How Outsourcing Backlash Could Swing the Election in Key States

A study shows that although attacks on the practice are having a small impact overall, they could matter enough in heavily-hit areas to change the election's outcome.

The Obama campaign has its newest attack in hand: Mitt Romney wants to send all your jobs overseas.

"Tampa, we don't need an outsourcing pioneer in the Oval Office," Obama said Friday, the same day the Washington Post published an article portraying Romney as having pushed the strategy while at Bain Capital. The campaign released a video on the same theme, and seems poised to make outsourcing a major topic of discussion.

The political logic is obvious enough: Romney has made his business experience central to his case for election, so the Obama team wants to do whatever it can to tarnish Romney's career in voters' eyes. And Democrats have long had a weakness for protectionism -- they trot it out every election, much like fearmongering on Social Security. But will this attack work? Matt Taylor, blogging at Slate, says yes; the conservative blogger Gabriel Malor insisted otherwise on Twitter. There's not much direct proof either way, but circumstantial evidence suggests that successful attacks on outsourcing really could hurt Romney's chances, especially in what's expected to be a close election.

Here's what we know for sure: Americans really, really hate outsourcing. In September 2004, 71 percent said it was bad for the U.S. economy. In 2010, 83 percent of blue-collar workers polled by the Wall Street Journal said outsourcing was a culprit in the nation's weak economy. Most economists don't agree; outsourcing is often a product of free-trade agreements, which tend to improve the economy overall.

But does that translate into action at the ballot box? At first glance, it appears not to. No politician has waved the bloody shirt about outsourcing quite so vigorously as John Kerry in 2004, when he bashed "Benedict Arnold CEOs" who sent jobs overseas and decried President George W. Bush for failing to stop them. Kerry, of course, lost -- but there was much more to that race than outsourcing. House Democrats tried going after outsourcing in the lead-up to the 2010 midterm elections, which had disastrous results for them. Then again, it's hard to imagine anything could have saved them from the energy of the grassroots conservative uprising. Senator Barbara Boxer attacked Meg Whitman Carly Fiorina for outsourcing jobs during her time as CEO of Hewlett-Packard and won, but Boxer was a Democratic incumbent in a very blue state, so she always had the upper hand.
Backlash against outsourcing accounted for more than John Kerry's margin of victory in the Badger State in 2004.

Columbia political scientist Yotam Margalit, however, did a more detailed study of the 2004 election and found that outsourcing can be a potent issue: "Between 2000 and 2004, the electoral cost to the incumbent of a marginal job lost due to foreign competition was, on average, more than twice as large as the effect of a job loss resulting from other causes (e.g., domestic competition)." In other words, unemployment hurts an officeholder seeking reelection, but unemployment from jobs shipped overseas is much worse.

The problem with Margalit's paper is that it doesn't tell us much about a challenger. But it's reasonable to think that Romney might have a harder time batting down accusations than Bush did. To begin with, 2004 was a foreign policy election, fought on the grounds of perceived strength or weakness in the war on terror in a country still reeling from the 9/11 attacks. So far, 2012 is shaping up to be another economy election, like 2008. As well, Taylor argues, Romney lacks the common touch that Bush had. And Democrats don't have to ask whether voters would trust Romney to stop outsourcers: They just have to note that he actively took part in outsourcing. Most importantly, they don't have to convince everyone, just voters in a few key swing states -- in particular, Iowa, Ohio, and Wisconsin. Let's take the latter, which Republicans are eying a possible pick-up since Governor Scott Walker's victory over a recall attempt. Here's Margalit again (emphasis added):

I also find significant geographic variation in the electoral impact of job losses stemming from trade, whereby the president's support was almost unaffected in some areas but dropped by upward of 4 percentage points in the hardest hit counties. In Wisconsin, a state with 10 electoral votes, the electoral impact associated with job losses due to foreign competition was in fact larger than the swing needed to overturn the election's outcome.

That's pretty amazing. Backlash against outsourcing accounted for more than Kerry's (tight) margin of victory in the Badger State in 2004. Assuming Margalit's patterns hold in 2012, outsourcing is likely to be most effective as an attack in Rust Belt states that have seen heavy outsourcing over the last decade. Many of those states are swing states -- suggesting Romney has good reason to worry about the outsourcing attack.