Offshoring of American Jobs
It is no surprise that many fearful American workers see the call center operator in Bangalore or the factory worker in Guangzhou as a threat to their jobs. The emergence of China and India (along with other, smaller developing countries) as economic powers has doubled the supply of labor to the integrated world economy. Economic theory suggests that such a dramatic increase in the supply of labor without an accompanying increase in the supply of capital is likely to exert downward pressure on wages for workers already in the integrated world economy, and wages for most workers in the United States have indeed stagnated or declined. In this book, leading economists Jagdish Bhagwati and Alan S. Blinder offer their perspectives on how the outsourcing of labor and the shifting of jobs to lower-wage countries affect the U.S. economy and what, if any, policy responses are required.
Bhagwati, in his colorful and pithy style, focuses on globalization and free trade, while Blinder, erudite and witty, addresses the significance of labor market adjustment caused by trade. Bhagwati's and Blinder's contributions are followed by comments from economists Richard Freedman, Douglas A. Irwin, Lori G. Kletzer, and Robert Z. Lawrence. Bhagwati and Blinder then respond separately to the issues raised. Benjamin Friedman, who edited this volume (and organized the symposium that inspired it), provides an introduction.
Alvin Hansen Symposium on Public Policy at Harvard University
About the Authors
Jagdish Bhagwati is University Professor at Columbia University and External Advisor to the Director General, World Trade Organization and Senior Fellow for International Economics with the Council on Foreign Relations. He was named Distinguished Fellow of the American Economic Association in 2003.
Alan S. Blinder is G. S. Rentschler Memorial Professor of Economics and Public Affairs at Princeton University. He is the author of The Quiet Revolution: Central Banking Goes Modern and other books.
About the Editor
Benjamin M.Friedman is William Joseph Maier Professor of Political Economy at HarvardUniversity and the author of The Moral Consequences of EconomicGrowth.
"While the global crisis has brushed most topics aside, offshoring is one that that will come roaring back whether the crisis persists (and unemployment mounts) or ends mercifully soon. The notion that 40 million American jobs are up for competition from low-wage workers is simply explosive. This book provides an excellent guide to the issues, organized in the form of a lively debate. Alan Blinder sounds the alarmoffshoring US service jobs to India will cause massive disruption: unemployment, falling wages, etc. Jagdish Bhagwati, Robert Lawrence, and Doug Irwin present evidence and arguments that Blinder has oversold and oversimplified his point. People who care about 'big ideas' need to read this book and make up their own mind."
Richard Baldwin, Professor of International Economics, Graduate Institute, Geneva
"A timely and lively debate about offshoring between leading scholars in the field. Readers will feel like they are in the lecture hall at Harvard University listening to this riveting exchange, and will want to applaud at the end!"
mdash;Robert C. Feenstra, University of California, Davis
"The current financial crisis has provided momentum to anti-free-trade and protectionist thinking in response to the perceived threat to American workers posed by offshoring. This thin volume offers readers credible economic analysis of the magnitude and significance of this growing outsourcing phenomenon and should help the Obama administration to pursue sound trade and employment policies. Bhagwati, Blinder and colleagues, all distinguished economists, cover the issues clearly, thoroughly, and authoritatively without using economic jargon."
T. N. Srinivasan, Economic Growth Center, Yale University
"This outstanding volume provides an exceptional contribution to the debate on outsourcing. The two main writers, Jagdish Bhagwati and Alan Blinder are both world-class economists who combine clear and original arguments and deep insights on the subject. It will become a classic and is a must-read for policymakers, economists, scholars, or anyone who is interested in this important global phenomenon."
K.C. Fung, Department of Economics, University of California, Santa Cruz
"A provocative, entertaining, and high-level discussion of offshoring and its consequences. The debate between Bhagwati and Blinder—and the comments of a distinguished set of panel members—will bring the reader to the frontier of thinking on one of the most important policy issues of our time."
—Robert W. Staiger, Department of Economics, Stanford University
"Outsourcing has become synonymous with losses of jobs and income in the US popular debate. But the views on outsourcing among academic economists are much more diverse. Reflecting this divide, this book provides an entertaining discussion, conducted by distinguished economists, of the likely effects of outsourcing in the years to come."
Henrik Horn, Professor of International Economics, Senior Research Fellow, Research Institute of Industrial Economics (IFN), Stockholm
"This is a well-informed and brilliant debate by two experts in the field. One could not find a better analytical discussion with lively agreement and snarky contention by the authors and commentators. Not a platitude to be found."
Sylvia Ostry, Distinguished Research Fellow, Munk Centre for International Studies, University of Toronto