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Strategies & Market Trends : China Warehouse- More Than Crockery -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (263)	8/10/2003 11:46:27 PM
From: RealMuLan	Read Replies (1) \| Respond to of 6370

Commentary: Outsourcing Jobs: Is It Bad? An accelerating pace is raising concerns over its effects. Two BusinessWeek economists debate whether that's good or bad These are anxious times for U.S. workers. Sure, the recovery seems to be getting under way. Yet hardly a week goes by without another report of a batch of high-paying, white-collar jobs getting exported to far cheaper locales such as India, China, or the Philippines. In mid-July, IBM (IBM ) set off a firestorm when news of its plans to move more white-collar jobs overseas was leaked to The New York Times. And news service Reuters announced on July 28 that it will move 600 or so jobs from New York, as well as dozens of other slots in England, Scotland, and Singapore, to its operations in India. As white-collar jobs move away with increasing regularity, a debate that once focused on the loss of manufacturing to foreign outsourcing is once again raging: Just how serious for America, its workforce, and its economy is the shift? Two decades ago, the loss of auto jobs and other high-paying manufacturing jobs sparked fears of a hollowing-out of the U.S. economy. Yet painful as the loss of those positions were, strong economic growth and innovation created far more -- and better -- jobs to replace them. Now, the same process, many economists argue, is going on in services. Yes, some individuals are losing out as well-educated programmers or engineers can do the same job for far less halfway across the globe. But as the U.S. economy evolves, innovation will create new high-paying jobs. Others, though, argue that the outsourcing of highly skilled service jobs is fundamentally different -- and poses greater risks for the U.S. economy. How worried should we be? Here are two opposing views: YES... This is no longer about a few low-wage or manufacturing jobs. Now, one out of three jobs is at risk Economic evolution is inevitable. Companies will always pursue the lowest-cost structure, which means less skilled work will move out of the U.S. to emerging economies. And that's a good thing, because living standards around the world will rise. Workers in developing nations will get new and higher-paying jobs, and consumers in the U.S. will be able to buy products that are cheaper than if they were made at home. The shift first occurred in textiles and other manufacturing jobs, followed by low-end services such as telemarketing and data entry. Now, it's moving up the labor food chain, leaving white-collar workers increasingly nervous. BBB By Kathleen Madigan Business Outlook Editor Madigan still believes in free trade. -------------------------------------------------------------------------------- ...NO America's strongest suit is innovation, which will always create new high-paying positions Think of the world economy as a ladder. On the bottom rungs are the countries producing mainly textiles and other low-tech goods. Toward the top are the U.S. and other leading economies, which make sophisticated electronics, software, and pharmaceuticals. Up and down the middle rungs are all the other nations, manufacturing everything from steel to autos to memory chips. ... Where will the next big innovation come from? It could be telecom, or biotech, or energy. Nobody knows. Nobody knew in 1994, either, when real wage growth was still slow, unemployment was above 6%, and the Netscape Communications Corp. initial public offering, which marked the start of the Internet Revolution, was a year away. The biggest danger to U.S. workers isn't overseas competition. It's that we worry too much about other countries climbing up the ladder and not enough about finding the next higher rung for ourselves. By Michael J. Mandel Chief Economist Mandel writes about innovation and economic growth from New York. businessweek.com