US politicians inclined to complain about the transfer of jobs to countries other than their own should check their voting records on oil and gas leasing of federal land. Complaints about job losses from people who won't create jobs are hypocritical.
The frenzy of a presidential election campaign has made international outsourcing a hot issue. This is the economic phenomenon in which jobs vanish in the US and reappear in countries where labor costs are lower. Workers whose jobs emigrate obviously don't like it.
Plague treatment
Congressional Democrats and their party's presidential candidate are giving outsourcing the plague treatment. In February, Sen. Christopher Dodd (D-Conn.) introduced a bill that would prohibit the handling outside the US of services specified by certain federal and state contracts. After President George W. Bush tried to put outsourcing into perspective, the Senate on Mar. 4 approved the measure as an amendment to another bill.
A week later, Bush's nominee for a new federal position on manufacturing withdrew from consideration after Sen. John Kerry (D-Mass.), the presidential challenger, alleged that his company had moved jobs to China. The Bush campaign said Kerry's complaint had nothing to do with the retreat of Anthony F. Raimondo and denied that Raimondo's company, Behlen Manufacturing Co. of Columbus, Neb., sent jobs oversees. Indeed, reports of the nomination were said to have rankled Sen. Chuck Hagel (R-Neb.), who hadn't been consulted by the administration. There also were reports that Kerry's disclosure of the nomination surprised the administration, which hadn't yet announced it.
Kerry would hear nothing of an alternative explanation. "Their manufacturing czar, the person they chose, has been a poster person for the very depths of their policy that have affected millions of Americans negatively across the country," he said in a press conference. Kerry said Behlen Manufacturing, which makes steel buildings, opened a factory in China after laying off 17% of its employees in 2002.
Admonitions from Federal Reserve Chairman Alan Greenspan aren't likely to stop any of this. In a conference at Boston College, Greenspan said efforts to slow outsourcing would hurt the economy. Job protectionism, he warned, would create few if any jobs and invite retaliation from trading partners. What's more, job movements don't tell the whole story. US Department of Commerce figures show the service component of the US trade balance to be in steady surplus.
Politicians who bewail outsourcing ignore too much. The remedies they propose would raise prices of goods and services, lower investment returns, and force rigidity into an economy that leads the world because of its dynamism. Nobody likes layoffs. But they're inescapable now and can only become more so. The government should be helping people adapt to economic reality, not defending spurious claims to jobs better accomplished elsewhere.
Where is all this concern about jobs when proposals arise for oil and gas leasing of politically sensitive parts of the US? Resource development is a classic way to create jobs. But a majority of US politicians, Kerry among them, has turned single-mindedly hostile to it, especially when the resource is oil or natural gas. The reason for this hostility—fear of environmental damage—is wildly overblown. When exaggerated fear precludes activities certain to create jobs, something is wrong with leadership.
In the case just of the Arctic National Wildlife Refuge Coastal Plain, estimates of the employment benefits of exploration and development range from 250,000 to 735,000 jobs. The tally would rise from those levels if Congress relaxed restrictions to activity on federal land in the US West and allowed leasing off the East and West Coasts and in all of the eastern Gulf of Mexico.
Hard to outsource
A nice thing about oil and gas jobs is that they're hard to outsource. Most of the work has to occur close to the resource. For decades, however, the US government has outsourced oil and gas jobs as a matter of explicit policy.
It's not too late to conform leasing policy with genuine concern about jobs and the national economy. Whatever hydrocarbons exist beneath unleased land haven't gone anywhere. Leasing, drilling, and production won't, no matter what the extremists say, spoil the land. Politicians should encourage the activities. Those unwilling to do so have no credibility on other job issues.