Dobbs Watch: Contrarian Views on Immigration and Outsourcing

By August 14, 2006Dobbs Watch

Dobbs WatchWe saw two stories over the past few days that likely would give our friend Lou Dobbs an embolism. The first ran in the WaPo last Friday, mimicked by dozens across the country that all touted the same theme, based on the findings of a new Pew study. Said the WaPo headline of the Kim Hart story, “Study Finds Immigrants Don’t Hurt U.S. Jobs.” That’s right. As counter-intuitive as this sounds, it happens to be true. We’ve also posted on it here on several occasions. “High levels of immigration in the past 15 years, ” says the WaPo story, “do not appear to have hurt employment opportunities for American workers, according to a new report.” This basically captures the first line of the study itself, i.e, “Rapid increases in the foreign-born population at the state level are not associated with negative effects on the employment of native-born workers.” Like we said, counterintuitive (especially if you watch Lou Dobbs) but true.

If that story doesn’t give Lou stroke-like symptoms, this one from yesterday’s New York Times by Daniel Gross most certainly will. Entitled, “Why ‘Outsourcing’ May Lose Its Power as a Scare Word,” it has some great nuggets therein. “Thanks to the forces of creative destruction,” it says, “more jobs are created and lost in a few months than will be outsourced in a year.” We’ve also been saying this all along as well. We wondered if they’ve been reading the blog when we read on:

“There is evidence that within sectors, lower-paying jobs are being outsourced while the more skilled ones are being kept here. In a 2005 study, Catherine L. Mann, senior fellow at the Institute for International Economics, found that from 1999 to 2003, when outsourcing was picking up pace, the United States lost 125,000 programming jobs but added 425,000 jobs for higher-skilled software engineers and analysts.

Economists also point out that jobs and services that are tradable won’t necessarily move to lower-cost places. Ms. Farrell of McKinsey said that despite their huge populations, China and India lack enough university graduates with the specific skills and experience to meet the staffing needs of Fortune 500 companies.

In addition, labor costs are only one of many factors that companies consider. Executives have to worry about reliable power supplies and the proximity of vendors and customers. Here, again, the United States has significant advantages over countries like India and China. As a result, only a small portion of the jobs that could be outsourced will be outsourced.”

We can’t count how may times we’ve made the point here that we compete on this country not on wages but on innovation. We’ve also said numerous times that companies locate not because of wages but to be close to reliable energy and customers. Now, even the Grey Lady agrees with us. You don’t think they’ve been reading the blog, do you….?

No matter, we wanted to provide links to these two important stories that cut against the grain of hysterical media as embodied in opinionators like Lou Dobbs.

Join the discussion 5 Comments

  • J says:

    Feeling sorry for myself? I don’t think so.

    I’m very aware that nothing in the world is free. I enlisted in the Millitary at 18 and the GI Bill along with 40 hour work weeks put me through college. I know the value of hard work and I’m not feeling sorry for myself. I’m clearing disagreeing with the “Simpson’s paradox” the scholars at Pew has produced.

  • G says:

    Stop feeling sorry for yourself J. Nothing in life is free, you have to work for it and make smart decisions. I would rather hire a Mexican over you. The Mexican educational system is a joke. The American education system is the best in the world. If you squandered your education that is your problem. We wasted our hard earned money on an education you threw away. You had an opportunity those Mexicans would have killed for. Construction work in the US doesn’t even require a high school diploma. Go to school, hell the rest of us taxpayers will again happily shoulder the bill for you and hope you don’t squander our money again. In my experience Mexicans work hard, don’t live off of government assistance and most importantly don’t blame other people for their mistakes.
    Go back to School, no American should be doing menial labor, we’re given every opportunity in the world.

  • Sobers says:

    I can’t talk about illegal immigration, but hi-tech immigration -H1Bs and EB immigration- is going to be very important to this country’s progress because of the demand for science & math skills. Asian countries like India, Korea, China and Japan have educational systems that place heavy emphasis on science and match education. Just look at their student’s test scores.

  • Joe dragon says:

    “Pew Hispanic Center”? come on Pat. What do you think they are going to say? Talk about a biased opinion. I noticed you failed to mention that the study refused to address the possible immigration affect on wages as apposed to just the number of jobs- how convenient.

    “We’ve also said numerous times that companies locate not because of wages but to be close to reliable energy and customers”

    Now that’s just plain funny Pat. Of course it’s all about labor costs. You see it’s cheaper to pay somebody 20 cent per hour than 20 dollars per hour. It’s simple math really. Just remember that traitor Jack Welch and his desire to have all his factories on barges so he could follow the cheapest labor market. That statement pretty much explains NAM’s big business thinking.

    By the way Pat, I’m still waiting for you to address the recent NAM vote on China currency manipulation. Remember the one where NAM may override the popular vote to coddle big business.

  • J says:

    Living in Texas, I’m gonna have to go ahead and sort of disagree with the worldly scholars of the PEW. Landscaping and constructions jobs use to be a way to make a decent living, no longer. Unless you are willing to work for much less $$$’s those jobs are no longer available to US citizens. One could argue that the jobs were not taken from US citizens, but they would be lying to me. If you drop my wages so far that I cannot pay for housing, taxes, property taxes, education, fuel, maintenance and insurance then you have changed the system in a way to replace me with someone that receives half of these benefits for free.

    Not every US Citizen is a scholar, or raised with a silver spoon in there mouths. There are no more winning lottery tickets. You use to be able to work an honest day and receive an honest days wage, that is no longer the case. This is the result of illegal immigration, and corrupt system that encourages the fruits of their labor. With the influx of illegals, the government is slowly creating a welfare state. In 10-15 years there will no longer be a middle class, there will be the haves and the haves not. The middle class is what made this country great, because anybody with enough hard work could succeed here. If you take away the middle class, this is no longer America.