The Impact of Offshore Outsourcing on Developed Countries Jens Christiansen and Jim Burke February...
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Transcript of The Impact of Offshore Outsourcing on Developed Countries Jens Christiansen and Jim Burke February...
The Impact of Offshore Outsourcing on Developed Countries
Jens Christiansen and Jim BurkeFebruary 20, 2006
CS/Econ/IR/Politics 125: Global Challenges
10,000
8,000
7,000
92
9,000
6,000
94 9593 96 9897 0099 0201 0403 05 06
Quarterly data
Job gains Job losses
Th
ou
sa
nd
s
Source: BLS
Job Losses and Gains Since 1992
Setting the stage for corporate offshoring, 1970 – 2006: the creation of the ‘disposable’ American worker
0
3
6
9
12
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
Un
emp
loym
ent,
%
1949 - 69
1970 - 2005
US Unemployment Rate, 1949 - 2005
Setting the stage for corporate offshoring, 1970 – 2006
Lowering the barrier to layoffs as a corporate strategy
Declining economic growth and rising unemployment rates
Deregulation of industries
Declining union bargaining power
Growing influence of financial markets and financiers over corporate management
A falling minimum wage and the rise of a low wage, low value workforce
Large-scale and ongoing layoffs have become an acceptable business practice for corporations – an ‘unfortunate necessity’
Full page anti-union ads in The New York Times and The Washington Post from last Monday, February 13th
IMPORTS & EXPORTSAS PERCENT OF GDP
• US GDP 2005: $ 12.770 trill. EXPORTS: $ .928 trill. (7.3%) IMPORTS: $ 1.727 trill. (13.5%)
GERMAN GDP 2005: $ 2.830 trill.
EXPORTS: $ 1.016 trill. (36%) IMPORTS: $ .801 trill. (28%)
Corporate and Personal Income Tax, United StatesPercent of GDP
Corporate Income Tax Personal Income Tax
1970 2000 Change 1970 2000 Change
3.2 2.1 -1.1 8.9 10.3 1.4
Source: Budget of the United States, Historical Tables, 2006
Mean US Family Income, 1970 – 20032003 dollars
Bottom 20th Top 20th Top 5th
1970 $12,570 $81,856 $125,692
2003 $13,871 $163,322 $281,467
Percent change, 1970 - 2003
+ 10 % + 99 % + 124 %
Source: US Bureau of the Census
Hourly wage for male workers, 1970 – 20032003 dollars
Bottom 20th Top 10th Top 5th
1970 $9.93 $27.80 $33.51
2003 $9.22 $34.05 $43.48
Percent change, 1970 - 2003
- 7 % + 22 % + 30 %
Source: Economic Policy Institute from CPS
Employer provided pension insurance, 1979 – 2003Percent of employees covered
All Workers
Men WomenHigh
SchoolCollege
1979 51 57 41 51 61
2003 46 47 44 40 60
Percent change, 1979 -
2003- 5 % - 10 % + 3 % - 11 % - 1 %
Source: Economic Policy Institute
Employer provided health insurance coverage, 1979 – 2003Percent of employees covered
All Workers
Men WomenHigh
SchoolCollege
1979 69 75 59 70 80
2003 56 60 52 53 69
Percent change, 1979 - 2003
- 13 % - 15 % + 7 % - 17 % - 11 %
Source: Economic Policy Institute