[lbo-talk] "insourcing"

[Guilherme]

http://www.hillnews.com/news/030904/insourcing.aspx

Outsourcing is bad, insourcing is better
Republicans test a new phrase in debate over jobs
By Josephine Hearn

Stung by Democrats. attacks on the outsourcing of U.S. jobs overseas,
Republicans have begun to emphasize .insourcing. . a catchy new term that
describes the friendlier flip side of free trade.

Insourcing is the movement of foreign jobs to the United States.
Conventionally known as foreign direct investment, insourcing has risen in
recent years as more foreign firms set up operations in America.

One example: the 4,300-worker BMW factory in Greer, S.C.

Insourcing, which accounted for 6.4 million jobs nationwide in 2001, has
been growing at a faster rate over the past 15 years than outsourcing, but
from a lower base, figures compiled by the Organization for International
Investment (OFII) show.

The trade group, which coined the term insourcing, represents the U.S.
subsidiaries of such corporate giants as Toyota (Japan), Nestli
(Switzerland) and Siemens (Germany).

Armed with OFII.s numbers . which also show that insourced jobs pay 16.5
percent more than the average domestic job . GOP lawmakers hope to
neutralize Democratic arguments that free trade hurts American workers.

.Outsourcing is a matter of concern,. said Senate Majority Whip Mitch
McConnell (R-Ky.) on the Senate floor last week, .but we are proud of the
insourcing that is going on, too, and the fact there is an enormous number
of foreign corporations that have come into our country because they think
it has a good business environment..

Sen. John Kerry (D-Mass.), the presumptive Democratic presidential
nominee, has called outsourcing a .double blow. to U.S. workers already
suffering from a rise in unemployment. He proposes requiring companies to
notify their U.S. employees if they intend to hire overseas.

McConnell was the first lawmaker to mention the term insourcing on the
floor of either chamber, OFII believes. References to insourcing have been
circulating in Republican circles for several weeks.

House Rules Committee Chairman David Dreier (R-Calif.) sent around a .Dear
Colleague. letter last month that introduced House members to the
insourcing term and included a Feb. 4 op-ed piece from the News & Observer
of Charlotte, N.C., trumpeting the benefits of insourcing.

A whitepaper on outsourcing written last week by the Senate Republican
Policy Committee, which is chaired by Arizona Sen. Jon Kyl, also referred
to the News & Observer op-ed and said, .A flip side to the consequences
flowing from outsourcing is that foreign firms are also using this
practice to move jobs into the United States, which provides additional
benefits to U.S. workers and the economy..

.You can.t get upset about outsourcing without considering the benefits of
insourcing,. said Todd Malan, executive director of OFII, which considered
a number of terms, including .onshoring,. before promoting the insourcing
term.

Thea Lee, chief international economist at the AFL-CIO, said: .I think
everybody welcomes inward foreign direct investment, especially when
people pay good wages and don.t bust unions and so on..

But she cautioned that current trade numbers showed that even with
insourcing, U.S. workers were on balance losing. .In terms of
international engagement, we are on the losing end of that equation,. she
said.

The author of the News & Observer op-ed, North Carolina State University
economics professor Michael Walden, told The Hill that, while insourcing
has grown at a faster rate than outsourcing over the past 15 years, it has
grown at a slower rate since 1994, when the North American Free trade
Agreement and the Global Agreement on Tariffs and Trade were signed.

Outsourced jobs outnumber insourced ones by 3.4 million, according to the
Bureau of Economic Analysis.

Democrats brought the debate to the Senate floor last week when Sen. Chris
Dodd (D-Conn.) proposed an amendment to the corporate tax bill that would
place limits on outsourcing of federally funded contracts.

His amendment passed 70-26 after Dodd worked out a compromise on its
language with McConnell and Senate Commerce Committee Chairman John McCain
(R-Ariz.).