Earlier this year Gregory Mankiw stated that if there was a service that could be produced more cheaply abroad then Americans were better off importing it than trying to do it on home soil. Outsourcing, both within and outside of the country, has become a major form of doing business. Many people, including a large number of politicians, see outsourcing as a possible cause for concern, but an article I read on the economist.com webpage suggests otherwise. The article states that a pretty tiny proportion of jobs lost in America are acutally going overseas.
The article suggest three themes for what is actually going on. The first is that most of the jobs being lost are cyclical in nature and not structural. Now that the economy is recovering after the 2001 recession a dramatic change in the job picture is expected. The second theory seems to go along with the theory of comparative advantage. Outsourcing has been going on for centuries. The process allocates money and resources to areas in which they will be most productive and, helped by competition, lowers prices. The third theme states that even though more IT jobs will be done abroad, many more, higher paying jobs will be created in America due to outsourcing.
The creation of new jobs always overwhelms the destruction of old jobs by a huge margin.
I have a hard time seeing how outsourcing and globalization can be detrimental to our economy as a whole and in the long run. Naturally there will be certain groups that will be adversely affected by outsourcing but I think the process will be beneficial overall.