Princeton's
economics professor Alan S. Blinder is warning about disruption of U.S. life by
offshoring -- anyone listening?
(Editor's Note: Chirolas submitted this story March 29)
William Chirolas -- World News Trust
April 16, 2007 -- For the last few years we had
Nobel Prize-winning economics professor Paul Samuelson of MIT reversing his analysis on trade and
saying that free trade may not be a win-win and indeed may be
contra-indicated -- and being ignored by the GOP, but perhaps
influencing Democratic Party menbers like Hillary Clinton who voted
against CAFTA.
There has also been another famous economics professor,
Alan S. Blinder of Princeton, who while still in favor of free trade, has for the last few years been warning of the current pain, and the coming
tremendous agony, that will be cause by free trade. The solution he
wants -- more extensive government programs for displaced workers than
the few months of retraining it offers today, a U.S. education system
revamped so it prepares workers for jobs that can't easily go overseas,
and changes to the tax code that would reward companies that produce
jobs that stay in the United States -- have all been ignored by the GOP. With the
Democratic Party now in control of Congress the question that comes to
mind is will the Democrats as a party listen to either man?
In mid-2005 Blinder said, "Tens
of millions of additional American workers will start to experience an
element of job insecurity that has heretofore been reserved for
manufacturing workers." Responding to the urging of former Clinton
Treasury Secretary Robert Rubin, Mr. Blinder wrote an essay,
"Offshoring: The Next Industrial Revolution?" published last year in
Foreign Policy and reprinted in the American Prospect
. "The old assumption that if you cannot put it in a box, you cannot
trade it is hopelessly obsolete," he wrote. "The cheap and easy flow of
information around the globe...will require vast and unsettling
adjustments in the way Americans and residents of other developed
countries work, live and educate their children." His estimate of 42
million to 56 million jobs were "potentially offshorable" has been
refined over the years by ranking 817 occupations, as described by the
Bureau of Labor Statistics, to identify how likely each is to go
overseas, deriving a new estimate of 30 million and 40 million jobs
being vulnerable.
Perhaps economist David
Ricardo's 200 year old idea of "comparative advantage" will make us all
richer - eventually, but until then Samuelson and Blinder's warnings
need to be translated into US Government policy and actions. Indeed
trade treaties that include minimum wage laws, human rights,
environmental protection, and union rights would be an excellent
immediate reaction as we work on the longer term solutions proposed by
Blinder.
“Free Trade,” in D. Henderson
(ed.), The Concise Encyclopedia of Economics, The Liberty Fund, is soon
forthcoming from Blinder. "How Many U.S. Jobs Might Be Offshorable?"
CEPS working paper no. 142, March 2007.
http://www.princeton.edu/~blinder/papers/07ceps142.pdf “Outsourcing:
Bigger than You Thought,” The American Prospect, 17 (11, November
2006), pp. 44-46..
http://www.princeton.edu/~blinder/papers/06wpPreparingAmericasWorkforce.pdf
http://www.prospect.org/web/page.ww?section=root&name=ViewPrint&articleId=12150
"Offshoring: The Next
Industrial Revolution ?" Foreign Affairs, March/April 2006, pp. 113-128.
(A longer version with footnotes and references is: “Fear of
Offshoring,” CEPS Working Paper No. 119, December 2005).