Catherine Mann on globalization and outsourcing
The Institute for International Economics’ Catherine Mann has a great policy brief on the globalization of IT services. There’s a lot of interesting info, but the discussion of employment effects is particularly interesting: [S]tories that report dramatic movement of jobs offshore need to be put into the current economic perspective. First, these citations frequently use ...
The Institute for International Economics' Catherine Mann has a great policy brief on the globalization of IT services. There's a lot of interesting info, but the discussion of employment effects is particularly interesting:
The Institute for International Economics’ Catherine Mann has a great policy brief on the globalization of IT services. There’s a lot of interesting info, but the discussion of employment effects is particularly interesting:
[S]tories that report dramatic movement of jobs offshore need to be put into the current economic perspective. First, these citations frequently use the peak of the economy and technology boom as the base for their analysis, thus ignoring the business cycle, trend decline in manufacturing employment, dollar overvaluation, and technology bust. Second, data on international trade do not corroborate the frequent citations but rather point to sustained international competitiveness of US service providers. Table 2 shows developments in the US labor market from 1999 to October 2003. These data cut through the technology boom and peak of the business cycle but also clearly show the slow recovery in employment so far. Data confirm disproportionate and continuing employment losses in manufacturing (2.7 million or 16 percent since 1999), including production jobs in the IT sector. Among occupational categories, there similarly has been a trend decline in “management occupations,” where 1.1 million jobs have disappeared since 1999 (a 14 percent decline). In contrast, employment in the private service–providing sector increased throughout the period and is 1.5 percent higher in October 2003 compared with 1999. Employment in white collar occupations related to IT or deemed vulnerable to IT-enabled international trade, is stable and recovering (architecture and engineering occupations) or higher (computer and mathematical occupations is 6 percent higher and business and financial occupations, 9 percent higher) in October 2003 compared with 1999. Without a doubt there is offshore job activity, and the domestic labor market situation remains subdued, but job growth in many white collar occupations at home deemed particularly at risk to offshore operations is expanding, not contracting. (emphasis added)
By all means, read the whole thing. UPDATE: Cold Sping Shops has further thoughts.
Daniel W. Drezner is a professor of international politics at the Fletcher School of Law and Diplomacy at Tufts University and co-host of the Space the Nation podcast. Twitter: @dandrezner
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