May 30, 2004

Offshoring Impacts Thousands of Tennessee Workers

The Tennessean has an interesting story about how the "offshoring" of jobs is impacting tens of thousands of workers in Tennessee. Read the whole story here or an excerpt follows. (Yeah, I know I wrote yesterday that I wasn't gonna blog much this holiday weekend, and I'm not - but an economic trend that involves the jobs of 157,000 Tennessee workers is too important to not blog.)

Hundreds of foreign firms operating in Tennessee employ tens of thousands of people. During his first trip to Japan in 1987, Matt Kisber thought the governor of Hokkaido, a prefecture in the northern part of the country, might need a little help recognizing his home state of Tennessee.

"Being from Tennessee, I tried to pinpoint it for him - Jack Daniel's and Elvis," recalled Kisber, who at the time was a young member of the Tennessee General Assembly. "And he said, 'Oh, I know exactly where Tennessee is. You're the one taking all of our jobs.' "

The reference, of course, was to the scores of Japanese companies that had set up operations in Tennessee in the previous decade. Of these, the most notable was Nissan, whose landmark decision in 1980 to build its first U.S. automotive assembly plant in Smyrna represented the largest foreign investment ever by a Japanese firm.

"That was a real defining moment for me," Kisber, now Tennessee's commissioner of Economic and Community Development, said of his conversation with the governor from Hokkaido. "As we had concerns about what was taking place in the (global economy), likewise they had concerns in their own home market that they were losing jobs - the same concerns we've had today about the outsourcing of jobs."

Concern about jobs moving ''offshore,'' particularly to lower-cost locales such as China, India and Mexico, is without question on the mind of many American workers these days. Their fears speak to a larger apprehension about life in an economic climate where companies and investors can search the globe for the best place to do business or invest their hard-earned capital.

While acknowledging those worries, proponents of globalization argue that focusing solely on work moving abroad ignores the thousands of foreign companies that decide to set up operations here in the United States. They have even coined a new phrase to cast new light on the practice, which economists usually refer to as foreign direct investment: "insourcing."

"The media has focused on one facet of globalization: outsourcing," said Todd Malan, executive director for the Organization for International Investment, a Washington, D.C.-based trade association that represents the U.S. subsidiaries of foreign companies. "But the flip side of outsourcing jobs abroad is insourcing jobs to the U.S. by companies based abroad."