Quote :

"A pair of economists have challenged the notion that outsourcing threatens U.S. service-sector jobs, arguing that headline-grabbing estimates of tens of millions of at-risk jobs ignore the positive effects of new services exports. In fact, the “hype” concerning labor markets and outsourcing is “much ado about nothing,” economists Runjuan Liu of the University of Alberta and Daniel Trefler of the University of Toronto wrote in a National Bureau of Economic Research paper posted this week. Number-crunching data from the Current Population Survey between 1996 to 2006, they found a small positive net effect on U.S. labor markets from outsourcing and what they called “inshoring” — the sale of U.S.-produced services — with China and India. The economists looked at China and India because their low-wage, high-skilled workforces make them attractive places to outsource services jobs. “Most previous studies have simply counted the number of workers who are in industries or occupations that are exposed to offshore outsourcing,” the authors wrote. “Many (but not all) of these studies then conclude from the resulting large counts that bad things must be happening to American workers,” they wrote. In a 2007 paper Alan Blinder, a Princeton professor and former Fed vice chairman, estimated that as many as 22% to 29% of all U.S. jobs “are or will be potentially offshorable within a decade or two.” And “controlling for education, the most highly offshorable occupations were already paying significantly lower wages in 2004.” The Liu-Trefler paper seems to dispute both of those findings, at least when it comes to services jobs exposed to competition from China and India. When the effects of the sale of U.S.-produced services to India and China are included, “the positive inshoring effects are either as large as or larger than the negative offshore outsourcing effects so that the net effect is either slightly positive or zero,” they wrote. In fact, if past trends continue over the next nine years in business, professional and technical services, exposed workers would change jobs less often, “would spend 0.1% less time unemployed, and would earn 1.5% more” over that period, they concluded. Liu and Trefler did note that the effects aren’t as favorable for less-educated workers. “We do not want to minimize the effect on losers,” they wrote. However, “since the small effects are precisely estimated we can say with confidence that even if service trade with China and India grows at its current clip, the labor-market implications will be small,” they wrote. Or, “to quote the Bard, much ado about nothing.” –Brian Blackstone"

http://blogs.wsj.com/economics/2008/06/10/service-outsourcing-worries-much-ado-about-nothing/

[Edited on June 11, 2008 at 7:50 AM. Reason : .]

6/11/2008 7:50:06 AM

I've been arguing basically the same thing for years now.

But who's going to believe an Indian guy claiming that outsourcing isn't hurting our economy?

6/11/2008 8:22:10 AM

^^ So what the authors are arguing is that consulting and high-grade service (as opposed to low-grade service like Bojangle's) jobs are in the United States and will always be here?

Quote :

"Liu and Trefler did note that the effects aren’t as favorable for less-educated workers. “We do not want to minimize the effect on losers,” they wrote. "

Translation: you're not wanted and you're not needed.

[Edited on June 11, 2008 at 8:27 AM. Reason : /]

6/11/2008 8:25:33 AM

michael savage would disagree

6/11/2008 8:25:45 AM

Where'd he study economics?

6/11/2008 12:07:41 PM

ive always assumed he some how studied under hitler.

6/11/2008 12:22:18 PM