Alas, their tears, though salted with an abundance of kindness, are not sufficient to stem this inevitable tide, driven by cosmic market forces, which is bringing unprecedented savings to the planetary consumer.
With such wisdom and selflessness at humanity's helm, our survival for another 50 to 100 years is all but assured. What, you want more?
DRM
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Migration of Skilled Jobs Abroad Unsettles Global-Economy Fans
By BOB DAVIS Staff Reporter of THE WALL STREET JOURNAL
DAVOS, Switzerland -- Many of the business, government and academic leaders who came here for the annual meeting of the World Economic Forum, traditionally a gathering of advocates of globalization, have voiced doubts over the past few days about one of the central tenets of global economic integration.
They question whether the increasingly global economy will produce as many high-wage jobs in rich countries as once was expected.
Their concern stems from the free-trade axiom that when a rich country sends blue-collar jobs overseas, it creates opportunities back home for workers to move up the skill ladder. The more recent corollary was that sending service jobs overseas would do the same for white-collar workers back home.
But the rising number of skilled, white-collar jobs migrating from rich nations to developing countries is raising fears that, in fact, well-paid workers in developed countries will have trouble finding equally well-paid computer, design and medical jobs at home. Many of the true believers in globalization at the Davos forum, which ended Sunday, worry that outsourcing also could erode political support for free trade internationally.
"When auto-manufacturing jobs went to Mexico, we said we'd push the bar up and create better jobs," said William Daley, who guided the North American Free Trade Agreement through Congress for former President Clinton and is president of SBC Communications Inc., a San Antonio, Texas, telecommunications operator. "Can you keep going up the job chain?"
Zhu Min, general manager of the state-owned Bank of China, suggested that the U.S. does need "to reposition itself. Manufacturing is gone; services are going. Research and development is still there. [The U.S.] needs to move up the [development] chain."
Others noted that there are substantial differences between how trade affects workers in manufacturing and services. In developed countries, lofty tariff barriers to imported goods had to be whittled away before many manufacturing jobs were at risk, a process that took decades. Governments could limit the losses by reimposing tariffs. High import tariffs eliminate some of the economic argument for using lower-cost labor abroad to make goods that will be more costly as U.S. imports under those tariffs.
But service trade isn't affected much by tariffs, and can move as rapidly as the improvements in computers and communications allow. Therefore, the job loss can be more sudden.
Alarm Is Sounded
So long as manufacturing jobs were at stake, opinion leaders didn't take much note, said Dani Rodrik, a Harvard University economist. The alarm is being sounded now, he said, because "the opinion leaders are seeing their neighbors being displaced."
Many economists at Davos said the fears over outsourcing were overblown. If Indian programmers, for instance, produce software at lower prices than Americans can, that would reduce costs for the many users of information technology. As that lower-price software permeates U.S. and European companies, those companies would become more productive and more able to hire new workers. At the same time, as India and China develop economically, they would become more-lucrative markets for U.S. exports.
While the number of U.S. service workers whose jobs have been outsourced is small -- estimates range from 250,000 to 500,000 during the past three years -- the potential for further job loss is immense, all sides at Davos agreed. Brendan Barber, secretary-general of Trade Union Congress, a British labor confederation, estimated that two million service jobs could be outsourced from wealthy nations in the next five years.
In the U.S., outsourcing is increasingly becoming a political issue. Sen. John Kerry of Massachusetts, a Democratic presidential contender, is looking at tax-law changes to discourage shifting jobs abroad and requiring workers in call centers to identify the nation in which they are located. About a dozen states also are looking at putting curbs on the use of outsourcing in government contracts.
Democratic Rep. Barney Frank of Massachusetts, among several U.S. politicians at Davos this year, said the issue could hurt President Bush in Ohio and other Midwestern states. Mr. Bush's commerce secretary, Donald Evans, challenged that, saying the jobs lost so far involve "pretty small numbers."
Some of the beneficiaries of outsourcing outside the U.S. keep a wary eye on Washington. A provision in the massive spending bill Congress passed last week, though little-noticed in the U.S. media, is stirring up a storm in India, where it is seen as evidence of a backlash that will slow outsourcing. The law says that when the federal government decides to allow private companies to do work now being done by government employees, the private companies can't do the work outside the U.S. (The provision doesn't apply to work the government employees themselves were doing outside the country.)
For the past few decades, U.S. presidents have sold free trade and global integration as an economic-development strategy. Although the U.S. would lose some manufacturing jobs to developing nations where labor costs are lower, the argument went, the U.S. would gain higher-paying, higher-skilled jobs that poor nations were unable to master. Outsourcing makes that argument less compelling.
Through technology that makes communication quicker and less expensive and education that is creating pools of skilled workers in some developing countries, U.S. companies now do work abroad that once had been reserved for the U.S., Western Europe and Japan.
Software programming has been outsourced for years to India. Low-paying jobs in call centers also have been shifted to English-speaking countries around the globe. Now high-end computer-systems integration is leaving the U.S., too, as is architectural and design work.
As reported last week, International Business Machines Corp., Armonk, N.Y., plans to shift about 3,000 high-paying programming jobs to China, India and Brazil from the U.S. (See article1.)
Lower-Priced Research Talent
An official at Davos from an Indian company boasted that the company could develop drugs for far less than the U.S. and Europe could -- because of lower-priced research talent and bargain rates to run large-scale drug tests.
"We cannot protect the American people from reality," said Hewlett-Packard Co. Chief Executive Carly Fiorina, speaking at Davos. "There are many, many qualified engineers around the world who want to participate" in advanced research.
Catherine Mann, an analyst at the Institute of International Economics in Washington, has estimated that U.S. companies were able to reduce the cost of computers and communications equipment by about 10% to 30% by making the equipment in factories around the world. That lifted U.S. economic growth by about 0.3 percentage point a year between 1995 and 2002, as more companies made use of information technology. She expects similar economic gains if computer software is produced in an internationally efficient fashion.