Thankfully, those who know better are finally starting to make the case that outsourcing, far from being a detriment to American workers, is a major benefit.
 
    How? It's true that outsourcing takes some jobs and sends them overseas. But that frees up capital for the creation of new, higher value jobs--jobs that pay well, and require skills and education. The kind of jobs that all politicians insist they want, but that few understand how to get.
 
    As Federal Reserve Gov. Ben Bernanke noted Tuesday, outsourcing is responsible for maybe 2% of the 15 million jobs the economy loses each year.

But with outsourcing--and the trade that goes with it--the economy churns out about 17 million new jobs each year.
 
    Support for Bernanke's view came in a study released Tuesday by the Information Technology Association of America (ITAA).
 
    Outsourcing, it noted, helps free up money to buy better equipment, boost output and lower costs. These are all good things that lead to more jobs, not fewer.
 
Also see "Outsourcing And Drug Costs: Another Kerry Contradiction" by Merrill Matthews, Investors Business Daily - Wednesday, March 31, 2004

    Suppose you see people lining up for hours, and people willing to pay a month's salary in bribes, in order to get a $2-a-day factory job. What might you conclude? Would you guess there are higher-paying jobs around, but the people are too lazy to look for them?
 
    Here's my guess: No matter how unattractive to us that $2-a-day job is, it might be that person's best-known prospect.
 
    Columnist Nicholas Kristof recently wrote "Inviting All Democrats" in the Jan.14 New York Times documenting the plight of Cambodia's poor. In Phnom Pen, hundreds of Cambodians traipse through trash dumps scavenging for plastic bags, metal cans, bits of food and whatever else they can find to sell.
 
    Kristof says: "Nhep Chanda averages 75 cents a day for her efforts. For her, the idea of being exploited in a garment factory -- working only six days a week, inside, instead of in the broiling sun, for up to $2 a day -- is a dream."
 
Right Word?
    Many Democrat and Republican politicians, union leaders and academic elite say that paying somebody $2 a day is exploitation. They've called for actions against American companies who exploit Third World workers through low pay, use of child labor and poor working conditions.
 
    But let's examine this with an eye toward asking whether exploitation is the right word to use.
 
    Let's start off with a personal question. Suppose you're earning $1,500 a month, and I come along and offer you a job paying $3,000 a month with better working conditions. In no way do I coerce you into accepting my job offer. If you accept my job offer, then the only unambiguous conclusion is that you saw my offer as being superior to your next best alternative. When a person is offered an alternative, superior to his next best alternative, how much sense does it make to characterize it as exploitation?
 
    If Nhep Chanda, who earns 75 cents a day toiling in nasty trash dumps, is offered a factory job at $2 a day, has she been made better off or worse off?

Any reasonable person would conclude that she's better off. When one person makes another person an offer that makes that person better off, does it make sense to characterize it as exploitation?
 
    While we're at it, we might ask if anti-free trade demonstrations and other public pressures stop companies from having manufacturing facilities in places like Cambodia, paying $2 a day wages, will people like Nhep Chanda be worse off or better off? In other words, do we help people who have few miserable alternatives by destroying their best one?
 
    Former presidential aspirant Dick Gephardt pledged that if he became president he'd press the World Trade Organization to establish an international minimum wage. Union leaders and their useful idiots in the anti-globalism movement have also called for minimum wages and better working conditions for workers of multinational firms in Third World countries.
 
    Here's my question to you: Do you believe these people really care about the world's poor like Nhep Chanda? If you do, I have a fountain of youth I'd like to sell you.
 
    There might be a few ministers, college students and other uninformed people who sincerely care about the Third World poor.
 
Sense A Threat
    But the thrust of the public relations campaign against the multinationals comes from the U.S. and European union movements and some businesses who see their jobs and profits threatened. They wish to raise the cost of overseas operations in order to forestall company relocations, or as Gephardt said he wants, an international minimum wage high enough so that American workers are not competing with slave, sweatshop and child labor around the world.
 
Walter E. Williams is a professor of economics at George Mason University and a syndicated columnist.

    It is 4 a.m. at my desk in Maryland. I gulp down a vitamin and an aspirin. I have three instant messaging windows displayed on my computer screen.
 
    First window, it is 4 p.m. in Vietnam. We are trying to figure out how to send them 40 megabytes of graphics.
 
    Window No. 2: It is 2:30 p.m. in New Delhi. They are supposed to be finishing up a logo and letterhead for a customer. It is a $100 job, not a priority.
 
    Window No. 3 is my real concern. Moscow, where it is nearing lunchtime. The final release of a very complex 100,000-line database application is due tomorrow. It would have cost our client around $250,000 to do it in the U.S., with the latest technology. We did it for $45,000 (and beat out an Indian firm by $10,000).
 
    The last example illustrates a good point. The client we are rewriting this system for never would have done it for a quarter of a million dollars. The client decided to rewrite it in Russia because it was so inexpensive. Not one American job was lost doing this. It is a concept not understood by many. It's a tremendous creation of wealth, like a $200,000 gift to the American consumer.
 
    Outsourcing offshore stands firmly on three principles: the English language, the Internet and the lower cost of living almost everywhere else in the world. So there are only three ways to stop it, two of which won't happen and one that will.
 
    - First, stop people from learning English, which is not possible.
 
    - Second, restrict the Internet to national borders. I am not sure that is even possible.
 
    - Last, raise the standard of living around the world. This is currently happening and will continue to happen for many years to come.
 
    It has become a political issue, but since the government can't do anything about it, it is really a wasteful expenditure of otherwise good hot air. Telling a Russian or an Indian that he can't work for what he thinks he is worth is essentially declaring war on him, his family and his society. This is a very long-term trend.

    In 1601 the East India Co. was chartered and the English started to explore the Indian Ocean. They initially wanted to take the Spice Islands from the Dutch. Failing this, they started to colonize India. The English language would be exported there. This is why white-collar outsourcing started in India. They had at least a five-year head start, an echo from actions taken 400 years ago. But other countries are catching up.
 
    Our Russian programmers learned English reading Microsoft and Oracle documentation. They don't speak English but they read and write it quite well. There is a lot more outsourcing going on in the Philippines Islands than most people know about because of an English language heritage. A friend of mine is setting up a call center in Cyprus, of all places. They all share two things in common; they have all learned English and are all terrified of the potential of a good portion of the Chinese population doing the same.
 
    And so what does the future hold? We are already seeing people going to India for complex (and relatively inexpensive) medical procedures. Are the doctors and lawyers next? Besides actually standing in front of a judge, is there anything you can't do with your lawyer via instant messaging and e-mail?
 
    I woke up one morning with a painful round discolored area on my leg. I grabbed my digital camera, took a picture of it and e-mailed it to a co-worker of mine in India. His wife is a doctor. She said it looked like a spider bite. I immediately changed the sheets on my bed.
 
    We are quickly coming to a time that, if a job can be done using a computer, or a phone, it is probably not cost effective to do it domestically, especially if your competition is doing it less expensively (by sending it elsewhere). When you contemplate this, consider that the list of jobs that can be outsourced is very long. And it leads this writer to the conclusion that the list of jobs that can't potentially be outsourced is much shorter than the list that can.
 
    What about your job?
 
Jeff Roehl works with LLC Solutions Inc, a software company.

    For better or for worse, we all live in Marshall McLuhan's "global village" and Chicken Little runs through our living room on every hourly newscast. This does not mean that there are not real problems in the world. There are. What is relatively new is that today one politician can command coast-to-coast attention by repeating some assertion over and over -- a power not given to an absolute monarch a few years ago.
 

    But in a world where the war on terrorism is the central problem of our time, it is ironic to hear some politicians and the mainstream media whipping up a perception that we have a major problem of exporting a lot of jobs to faraway places and receiving nothing but increased unemployment in return. This situation, we're told, is the dark side of globalization. Some commentators have gone so far as to suggest that American CEOs whose companies outsource jobs should be censured or fired. This lament would make more sense if it came from countries around the world that are outsourcing their jobs to the U.S. in huge numbers.
 
    The balance of jobs we import from abroad greatly exceeds the jobs we export abroad. Every time a foreign company decides to build a plant or opens an office in the U.S., Americans are put to work to man these facilities. Examples abound. Honda increased its U.S. manufacturing last year by 15%. And it is not only manufacturing that is attracted to our shores, but also intellectual capital. Novartis is moving its huge world-wide research and development operation from Switzerland to Massachusetts. Texas is the beneficiary of a $500 million investment from Samsung to build a new semiconductor plant. In some cases -- described in this paper recently as "the second wave of Nafta" -- Mexico is now able to invest abroad, and that investment is creating "thousands of jobs" for U.S. workers. Many countries with ample capital have poured a steady stream of job-creating investment into the U.S.

    The Organization for International Investment keeps track of the number of jobs that are outsourced by other countries to the U.S. While we are exporting some jobs to other countries, the greatest beneficiary of outsourcing is the U.S. itself. We are importing many more jobs than we export. Indeed foreign companies of all kinds from all over the world are attracted to our stable political environment, our relatively low corporate tax rate and the huge growth in productivity by American workers. Many foreign companies trying to compete in the global market carry the cost of the residual socialism found in some European countries, and they look to the U.S. as a far more salubrious business climate.
 
    The latest figures show that as German and Japanese auto makers, foreign drug companies and banks outsource to the U.S., some 6.4 million American jobs were created in 2001, up from 4.9 million in 1991. Contrary to the political static, some 34% of these imported jobs are in the manufacturing sector of our economy. These foreign companies operating in the U.S. are creating more jobs for Americans than homegrown U.S. companies. In the heartland, where the drumbeat against "exporting jobs" is the loudest, data shows that Ohio has imported 242,000 jobs; Indiana has attracted 163,000; and in Michigan some 244,000 jobs, about 6% of the workforce, are imported. And the list goes on. Sometimes the loudest laments originate from the states that have imported the most jobs.
 
    In addition to creating jobs for Americans, many of the U.S.-based foreign companies also export products. Indeed, these exports now constitute about 22% of all American exports. At a time when some worry about our trade balance, this is not an insignificant achievement. Because of globalization, which is currently under attack in some quarters, it should be noted that in addition to the annual payroll of $350 billion flowing to American workers, American investors benefit by owning 20% of the common stock of the largest of these foreign companies. These job-creating foreign investments in the U.S. are "win-win" situations for all concerned.
 
Mr. Wriston, former chairman & CEO of Citicorp/Citibank, is a trustee of the Manhattan Institute.