Posted on 05/13/2007 6:19:03 AM PDT by mom4kittys
Alan Blinder's glittering career Ben Bernanke: another Princeton prof The turbocharged Indian economy
'You're on my list, you journalists," says Alan Blinder, eyeballing me. Oh dear. Barely 10 minutes with the economic sage and he's already warning me that I might be out of a job. The list in question is sitting ominously on the table between us like a silent exclamation mark. On it are ranged hundreds of occupations which he thinks could be obsolete in developed countries over the next generation - and, before you get too smug about a journalist getting his just deserts, be warned, you're highly likely to feature on the list, too.
Prof Blinder's message, in short, is that the fears we are currently feeling about offshoring are only the tip of the iceberg.
advertisementFrom the best accountants and lawyers to the smartest derivatives traders to teachers and lecturers, many of today's most prestigious jobs could, thanks to globalisation and improved communications technology, just as easily be done more cheaply in places such as India and China.
The result, he predicts, is that between 30 million and 40 million US jobs could go within the next generation. Bear in mind that this is around a quarter of the US workforce, and that on that basis the comparable number over here could be as much as eight million (all major Anglo-Saxon economies will be affected). It is more than a little perturbing.
"They are scary numbers," says Prof Blinder. "It's substantially higher than most other estimates."
We are sitting in his rather pokey study at Princeton, where he teaches economics and conducts research. He has had to avoid a barrage of criticism in the US press following the publication of the 40 million figure. Many leading economists reacted almost as if they had been betrayed - Prof Blinder is, after all, an American economic institution, a former deputy chairman of the Federal Reserve once touted as a potential successor to Alan Greenspan. He has now been roundly lambasted and decried as a protectionist and an opponent of free trade.
Laughing wistfully, he says: "I should have a T-shirt which says 'I love free trade'. Of course I feared this [research] might be used by the protectionists. I would not like to be thought of as an opponent of free trade. It's easy to say what you don't do about it: protectionism. It's not going to work. How do you protect yourself against foreign electrons? You can keep out tomatoes from Mexico but you can't do that."
But what is even more worrying than the stark figure of 40 million is the message this sends to parents and families. Despite what we have always assumed, having a higher-skilled, higher-paid job is not enough to protect you from being offshored. It is a notion that throws on its head many of the present assumptions about the place of the UK in the next few decades.
Gordon Brown drones on interminably about equipping future generations with the right skill sets but Prof Blinder says: "It's not enough - that's the whole point. I believe that on education the correct answer for the past 25 years was, 'give them more education'. That was good advice. For the next 25 years I'm not so sure.
"We have to think more subtly about the types of education and it's not so obvious that there's a great future in America for computer programmers, accountants and for some types of lawyers - just to take three highly-educated people.
"Lawyers involved in family disputes, and criminal lawyers - they've got to stay around. But lawyers that write contracts, and lots of accountants, maybe that kind of education is not such a fabulous idea. Educating people to go into what I call the personal services is a good idea - some of which don't require all that much education - so electricians, carpenters, plumbers, roofers - skilled trades.
"This is a very new thought for the highly-educated, white-collar class to think that they may have to compete with low-wage foreign workers. Manufacturers have been doing that for generations. But accountants, lawyers, intellectuals?
"The story's not about high and low skill, it's about high and low touch," he concludes, a trace of his native Brooklyn in his accent. "You gotta do it face to face."
Prof Blinder's mission is to reshape the way developed economies are preparing themselves for the future, and he is in a hurry. "We've got about a generation until this happens," he says. "That's why there's a kind of urgency because, if you put a five-year-old into school now, they will come out with a college degree 17 years from now. Those starting their careers today could find themselves obsolete well before the end of their career - some of them, it depends what type. To say, 'raise your sons and daughters to be lawyers', is not subtle enough advice. The question is, 'what kind of lawyer?'."
Already many of those who oppose free trade and globalisation have latched on to Prof Blinder's research, screeching that it suggests the present course of the world economy will leave many millions worse off.
The professor begs to differ, claiming that most of the lost jobs will be replaced as people retrain.
"The idea of jobs going offshore is, in the long run, a good thing. Both the countries doing the offshoring, say the US or England, and the countries to whom the offshoring goes, say India, will benefit. I don't doubt that, and that's why my T-shirt should say, 'I support free trade'. But, if there are all these jobs going, that creates a lot of turmoil.
Some occupations are safe, of course. Investment bankers, who have to take out their clients and sweet-talk them are more likely to survive than derivatives traders, who could as easily be elsewhere. Clearly, for example, most of the health profession will still have to remain in situ.
Economists are looking very vulnerable, Prof Blinder says. And as for journalists - "You're on the margins, like college professors."
Hey easy. They have to get two jobs to replace the income lost plus Mom has to hit the bricks to support the family.
Voters decide how their economy is doing. Majority wins.
Well tort reform might help in this area !!!
I would score this as an advance, not a loss.
As India becomes more prosperous, those service workers are no longer satisfied with tiny rented rooms, they want nice apartments in a better part of town, and cars to get to work. Soon they demand better pay and benefits and larger cubicles. Health care, 401K, perks.
At first the Indian outsourcers may just replace demanding workers with other new grateful ones, but eventually as the Indian economy skyrockets and they become just like us, outsourcing will become considerably more expensive.
The Indians may just have to outsource jobs back to us...in tiny cubicles, working for a pittance all night, of course.
That’s how they are destroying America; by destroying the middle class.
Then the solution is simple. Elect a democrat president and all the voters will hear for the next four years is "greatest economy in the world."
Voter perceptions are important. What is interesting in surveys over the last few years, however, is the gap between voters' assessments of their own situations vs. their perception of how the nation as a whole is doing. People are much more apprehensive about the nation's direction than their own prospects. This reflects the relentless negativity of the media during the Bush incumbency.
The same phenomenon has been true for many years with regard to crime statistics. People routinely estimate crime to be significantly higher than it is based on sensationalized reporting.
At last, a sane voice in this sea of despair. You are right on the nose. I will start worrying about "lost jobs" when we run out of work that needs to be done in this country. Since that will never happen, there being no end of things that could be done if we just had the time and energy to do them, I sleep easy.
As you point out, this is not a zero sum game. The reason outsourcing doesn't hurt us is the same reason cutting taxes doesn't hurt government. Cutting taxes frees up capital and it finds a better home. Free up people and they find something better to do. I would think that would be obvious.
Freepers: Read SamAdams76's post and forget the rest.
I don’t think the unemployment figures are any more reliable than the illegal immigration figures are. If the 4.5% unemployment figure is right I would be shocked. Since the majority if construction jobs are done by independent contractors and illegal aliens now, neither is reported in unemployment statistics. Now that homebuilding is in the tank,there is no way unemployment figures are correct. This is the first time in over twenty years I’ve seen the building business this bad in our area; even when unemployment was in the 6-7% range.
I really don’t care for other peoples “Predictions”....past, present or future....Free Trade requires a level playing field.....and our economy can’t survive under those circumstances.
America has lost its manufacturing base and is becoming a service economy....that will not support our current standard of living.
I was a manufacturing accountant (Cost) for 15 years....now my particular nitch is gone....I have been bought out or hostile take over’ed 5 times. And when I attempted to switch careers, I was too old even though I got a Masters Degree in 2001....
Additionally today’s unemployment and “Under-Employment” numbers are works of fiction.
I could go on....but I don’t have the interest or the time.
Gotta get back to flipping hamburgers.
People will vote their personal economic reality not their national perceptions. Bush was elected twice. His Iraq mistakes color his incumbency now.
I think you and samadams76 are out to lunch perhaps even on another planet.
I personally know literally hundreds of degreed people who are working in call centers making 10 bucks an hour (or less) and those same people were once making much more 10+ years and more ago.
Not necessarily. Exams could be done by a nurse, with the doctor looking at the patient via Internet hi-definition webcam.
Personal service sounds safe until you consider that you need SOMEBODY in the economy producing exportable goods & services to pay for imported goods, otherwise there will be no money to pay personal service workers.
And you gotta think that the next stage for the illegal immigrants increasingly flocking to the construction industry will involve doing plumbing and home repair. The illegal immigrant Fort Dix Jihadis had a roofing business
I have to say that an appreciable fraction of the people that I know who had good jobs 10 years ago don't now have such jobs.
Not all, certainly, and not even a majority. But enough people are either unemployed or working at jobs well below their capabilities (and well below their previous salaries) that I think it is a worrisome trend.
Closer to 90%, or so I've read.
All knowledge-only jobs will be replaced by AIs within the next 30 years.
What do you tell him to do?
Start his own business.
bump.
One good thing about sending Lawyers and Accountants over seas would be less opposition to tort reform and tax reform.
One reason we don’t do away with the income tax is because so many jobs depend on the complexity of the tax code.
Put the jobs over seas and fewer would care.
John
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