Influential news magazine, The Economist, has labeled opposition to off shoring as "absurd". The bible of free trade groups, the magazine says protectionism is always wrong.
"[T]he image conjured up by the self-interested purveyors of alarm, of a hollowed-out America with relentlessly rising unemployment, is not just false but absurd," this week's leader says.
There's always some special "new condition" which makes even supporters of free trade take protectionist measures. Previous "special cases" which reignited protectionist zeal included "the growth of cross-border capital flows, the recognition that some industries exposed to foreign competition may have strategic or network significance for the wider economy, and concerns over exploitation of workers in developing countries".
Offshoring is the same, according to the Economist, and protecting against it is costly and futile. They're concerned that offshoring is becoming a hot political issue which could lead to a new era of protectionism. Candidates on both ends of the American political spectrum are increasingly talking about protecting white collar jobs from overseas competition. News network CNN, among others, "has embarked on a rabidly anti-trade editorial agenda" according to the magazine.
Explaining the advantages of free trade, the Economist says: "If a car can be made more cheaply in Mexico, it should be. If a telephone enquiry can be processed more cheaply in India, it should be. All such transactions raise real incomes on both sides, as resources are advantageously redeployed, with added investment and growth in the exporting country, and lower prices in the importing country. Yes, trade is a positive-sum game."
They explain that sending jobs to India does not decrease the overall level of employment, it just changes its pattern. They think offshoring is no different to the invention of a labour saving device, and opposing it is tantamount to being a Luddite. While they admit that on an individual level, offshoring can cause problems, they think this should be dealt with through retraining rather than protectionism.
"Workers in manufacturing had long understood that they were exposed to the challenge of competition from overseas. Workers in services hitherto believed they were not: it is unsettling to be disabused. Also, it is true that the sheer scale of service-sector employment within an advanced economy arouses anxiety, unwarranted though it may be, about how disruptive the new forces of competition will be."
They think the disruption of offshoring in the job market is being exaggerated and that the actual number of jobs being migrated is small and likely to remain so. This is especially true when compared to the destruction and creation of jobs that every dynamic economy experiences. America loses 2m jobs a month to factors other than offshoring. Generally though, it creates more than it loses - 24m more in the 1990s.
"The best-known report, by Forrester Research, a consultancy, guesses that 3.3m American service-industry jobs will have gone overseas by 2015—barely noticeable when you think about the 7m-8m lost every quarter through job-churning. And the bulk of these exports will not be the high-flying jobs of IT consultants, but the mind-numbing functions of code-writing."
"[T]echnological and geographical constraints will continue to keep many service-sector jobs close to the customer. In some ways, in fact, this is a pity: the greater the disruption, the greater the benefits."
The jobs lost to migration will be replaced by new and better jobs, if free-trade theory and the law of comparative advantage is correct. In fact, The Economist claims this already seems to be happening.
"[J]obs will be created that demand skills to handle the deeper incorporation of information technology, and the pay for these jobs will be high. The demand for computer-support specialists and software engineers, to take two examples, is expected by the Bureau of Labour Statistics (BLS) to double between 2000 and 2010. Demand for database administrators is expected to rise by three-fifths. Among the top score of occupations that the BLS reckons will see the highest growth, half will need IT skills. As it is, between 1999 and 2003 (that is, including during the recession) jobs were created, not lost, in a whole host of white-collar occupations said to be particularly susceptible to outsourcing."
"[T]he image conjured up by the self-interested purveyors of alarm, of a hollowed-out America with relentlessly rising unemployment, is not just false but absurd," this week's leader says.
There's always some special "new condition" which makes even supporters of free trade take protectionist measures. Previous "special cases" which reignited protectionist zeal included "the growth of cross-border capital flows, the recognition that some industries exposed to foreign competition may have strategic or network significance for the wider economy, and concerns over exploitation of workers in developing countries".
Offshoring is the same, according to the Economist, and protecting against it is costly and futile. They're concerned that offshoring is becoming a hot political issue which could lead to a new era of protectionism. Candidates on both ends of the American political spectrum are increasingly talking about protecting white collar jobs from overseas competition. News network CNN, among others, "has embarked on a rabidly anti-trade editorial agenda" according to the magazine.
Explaining the advantages of free trade, the Economist says: "If a car can be made more cheaply in Mexico, it should be. If a telephone enquiry can be processed more cheaply in India, it should be. All such transactions raise real incomes on both sides, as resources are advantageously redeployed, with added investment and growth in the exporting country, and lower prices in the importing country. Yes, trade is a positive-sum game."
They explain that sending jobs to India does not decrease the overall level of employment, it just changes its pattern. They think offshoring is no different to the invention of a labour saving device, and opposing it is tantamount to being a Luddite. While they admit that on an individual level, offshoring can cause problems, they think this should be dealt with through retraining rather than protectionism.
"Workers in manufacturing had long understood that they were exposed to the challenge of competition from overseas. Workers in services hitherto believed they were not: it is unsettling to be disabused. Also, it is true that the sheer scale of service-sector employment within an advanced economy arouses anxiety, unwarranted though it may be, about how disruptive the new forces of competition will be."
They think the disruption of offshoring in the job market is being exaggerated and that the actual number of jobs being migrated is small and likely to remain so. This is especially true when compared to the destruction and creation of jobs that every dynamic economy experiences. America loses 2m jobs a month to factors other than offshoring. Generally though, it creates more than it loses - 24m more in the 1990s.
"The best-known report, by Forrester Research, a consultancy, guesses that 3.3m American service-industry jobs will have gone overseas by 2015—barely noticeable when you think about the 7m-8m lost every quarter through job-churning. And the bulk of these exports will not be the high-flying jobs of IT consultants, but the mind-numbing functions of code-writing."
"[T]echnological and geographical constraints will continue to keep many service-sector jobs close to the customer. In some ways, in fact, this is a pity: the greater the disruption, the greater the benefits."
The jobs lost to migration will be replaced by new and better jobs, if free-trade theory and the law of comparative advantage is correct. In fact, The Economist claims this already seems to be happening.
"[J]obs will be created that demand skills to handle the deeper incorporation of information technology, and the pay for these jobs will be high. The demand for computer-support specialists and software engineers, to take two examples, is expected by the Bureau of Labour Statistics (BLS) to double between 2000 and 2010. Demand for database administrators is expected to rise by three-fifths. Among the top score of occupations that the BLS reckons will see the highest growth, half will need IT skills. As it is, between 1999 and 2003 (that is, including during the recession) jobs were created, not lost, in a whole host of white-collar occupations said to be particularly susceptible to outsourcing."