Who’s really outsourcing?

Over on my Issues page, I have an article explaining why so many jobs have been lost. I attribute most of the job loss to government regulation. This has been confirmed by new research compiled by the Cato Institute:

We hear lots of talk about exactly why (and if) [outsourcing] is happening, but rarely do pundits and commentators look at the relationship between companies moving plants overseas, and the kinds of tax and regulatory policies employed by the states they’re moving away from. As it turns out, states with business-friendly public policies attract and retain jobs. States with policies hostile to business tend to lose them.

So, do all states experience outsourcing? Hardly:

How well are states with business-friendly public policy doing at attracting and retaining jobs? The evidence suggests they’re doing well. According to the Bureau of Labor statistics, the only state that actually gain net manufacturing jobs from 2000 to 2003 was Nevada. Nevada ranks 2nd on the SBSC’s business-friendly list. It ranks 3rd on the Tax Foundation list. It ranks in the top four of CFO’s list.

Which really only leads to one conclusion:

So the next time a local politician blasts NAFTA or greedy corporatism for the loss of local jobs, it might not hurt to take a look at just how friendly that politician’s state or city tax, and regulatory and labor policies are toward business. It’s likely that same politician’s policies are a big reason those jobs left.

You can read the entire article here.

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