> >That underscores another aspect of America's recent productivity
> >miracle: the growing use of overseas labor.
>
> For what it's worth, a BLS economist told me that outsourcing has little
> effect on the productivity stats, since nondomestic output doesn't
> appear in the numerator, just as nondomestic input doesn't appear in the
> denominator.
I'm not sure I understand the BLS's argument here. I mean, isn't tech support the paradigmatic example of overseas outsourcing? Well in that case, isn't the service transaction happening "here," domestically, just as much as it was before the outsourcing? The person purchasing the service is in a US domestic location, and receiving it and applying it at that location.
Now, if I'm understanding correctly, Dell's productivity in selling computers is the total number of units they move divided by the total number of people they employ. Tech support is part of that equation, no? Insofar if you reduce it too far, you move fewer computers. So if they outsource 2000 jobs, aren't they moving the same number of units but having it divided by that many fewer people they officially employ? And nationally, that many fewer people that the country employs?
Or take office services. If you are maintaining software for banks in the US, and half your development and bug-fixing team is based in Bangalore, doesn't that make the other half show up as twice as productive? Since it's maintaining the same number of banks here in the states but with half as many people?
Similar points could be made for software development & investment banking. In fact I can't think of an internationally outsourcable service for which it wouldn't be true. For a service to be outsourcable, it seems it has to be a service that stays "here" while the body leaves -- and isn't counted in the national tally of working bodies.
What am I missing?
Michael