> I wrote to BLS this morning after thinking about the productivity thing.
> Phyllis Otto confirms a thought I had then: that outsourcing does affect
> labor productivity because the imported service is still cheaper than the
> one produced in house.
Right. But this is a gain from outsourcing to cheaper labor it itself. There's nothing specifically gained from the overseas aspect. It's theoretically not different from the gains from outsourcing your janitorial work to a local nonunionized contractor.
Both might be contributing significant amounts to the "productivity boom." But your (and Doug's) correction was right on the mark as to the elementary mistake I was making in my original argument: that overseas payments subtract from the aggregate national output in parallel with overseas outsourcing subtracting from the hour count.
Michael