Offshoring Woes

I am continually amazed at how many people are so worried about the offshoring of technology and call center jobs. The U.S. has been offshoring jobs for many decades and probably even longer.

As we have been sending jobs overseas our unemployment rate has stayed the same or even dropped. On a historical basis our current unemployment rate is extremely low. During most of America's history economists would have been thrilled with and unemployment rate below 6%. Yet today because of the political waters it is being viewed as very poor number.

We are also reading many articles about how the offshoring of jobs is not working as planned for many companies. Many are finding that it costs much more in the long run than they had been promised. Also, as more and more companies offshore the work the prices for skilled people in those areas is ballooning. This article points out a problem that is currently being experienced in the Philippines:

Philippine BPOs facing dearth of skilled workers

I think that this issue is much more of a political issue than a job issue. Jobs exist in the United States. In many fields there are shortages of workers. The offshore resources are filling that shortage in some cases. In other cases companies are saving money by using cheaper resources. By saving money, they are making more which is profitable for their shareholders. Who are their shareholders? Probably each and every one of us. Remember your retirement account?

As this continues to happen costs will rise overseas and it will become less and less profitable to send jobs overseas (look what happened in Japan 25 years ago). Our economy will continue to create jobs both here and overseas. What will our economy look like in 10 years? Only time will tell, but if it is larger and stronger it will be partially due to offshoring.