Earlier this year, Hewlett-Packard CEO Carly Fiorina defended her company’s decision to send American jobs to Asia by declaring, “There is no job that is America’s God-given right anymore.”  She probably did not mean to include CEO’s of Fortune 500 corporations in this statement—Hyderabad does not offer all the amenities she is used to, after all—but her blunt declaration that patriotism has no place in the board room perfectly captures the logic behind outsourcing.

Fiorina’s sentiments were echoed by Greg Mankiw, the chairman of President Bush’s Council of Economic Advisors, who observed that “outsourcing is just a new way of doing international trade” that would help the U.S. economy “in the long run.”  President Bush’s response to outsourcing has been to denounce the “economic isolationists” who would rather see high-paying computer jobs stay in the United States.

The majority of Americans, however, do not share the One Worldism of the Fortune 500 and the Bush administration.  A recent Gallup Poll revealed that 61 percent of Americans are concerned that they or a friend or relative might lose a job to outsourcing.  The same poll showed that 85 percent of Americans feel that a candidate’s stand on outsourcing will be important in how they vote, with 58 percent saying that it will be “very important.”  It is safe to say that not many of these voters are as enthusiastic about their jobs disappearing as Carly Fiorina is.

In one sense, the popular outrage over outsourcing is a bit puzzling.  As Mankiw noted, outsourcing is perfectly consistent with the free-trade ideology that has been embraced by the elites of both parties.  Those elites, however, have been telling us that, even though the loss of manufacturing jobs was somehow “inevitable,” we would prosper because high-paying computer and technical jobs would be ours.  The rise of outsourcing has exposed this fatuousness, as corporations rush to replace their American technical employees with foreigners.  The unemployment rate for electrical engineers stands at 6.2 percent, higher than the national average.  News stories have described how students previously interested in engineering are now pursuing jobs that they expect will continue to be performed here, such as those in law and the ever-growing government bureaucracy.  And the trickle of outsourcing threatens to become a flood.  Forrester Research projects that 500,000 computer-programming and information-technology jobs will migrate to India alone by 2015, joining a projected total of 3.3 million private-sector service jobs moving abroad over the same period.  Predictions from the University of California-Berkeley run somewhat higher: 14 million American jobs could be outsourced in the next decade.

Despite the platitudes mouthed by the Bush administration, the answer is not more education.  After all, many of the jobs being sent overseas require great intelligence and an advanced education.  It is not a lack of education that is causing American engineers to be replaced by Indian engineers making one fifth of what they do.  Those jobs will continue to move overseas, at least until American engineers’ salaries have dropped to the point where it is no longer attractive to replace them with Indians.  In fact, the Bureau of Labor Statistics recently released a list of the 19 fastest-growing occupations in America, and only two—registered nurses and postsecondary education—require any advanced education at all.  The blunt truth is that we can expect any job that is open to foreign competition will be performed by declining numbers of Americans at wages facing continued downward pressure.

As shown by both the February and the March job figures, the growth areas in our free-trade economy are government and areas subsidized by government, such as education and health services (which together accounted for 36,000 of the 46,000 jobs added in February), and areas insulated from foreign competition, such as retail trade, leisure and hospitality, and construction (which, together with government-related employment, accounted for over 70 percent of the job growth in March).  Although the more robust March job figures are good news, this remains the slowest recovery in terms of job creation since the 1930’s.  Reporter John Allen, writing in the March 7, 2004, Washington Post, cites Georgetown economist Harry Holzer, who notes that there has not been a similar decline in payroll jobs since the 1930’s, and Johns Hopkins economist Arnold Packer, who observes that employees’ share of the value added to the U.S. economy has fallen to its lowest point since such records were first kept in 1947.  Four million Americans have run through unemployment benefits without finding a job, and inflation-adjusted hourly wages have barely risen over the last year—even though the economy was growing during that entire time.

More and more Americans are coming to believe that there may be something fundamentally wrong with our economy.  And even some economists and businessmen are starting to rethink their adherence to free-trade ideology.  CNN’s Lou Dobbs has made opposition to outsourcing something of a personal crusade. Economist Jeff Madrick, writing in the March 18, 2004, New York Times, cites several economists who now believe that their profession has seriously underestimated the costs of job dislocation caused by free trade.  And supply-side economist Paul Craig Roberts, a staunch opponent of big government and one of the architects of Ronald Reagan’s 1981 tax cut, has written column after column exposing the fallacies of free-trade ideology.

The antidote to outsourcing is a return to economic patriotism by businessmen, consumers, and government.  Despite what free-trade ideologues maintain, this is not synonymous with big government.  Our current “recovery” has seen continued job growth in government, while private-sector jobs have disappeared, and it is hard to see government diminishing when disappearing jobs and declining wages create more government dependents, including two-income families relying on government to help with childcare and with the “advanced education” that is being touted as the remedy to job displacement.  By contrast, before America embraced free trade, government was small, taxes were low, and families largely cared for themselves.  Maybe that was not a coincidence.