There is a very interesting article in this week's Business Week about outsourcing ( link:
http://www.businessweek.com/magazine/content/04_49/b3911408.htm ). It talks mainly about how some economists are now starting to beleive that a global economy might not benifit the United States as much as previously thought -- in fact, it may harm us.
Previously, it had been thought that low skilled jobs which were outsourced would hurt relatively few workers, while the benifit to the whole country would be far greater in terms of lower costs for products; the Walmart revolution.
What economists had previously not accounted for, however, was the ever-increasing amount of high-skilled labor that would be outsourced. Now that countries like India are pumping out as many educated college graduates as we are, if not more, Americans have more competition. This is because of new communications technologies like the internet, that no longer have geographical restraints on high skilled labor. For example, my father was a software developer. He made about 70 thousand a year, until he was laid off a few years ago. The job he did for that much money can be done by people in China or India for much cheaper. Now he can barely get a job at a supermarket. Sure, our software is cheaper, but at what cost to the American family?
What the U.S. didn't take into account when we joined the WTO and NAFTA is these high-skilled jobs going abroad as well as manufacturing jobs.
The article goes on to suggest that perhaps outsourcing IS good for our country - in terms of GDP, but who does the benifit really go to?
A second concern is how much of the gains from trade will flow through to U.S. consumers. Until now the pain of globalization has been borne by less than a quarter of the workforce, mostly lower-skilled workers, whose wage cuts outweighed the cheaper-priced goods globalization brings. But the other three-quarters of American workers still came out ahead, since they weren't affected by foreign wage competition. If blue- and white-collar employees alike are thrown into the global labor pool, a majority of workers could end up losing more than they gain in lower prices. Then the benefits of increased trade would go primarily to employers. "It's entirely possible that all workers will lose and shareholders will gain; you have to be concerned about that," says Harvard University trade economist Dani Rodrik.
This is what we should be worried about. Our president can keep saying the economy is strong, the economy is strong, and he may be right, but middle class workers will not be the ones to benifit from the strong economy.
If white-collar offshoring swells enough, the resulting job losses could undercut a large swath of U.S. consumers. In part, this is a question of scale. There's little doubt that globalization is likely to continue to cut into the country's 14.5 million factory hands. Add in 57 million white-collar workers suddenly facing global competition, too, and more than half the U.S. workforce of 130 million could feel the impact. Then, economists conclude, the benefits of globalization would flow mostly to companies and shareholders who profit from the cheaper labor, with little pass-through to workers and consumers. "If a majority of Americans have lower wages from outsourcing, then capital would be the prime beneficiary, even if U.S. GDP goes up," says Harvard's Freeman.
I personally think that we should give other countries a fair chance to compete with us. I think free market economics shouldnt only apply to the U.S., it should apply to everyone.. even if it makes our standard of living lower.