Lou Dobbs

All the other news stations were going on about Michael Jackson, so I ended up watching Lou Dobbs on CNN tonight. Personally I think the media should only do their reporting after the trial. I know that Lou rarely gets economic reporting right even though reporting on the economy has been his job for a number of years. I know that he's been on a rampage about the dangers of outsourcing 2% of all US jobs overseas. For comparison, 1% of all workers leave their jobs every week either voluntarily or involuntarily. I know that he's left of center on most issues, but hey, it's been a while since I've watched CNN, so I'll give him a chance.

I couldn't find a link, so this is from my Tivo, around 10:30pm: Lou's opening sentence after commercial break is "Tonight it is important to note that in this country we still do not have the same number of jobs that we had 5 years ago. Part of the reason is that we are exporting jobs and we are importing labor." He then continues on about the US Citizenship and Immigration Services approving 10,000 more H1 visas than the 65,000 that Congress allows.

I can't really nail him for a factual inaccuracy here. He doesn't specifically say that there are fewer jobs now than in 2001, but that is the tone for the rest of the segment. As you can see from the second sentence, Lou wants his viewers to assume that there are fewer jobs now. Let's examine why that is not true.

The Bureau of Labor Statistics archives month-by-month summaries here. Take a look at January 2001. It indicates that 135,999,000 people were employed then. Now, fast forward to February 2005. It says that 140,144,000 people were employed last month. According to my calculator, that means that 4,145,000 more people are employed now compared to 5 years ago. Yes Lou, we "still do not have the same number of jobs that we had 5 years ago." But do we really want to lose 4.1 million jobs in order to be at parity? I don't think so. A closer statement of fact would be that job growth didn't keep up with population growth (mostly from immigration) from 2000 to late 2003. Then, large gains were made so that job growth today is almost at parity with population growth.

Now, moving on to the (capital "O") Outsourcing. Lou has written and editorialized on outsourcing many times before. As TCS has pointed out, more jobs are created from foreign companies sending jobs to America than we send overseas. I used the excellent Dr. Thomas Sowell in my own rebuttal when Kerry was making the same statements last year. Dr. Sowell brings up the fact that 4.7 million jobs have been sent to America by foreign owned companies.

That's one aspect. The other is that outsourced labor is cheaper. Though it's sometimes only a short-term fact, long-term costs quite frequently end up being the same as it would have been keeping it in-house. That means that these companies can charge less for their products and services. That means $40/month gets you a cell phone (phone provided free of charge) with plenty of talk time. That means that computers are so cheep that "everyone" has one. That means that $100 will get you a complete outfit (shirt, shoes, socks, pants, watch and wallet) at Target, Walmart, Kmart, Kohls and the like. Sure it sucks when your job goes overseas. It's happened to a couple of people I know. The funny thing is that they found jobs quickly, paying them more money.

Let's recap, twice as many jobs are sent to America than we send overseas and Lou thinks it's a problem. The jobs sent are repetative and hard to fill here in the States so companies can usually charge less so you can have your cell phone connected to your ear 24/7. I want to ask Lou why he's spending so much energy on a "problem" that effects only 2% of all jobs. Why not spend time on something that would effect at least a double-digit amount?

Lastly, an H1 visa applicant must have a company willing to sponsor them before they are approved to work in the States. That means they already have a job. H1 visas are for high-tech jobs and for that reason has been separated from the rest of the visa program. US citizens competing against H1 visa holders and applicants must be highly educated and/or trained. Since there is such a small number (75,000 total) and it brings smart, educated people to the States, I don't know why Lou has a problem with it. If it were bringing former UN Peacekeepers from the Congo, then I would take more offense to this. But since the total numbers involved would be a rounding error on the jobs report, I'm not too worried about it. Yes, I say that even though I work in an industry that brings in plenty of H1 visa holders.