Excellent speech by Don at The Conspiracy to Keep You Poor & Stupid. Proud to say, one of the smartest people I know.

The McKinsey Global Institute estimates that the volume of offshore outsourcing will increase by 30 to 40 percent a year for the next five years. Forrester Research estimates that 3.3 million white-collar jobs will move overseas by 2015. Gartner estimates that by the end of this year, 1 out of every 10 IT jobs will be outsourced overseas. Deloitte Research estimates the outsourcing of 2 million financial-sector jobs by 2009.

These aren’t even really “estimates.” They’re forecasts. No, they’re S.W.A.G.’s — stupid wild-ass guesses.

Remember, these consultants are the same geniuses who said, four years ago, right about the time when the NASDAQ was at 5000, that Internet traffic would grow at 90% a year forever, and that by 2002 every American citizen would have digital video-on-demand beamed via low earth orbit satellite to his cell phone. Hey, if that were true I could be watching “Friends” right now.

Let’s get real. Suppose Forrester is right, that 3.3 million white-collar jobs will move overseas by 2015. That’s eleven years, folks. That’s 300,000 jobs a year, or 25,000 a month. Today there are 130 million jobs in the United States.

So the cost is 2/100 of 1% of jobs each month. Don’t worry about it. On average the US economy generates job growth 10 times that much every month.

But it’s not just that even the wild-ass guesses are actually quite small in the grand scheme of things. The worst part of it is that these forecasts inevitably just look at costs, and never benefits.

1 thought on “Outsourcing”

  1. And here’s the sound byte:

    “So what can we do in terms of policy to address these issues?

    You do the hardest thing of all. Nothing. And the more nothing the better.”

    One can quibble about occasional comments in his piece. I think it’s here i read a post that NAFTA’s benefit to Mexico has been exagerated, and Don claims NAFTA as a “We all won” example.

    But right now i cannot think of a better piece on free trade and outsourcing, anywhere.

    Matya no baka

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