Campbell (R-Irvine) is an Assemblyman representing the 70th
in Orange County. Mr. Campbell is the Vice-Chairman of the Assembly
Budget Committee. He is the only CPA in the California State
and recently received a national award as Freshman Republican
Legislator of the Year. He represents the cities of Newport
Laguna Beach, Irvine, Costa Mesa, Tustin, Aliso Viejo, Laguna
Woods and Lake Forest. He can be reached through his Assembly
and through the website
for his California Senate campaign. [go to Campbell index]
with the world...
[John Campbell] 5/25/04
the pendulum of success for Republicans and Democrats often
down to which party's candidates are perceived to
be on the "correct" side of a few issues that are most
important to the voters that year.
One of the big issues with voters recently has been jobs. Americans
want them. Californians want them. And they want better ones
than they have. In the past couple of elections, Republicans
clearly have been on the right side of this issue. President
Bush's tax reductions have clearly proven to provide economic
stimulus and jobs on a national basis. Closer to home, one of
the main drivers of the recall of Gray Davis was his stance on
jobs. The once great California job-creating engine had been
shut down by tax increases, a nearly bankrupt state budget, workers'
compensation costs, insurance costs, energy costs and rampant
frivolous litigation. Gov. Schwarzenegger and other Republicans
have been moving to restart that engine with a balanced budget
without tax increases, lower workers' comp premiums and energy
costs, and less litigation.
It is clear that the public sees Republicans as the party of
jobs and economic solutions. And Democratic leadership knows
it. So, what is a Democrat to do?
Well, they can't suggest limiting job-killing junk lawsuits
because that would upset the trial lawyers who donate millions.
They are already on record favoring tax increases so no jobs
there. More government spending on new programs won't do it either.
Ah-ha! John Kerry
and other Democrats proclaim. "Here's
an idea. Some American companies are setting up call centers
and computer programming in India and other foreign countries
to serve U.S. customers. Let's call this outsourcing and say
that it's costing jobs. And as a bonus, we get to blame business
for costing jobs so we don't get blamed and neither do our union
boss friends or trial lawyers. Of course, it's these same businesses
that create all the jobs in our economy but we don't have to
mention that. And we can use this to try to confuse, I mean convince
the voters into believing that Democrats care about jobs too."
So, John Kerry and
other Democrats think they have found an angle that will allow
them to wrestle the job-creation issue
away from Republicans. But the facts of the so-called "outsourcing" trend
tell a different story.
A recent study by the respected consulting firm McKinsey and
Company found that so-called outsourcing reduces the cost and
therefore the price of goods and services to U.S. customers.
By creating jobs in other countries that are better than what
they had before, it increases demand in those countries for U.S.
products and services. It also allows both human capital and
financial capital in the U.S. to be redeployed into areas where
they will be better utilized and will create whole new job categories.
OK, so maybe that
sounds like a bunch of economic proselytizing. But here's the
bottom line. For every dollar and every job "lost" to
outsourcing, we gain $1.14 back into the economy and about the
same ratio of new jobs.
So, "outsourcing" is
actually the source of net job creation. How can this be, you
Think of what percentage of the American population was employed
in farming at the turn of the 19th century. Think of how few
are employed in that occupation now. Was that a bad thing? No.
As farming methods gained in efficiency, those people and resources
were redirected elsewhere and the economy has more jobs as a
Do you own a TV? Probably.
Was it manufactured in the United States? Almost certainly
not. Those jobs were "outsourced" years
ago to places where those TVs could be built cheaper. But because
TVs are so cheap, almost everyone has 1 or 2 now. Because of
that, we have more channels and more advertising and more show
production than ever before. So, we lost jobs in the manufacturing
end of the TV business. But we gained many more high-paying jobs
in cable and satellite and advertising and TV production and
DVDs because the price of TVs has fallen to within the reach
of so many more people. And I could go on and on with the similar
stories about all the jobs in the cellular phone industry even
though we don't build many of the phones here, etc. etc.
But Democratic leadership
has never been interested in the facts of this issue. They
aren't interested in actually creating jobs.
They are only interested in the appearance of job creation. And
outsourcing, as is said in the political spin business, has good "optics." But
don't you fall for it.
The Silicon Valley company e-loan recently offered its customers
the option of dealing with a call center outside of the U.S.,
or to pay extra for one here. Eighty-six percent of their customers
chose the outsourced center. Those 86% will invest or spend that
savings on something else they deem more valuable. And, the market
will work as it almost always does.
So-called "outsourcing" more
efficiently uses capital and it creates jobs. Democrats' spin
doesn't' create jobs. It's
that simple. CRO