1. What are the pros and cons of outsourcing?
2. How does outsourcing affect U.S. consumers? U.S. producers?
3. Longer term, what is the likely impact of outsourcing on American jobs?
4. Several states are contemplating legislation that would ban the outsourcing of government work to foreign firms. What would be the likely consequences of such legislation?
In early 2004, White House economist Gregory Mankiw had the misfortune of stating publicly what most economists believe privately—that outsourcing of jobs is a form of international trade and is good for the U.S. economy because it allows Americans to buy services less expensively abroad. Critics of outsourcing immediately called on President Bush to fire Dr. Mankiw for seeming insensitive to workers who have lost their jobs. It is obvious to these critics that outsourcing, by exporting white-collar American jobs to foreign countries, is a major cause of U.S. unemployment. Related criticisms are that outsourcing costs the United States good jobs and is a one-way street, with the United States outsourcing jobs to foreign countries and getting nothing in return.