Worried about outsourcing? Cheer 'insourcing'
It's a tactic that actually creates more, and better-paying U.S. jobs. Plus, more on which college majors are most in demand now.
By Anne Fisher, FORTUNE senior writer

(Fortune) -- Dear Annie: Recently on a talk-radio show I heard some people discussing "insourcing," which is not a term I've heard before. I tuned in too late to catch most of what was said, but I'm curious: Is insourcing like outsourcing, i.e., another threat to American jobs? -Kansas Kid

Dear Kansas: On the contrary. The term refers to overseas companies' building manufacturing plants and other facilities in the U.S., thereby generating more jobs for Americans.

Unfortunately for the U.S., competition from other countries has caused a slight decline in insourcing here, which is down 2.4% (or 128,000 jobs) since last year, according to the Organization for International Investment, a nonprofit research group based in Washington, D.C.

That still leaves 5.1 million jobs, or about 4.5% of the total, that are provided by foreign companies and their subsidiaries. Moreover, these employers support a payroll of $324.5 billion, up from $254.5 billion five years ago. Interestingly, non-U.S. companies tend to pay better than their Yankee counterparts, the OFII reports. Average compensation per worker is $63,428, 32% higher than the average at all U.S. companies.

And, while they have to abide by U.S. employment law, employers based overseas tend to have somewhat different policies, depending on the culture and customs of their homelands. I've known people who have gone to work for European companies in the U.S., for instance, who are pleasantly surprised at how much vacation time they get.

Overseas companies' operations here are heavily concentrated in manufacturing, which accounts for roughly one-third of all insourced jobs. The top 10 states for foreign investment are California, New York, Texas, Florida, Illinois, Pennsylvania, New Jersey, Ohio, Michigan, and North Carolina.

But insourcing pops up almost everywhere. A few months ago, Denso Corp. of Japan broke ground for a new car-parts manufacturing plant in Arkansas that will employ about 500 people. Because of the region's 13.5% unemployment rate, Arkansas governor Mike Huckabee said the Denso project was "like water to a thirsty soul."

So, while I didn't catch that radio discussion either, I'd be willing to bet it was about how to encourage more insourcing.


Many thanks to everyone who wrote to comment on the September 8 column about which college majors are most likely to lead to a great job after graduation. One that I overlooked is pharmacy: It seems that there is such a shortage of pharmacists in the U.S. that trade magazine PharmacyWeek (see www.pharmacyweek.com/salary) reports starting salaries of $96,000, up to $108,000 for pharmacy team leaders. Likewise, Ph.D.s in nursing - that is, people qualified to teach in nursing schools - are in short supply; and, writes Cathie Currie, a nursing Ph.D. in New York City, nursing in general offers "greater job security and mobility than most other jobs."

Then too, several readers wrote to point out that chemical engineering, while a solid career choice, isn't the only kind of engineering major that can take you places. Husband-and-wife engineers Alysia and Joseph Bucci note that both biomedical and environmental engineering are fast-growing fields.

Of course, whatever your major, you may end up doing something unrelated to it - especially if you're not aiming for a narrowly-defined niche (like, say, medical school).

"People should major in whatever they are most interested in," writes a reader named Joe. "As long as you have basic quantitative skills and can explain why you picked your major, most employers will not discriminate against you." He's speaking from experience. A senior at a liberal arts college in New England, he's a philosophy major who's been hired to start work at a big investment bank after he graduates. Go figure.

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