Wall Street may love outsourcing jobs to low-cost foreign countries but investors, it turns out, do not. Most think it's bad for the U.S. economy and appear to support some tough measures against corporate America to control it, according to the latest Gallup poll released Tuesday, April 27.
About two-thirds, or 66 percent, of the 802 adult U.S. investors polled this month for the UBS/Gallup Index of Investor Optimism survey said they think offshore outsourcing is "bad for the economy." About one quarter, or 23 percent, said they were very or somewhat worried that they or someone in their household might lose a job because of it. Overall, investor optimism declined for the third month in a row.
The new survey numbers, issued by the online publication Gallup Poll Tuesday Briefing, suggest that the outsourcing issue, already front and center in a presidential election year, will continue as a flashpoint.
The results also suggest the average investor isn't enamored of free-trade philosophy. Jane and Joe investor appear more concerned about jobs than their portfolio, said Frank Newport, editor in chief of The Gallup Poll, which is based in Washington, D.C.
Newport said the results surprised him a bit because he had figured investors would be more sensitive to corporate management arguments that offshoring is a necessary tool for companies to cut costs in a super-competitive global environment.
Offshoring's supporters, including many economists, argue the practice does more good than harm to the economy in the long run by making U.S. goods more competitive. The jobs created by foreign companies hiring in the United States, they say, help offset the migration of jobs overseas.
The survey, done over the first half of April, is based on the results of telephone interviews with a randomly selected group of 802 investors who were at least 18 years old and had at least $10,000 of investable assets. The results might have been different, Newport pointed out in an interview, had the survey targeted investors with assets, say, of $2 million or more.
The general investor results jibe with other Gallup surveys of the general population that show a negative reaction to offshore outsourcing, he said.
"Outsourcing now has the same kind of negative connotation that HMOs and lawyers do," Newport said.
Investors were not directly asked if they support policies to limit offshore outsourcing, but a sizable majority described a variety of curbs as effective ways to deal with the practice. Seventy-six percent said they think these would be very or somewhat effective ways to deal with offshoring: require all government-related jobs to be performed in the U.S., improve the quality of education in the U.S., and reduce the cost of health care benefits to companies in order to make it cheaper to hire U.S. workers.
A full 72 percent said they thought tax penalties for companies that move jobs out of the country would work, and 67 percent said tariffs on goods produced overseas would work.
Some of the remedies deemed effective by investors surveyed are harsher than the flurry of proposals sitting in legislatures around the country. Lawmakers from around the country have introduced dozens of state and federal bills aimed at stopping or regulating offshoring of government work. Very few have passed into law, according to the National Conference of State Legislatures, which is tracking the issue. None of the outright bans have passed.
To date, one of the most significant moves to legislate limits on offshoring is the 2004 appropriations bill that President Bush signed in January. It contains a provision prohibiting federal contractors from sending any more work overseas for the next year.
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