Saturday, May 05, 2007
Does Alan Blinder have the answer?
In a Washington Post op-ed, Free Trade's Great, but Offshoring Rattles Me
, Alan Blinder discusses free trade and how it will be tough on many workers in the U.S.:
[Consider an] an American computer programmer or accountant. They've done what they were told to do: They went to college and prepared for well-paid careers with bountiful employment opportunities. But now their bosses are eyeing legions of well-qualified, English-speaking programmers and accountants in India, for example, who will happily work for a fraction of what Americans earn. Such prospective competition puts a damper on wage increases. And if the jobs do move offshore, displaced American workers may lose not only their jobs but also their pensions and health insurance. These people can be forgiven if they have doubts about the virtues of globalization.
And then he looks to the future:
... one good bet is that many electronic service jobs will move offshore, whereas personal service jobs will not. Here are a few examples. Tax accounting is easily offshorable; onsite auditing is not. Computer programming is offshorable; computer repair is not. Architects could be endangered, but builders aren't. Were it not for stiff regulations, radiology would be offshorable; but pediatrics and geriatrics aren't. Lawyers who write contracts can do so at a distance and deliver them electronically; litigators who argue cases in court cannot.
What else is to be done? Trade protection won't work. You can't block electrons from crossing national borders.
But he said:
Were it not for stiff regulations, radiology would be offshorable
So, there are
regulations that prevent offshoring after all? Why can't similar regulations be applied to computer programming and architecture? (to name two professions Blinder cites)
I'm an engineer, so my job is certainly out-sourceable. However, there are certainly signs that 1) the global pool of engineers are all working, and 2) there's a limit to the effectiveness of out-sourcing. Locally, it's been difficult to find qualified engineers, and even internationally it's just as difficult.
I'd be happier if talent were moved to America, and paid American wages, but I'm just saying I don't think the outsourcing of skilled labor will lead to disaster.
While I'm not a big fan of off-shoring for a few reasons, what if my small American company needs -- truly needs -- the services of some Russian or German engineers to successfully go up against key competitors in France, the UK and Israel? The question is not hypothetical.
"... key competitors based in France ..."
At the hospital where my partner works, diagnositic radiology (as opposed to clinical radiology) is routinely outsourced, mostly to India and Ireland. Digital X-rays and MRIs cross borders as easily as any other electrons. Building is also outsourced. I've just watched a high-rise building go up across the street. It arrived in components, made mostly in Canada and Mexico, that more or less snap together with the steel frame, insulation, window frames, stone cladding, etc., already in place. Large parts of litigation, such as document review for discovery, are also capable of being outsourced.