The Impact of Offshore Outsourcing on Developed Countries Jens Christiansen and Jim Burke February 20, 2006 CS/Econ/IR/Politics 125: Global Challenges

10,000 8,000 7, ,000 6, Quarterly data Job gainsJob losses Thousands Source: BLS Job Losses and Gains Since 1992

Setting the stage for corporate offshoring, 1970 – 2006: the creation of the ‘disposable’ American worker

US Economic Growth, 1949 – year average, % Rate of growth, %

US Unemployment Rate,

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’

‘The Doubling of the Global Workforce’ – Richard Freeman ,930 million 960 million

Full page anti-union ads in The New York Times and The Washington Post from last Monday, February 13th

IMPORTS & EXPORTS AS PERCENT OF GDP US GDP 2005:$ trill. EXPORTS:$.928 trill. (7.3%) IMPORTS:$ trill. (13.5%)  GERMAN GDP 2005:$ trill. EXPORTS:$ trill. (36%) IMPORTS:$.801 trill. (28%)

Corporate and Personal Income Tax, United States Percent of GDP Corporate Income TaxPersonal Income Tax Change Change Source: Budget of the United States, Historical Tables, 2006

Mean US Family Income, 1970 – dollars Bottom 20 th Top 20 th Top 5th 1970$12,570$81,856$125, $13,871$163,322$281,467 Percent change, %+ 99 %+ 124 % Source: US Bureau of the Census

Hourly wage for male workers, 1970 – dollars Bottom 20 th Top 10 th Top 5th 1970$9.93$27.80$ $9.22$34.05$43.48 Percent change, %+ 22 %+ 30 % Source: Economic Policy Institute from CPS

Employer provided pension insurance, 1979 – 2003 Percent of employees covered All Workers MenWomen High School College Percent change, %- 10 %+ 3 %- 11 %- 1 % Source: Economic Policy Institute Employer provided health insurance coverage, 1979 – 2003 Percent of employees covered All Workers MenWomen High School College Percent change, %- 15 %+ 7 %- 17 %- 11 % Source: Economic Policy Institute

GDP per head at purchasing power parity, 2002 Household income adjusted for inequality GDP per head adjusted for leisure (GDP per hour worked) United States = 100 “Grossly Distorted Picture” from The Economist, Feb. 11, 2005