BTC Brief: Going, Going, Gone - Offshoring, Job Losses, and the North Carolina Economy

By Allan M. Freyer
Public Policy Analyst, Budget & Tax Center
July 2012

KEY FINDINGS:

  • In the quest for global competitiveness, firms often seek to reduce labor costs by "offshoring," defined as the movement of production—and jobs—away from relatively high-wage, advanced economies like those in United States to less developed countries with lower wage wages and weaker labor standards.
  • While offshoring has contributed to record corporate profits, the consequences for North Carolina have been the most sluggish economic recovery in 30 years, and the emergence of a two-tier labor market with low-wage jobs and high-wage jobs, but little in between.
  • Offshoring to China cost North Carolina more than 107,000 jobs from 2001 to 2010, and offshoring to Mexico cost the state 26,500 jobs in 2010 alone. Absent these job losses, North Carolina would have almost completely returned to its employment levels before the Great Recession.
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