Public opinion about offshore outsourcing

A while back, I blogged here and here about how American consumer behavior seems generally unaffected by the spectre of outsourcing — i.e., Americans make choices based more on price than origin of production. To be fair, some people do not think this way — click here for a few examples courtesy of Newsweek. Beyond anecdotal evidence, however, what do Americans now think about outsourcing? And do these feelings affect their behavior? Two recent polls — one by the Employment Law Alliance (“the world’s largest independent network of labor and employment attorneys”) and one by Ipsos (for the Associated Press) suggest some commonalities and cleavages on the issue. On the one hand, the polls largely confirm that most Americans are mercantilists at heart. The Ipsos poll shows that 69% of Americans believe that outsourcing hurts the country — and only 17% think it helps the economy. 58% of respondents in the ELA poll believe that companies outsourcing work that could be done by Americans to offshore contractors should be penalized by the US government. At the same time, the ELA poll shows that 46% of Americans believe that offshoring has been exaggerated by the media. Still, it would be hard not to conclude that most Americans think offshore outsourcing is a bad thing. So how does this affect actual consumer behavior? Here the answer changes. On the one hand, the Ipsos poll shows that when asked to choose between a product made in the USA and a similar one made elsewhere, 93% of Americans say that they’d buy the American product. However, if the foreign good is cheaper, that percentage falls to 54%. Furthermore, a slight plurality (38% to 35%) do not check product labels so as to “buy American.” The AP story by Will Lester goes on to suggest a generational divide in the economic reaction — with younger folks more sanguine:

“That’s not a big deal to me, where it was made,” said Serena Evans, a machine operator from Hurt, Va. “I look for the cheapest product, because I barely have the money to buy it.” Evans, 24, was typical of her age group. Nearly two-thirds, 63 percent, of those younger than 30 said they seldom if ever check to see where a product is made — more than three times the number who do. A majority of young adults said they would buy a lower-priced product from another country over a more expensive U.S. one. Americans 60 and older were almost twice as likely to say they usually or always check labels to see where a product is made. And by more than 2-to-1, they said they would buy an American product even if it cost more than foreign goods.

As the story concludes, “Fresh concerns about U.S. jobs being shipped overseas are not being turned into renewed public sentiment to buy American.” So, to sum up — Americans do not like offshore outsourcing as a phenomenon — but over time, and increasing number of them are happy to reap the benefits of it as consumers. This is really the biggest intellectual divide on the outsourcing issue — whether one thinks the most important effect of offshoring is on employment or on consumption. Most Americans say the former but do not act on it. The data I’ve seen suggest that outsourcing’s effect on employment is negligible — and the effect on consumption is a positive one.