Saving Jobs from Outsourcing
By Arnold Kling
Stuart Anderson looks at the arithmetic of Indiana’s effort to save jobs from outsourcing.
Out of 65 contract employees, Tata would have employed a number of Hoosiers through an Indiana-based subcontractor, but would also have used Indians currently employed by the firm…let’s assume that the Governor’s action leads to hiring an extra 50 people from Indiana at the cost of at least $8.1 million for taxpayers (the difference between Tata’s bid and its nearest competitor). That would translate into Indiana taxpayers spending an extra $162,000 per worker
The state of Indiana probably is going to lose jobs overall because of its protectionism.
Thanks to Alex Tabarrok for the pointer.
For Discussion. Which government policies to limit outsourcing would not end up costing jobs overall?