Employer-Based Subsidies to Low-Wage Workers: A Public Finance Perspective." [End Page 454] JCPR Working Paper 79. Joint Center for Poverty Research, Northwestern University/ University of Chicago. Dickert, Stacy, Scott Hauser, and John Karl Scholz. 1995. "The Earned Income Tax Credit and Transfer Programs: A Study of Labor Market and Program Participation." In Tax Policy and the Economy, vol. 9, edited by James M. Poterba. MIT Press. Eissa, Nada, and Hilary Hoynes. 1998. "The Earned Income Tax Credit and the Labor Supply of Married Couples." Working Paper W6856. Cambridge, Mass.: National Bureau of Economic Research. Eissa, Nada, and Jeffrey B. Liebman. 1996. "Labor Supply Response to the Earned Income Tax Credit." Quarterly Journal of Economics 111 (2): 605-37. Greenspan, Alan. 2004. Transcript from Federal Document Clearing House, as distributed by Bloomberg news service, of the question and answer session of the testimony of Alan Greenspan, Chairman of the Board of Governors of the Federal Reserve System, before the Joint Economic Committee, April 21. Groshen, Erica L., and Simon Potter. 2003. "Has Structural Change Contributed to a Jobless Recovery?" Current Issues in Economics and Finance 9 (8). Federal Reserve Bank of New York. Katz, Lawrence. 1996. "Wage Subsidies for the Disadvantaged." Working Paper 5679. Cambridge, Mass.: National Bureau of Economic Research (July). Kletzer, Lori G., and Robert E. Litan. 2001. "A Prescription for Worker Anxiety." Brookings Policy Brief 73 (March). Kletzer, Lori G., and Howard Rosen. 2005. "Easing the Adjustment Burden on U.S. Workers." In The United States and the World Economy: Foreign Policy for the Next Decade, edited by C. F. Bergsten. Washington: Institute for International Economics. Levy, Frank, and Richard J. Murnane. 2004. The New Division of Labor: How Computers Are Creating the Next Job Market. Princeton University Press. Liebman, Jeffrey B. 1993. "The Impact of the Earned Income Tax Credit on Incentives and Income Distribution." In Tax Policy and the Economy, vol. 12, edited by James M. Poterba. MIT Press. Meyers, Bruce, and Dan Rosenbaum. 1997. "Welfare, the EITC, and the Labor Supply of Single Mothers." Working Paper. Northwestern University (November). Mishel, Lawrence, Jared Bernstein, and Sylvia Allegretto. 2005. The State of Working America, 2004/2005. Ithaca, N.Y.: ILR Press (imprint of Cornell University Press). Organization for Economic Cooperation and Development (OECD). 1994. The OECD Jobs Study: Facts, Analysis, Strategies. Paris. O'Leary, Christopher J., and Randall W. Eberts. 2004. "Personal Reemployment Accounts: Simulations for Planning Implementation." Occasional Paper 2004-08. W. E. Upjohn Institute for Employment Research, U.S. Department of Labor ETA (May). Perloff, Jeffrey M., and Michael L. Wachter. 1979. "The New Jobs Tax Credit: An Evaluation of the 1977-78 Wage Subsidy Program." American Economic Review 69...

Going global in R&D.

Economics and politics are making offshoring an increasingly attractive option for biobusinesses

The Outsourcing Bogeyman

WHEN presidential election year coincides with an uncertain economy, campaigning politicians invariably invoke an international economic issue as dire threat the well-being of Americans. Speechwriters denounce the chosen scapegoat, the media provides blanket coverage of the alleged threat, and legislators scurry introduce supposed remedies. The cause of this year's commotion is offshore outsourcing-the alleged migration of American jobs overseas. The depth of alarm was strikingly illustrated by the firestorm of reaction recent testimony by N. Gregory Mankiw, the head of President George W. Bush's Council of Economic Advisers. No economist really disputed Mankiw's observation that is just new way of doing international trade, which makes it a good thing. But in the political arena, Mankiw's comments sparked furor on both sides of the aisle. Democratic presidential candidate John Kerry accused the Bush administration of wanting to export more of our jobs overseas, and Senate Minority Leader Tom Daschle quipped, If this is the administration's position, I think they owe an apology every worker in America. Speaker of the House Dennis Hastert, meanwhile, warned that can be problem for American workers and the American economy. Critics charge that the information revolution (especially the Internet) has accelerated the decimation of U.S. manufacturing and facilitated the outsourcing of service-sector jobs once considered safe, from backroom call centers high-level software programming.

German Studies and Minority Communities

I would like to put forth my views on the future of German Studies in low-income and minority communities, and its expected impact on those communities. Ask some randomly chosen AfricanAmerican students whether they study German, and you will almost certainly get a resounding No! in response. Ask them why not, and they will probably stare at you in bewildered astonishment. You might as well ask them why their families do not raise pink flamingoes in the back yard. Over the past thirty years, in Chicago, I have been advocating for greater enrollment of minority and low-income students in higher education, and assisting them in that direction. My endeavors in this area have been made primarily through the federally-funded TRIO Programs, which of ford disadvantaged students pre-college educational opportunities and collegelevel academic support. In addition, five years ago I began developing new German language programs. Foreign language acquisition adds an invaluable life skill to a student's repertoire, which in the case of the disadvantaged student is already too meager. I chose the German language specifically as the primary language of study for my students because, of the modern languages, German can best prepare students to participate in a global economy. Acquisition of the German language enhances the preparation of students who wish to pursue business and scientific careers. Initially, I faced a number of barriers to establishing these programs. First, many of the teachers, parents, and students could see no reason to learn any foreign language. Second, there were no longer any German language programs in those public schools that had predominantly low-income or minority populations. Finally, in most African-American communities, Germans were perceived as being all white, racists, and proponents of Nazism. The situation has not changed noticeably in the intervening five years, and these barriers still represent the challenges facing German Studies in the United States today. If the education profession can overcome these obstacles, German Studies will increase dramatically in American schools as we move into this new millennium, particularly in the minority communities. Based upon my experiences as an advocate for educational equality for low-income and minority students, I believe that this increase in German Studies has the potential to level the educational playing field. It would open many educational and economic opportunities to disadvantaged students. Expanding German Studies would in turn invigorate the social studies curriculum. Such global education is a must in the classroom and the community in this era. This concern is particularly critical for minority and low-income communities. American companies continue to shift jobs overseas and/or merge with foreign companies. The merger of the Chrysler Corporation and Daimler-Benz of Germany is but one of many examples. German Studies has the potential to make a broad cultural impact on the African-American community It is perhaps not widely known, but there are a significant number of Germans who are of African-American descent. While there is no accurate count of these individuals, it is estimated that there are over 200,000 AfroGermans, and, in addition, a significant number of Africans who are either citizens or permanent residents of Germany This invites a large body of serious study which would be of interest to African-Americans as well as to other groups. …

The Kind of Revolution We Need

Many of us realize how drastically the political and social climate has changed in the last five years. Most of the gains won by labor and the civil rights movement are being rolled back. Strikebreaking is the order of the day. The corporations are getting concessions from workers, and the unions are powerless to resist because today's capitalism no longer needs labor as it did in the past, before robots and before advanced methods of transportation and communication made it possible to export jobs overseas. Affirmative action has been all but abolished, welfare is being cut, cheap jobs are the only ones available. Women are under attack, anti-abortion groups dominate the news, sexism is on the rise, and homosexuals are being made the scapegoats because people are looking for easy answers to complex questions. Even social security is no longer secure. In fact, every gain that we have come to consider our god-given right but which was a result of hard struggle is being taken away. Yet we stand helpless and divided, more often than not blaming one another, while the counter-revolutionary forces exploit our differences to dehumanize us further by encouraging us to fight over crumbs.This article can also be found at the Monthly Review website, where most recent articles are published in full.Click here to purchase a PDF version of this article at the Monthly Review website.

Tax change could shift R&D jobs overseas

Tax change could shift R&D jobs overseas