Outsourcing and manufacturing

A question from Yahoo! Answers:

Are Outsourcings benefits worth the damage to the US economy?

We’ve lost our manufacturing base. We’re losing middle America’s jobs. The quality of what we get is questionable. Some of the products we get are downright inferior if not outright dangerous and the cost savings are not being passed on to the consumer. All the benefits of outsourcing seem to go to Executive Bonuses. I’m not against making money but has this gamble been worth the benefits in how its affected to this country?

Stop reading the popular press; the journalists write what they think the public wants to hear, whether or not it is true. Anyone who professionally studied the manufacturing job loss has come to two conclusions, (1) manufacturing job loss is occurring globally (about 22 million manufacturing jobs were lost globally between 1995 and 2002, with the highest losses observed in… [drum roll]… China), and (2) manufacturing job loss is squarely due to increasing mechanization and automation (between 1995 and 2002, despite the job loss, the world’s manufacturing output increased 30 percent).

This process is very similar to the agricultural job loss that the U.S. has experienced over the years. In 1870, half of the U.S. workforce was employed in agriculture, by 1920, the percentage declined to 25%, currently, it’s less than 3%…

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