On the measurability of offshorability (25% of US jobs can be outsourced)

Vox Eu ^ | 10/09/09 | Alan S. Blinder

[TigerLikesRooster]

On the measurability of offshorability

Alan S. Blinder

9 October 2009

Fear of offshoring may force its way back onto policy agendas soon. This column uses a survey of individual workers to measure the offshorability of particular jobs and says that about 25% of US jobs are offshorable. Surprisingly, routine tasks are not more offshorable but those held by more educated workers are.

Although overshadowed by the financial crisis and the world recession right now, the debate over offshoring – that is, outsourcing work to foreign (often poorer) countries – seems poised to stage a comeback as a public policy concern in the not-too-distant future. Indeed, with so much protectionist talk and some protectionist action in the air, fear of offshoring may force its way back onto the policy agendas of the US and other rich countries sooner than we think.

It seems axiomatic that both the economically appropriate and the politically feasible policy responses to offshoring should differ depending on whether the share of the workforce holding offshorable jobs is, say, 2%, 25%, or 75%. In the 2% case, we should probably ignore offshoring as a detail of little consequence. In the 75% case, we should perhaps be seeking radical solutions to the manifold problems caused by massive job dislocations. But if a number nearer to 25% is more plausible, as argued here, the situation probably calls for certain marginal (and some not so marginal) policy adjustments – but certainly not panic. Thus it seems important to obtain a rough empirical handle on this number, slippery though the concept of offshorability may be.1

[WalterSobchak2012]

I think it comes out of a knee jerk reaction that requires that the management always be right and the workers always be analogous with UAW scum.

If I posted a list of half the stupid, short sighted and destructive things the private equity clowns who took over my former employer did I am sure I would be attacked mercilessly.

[WalterSobchak2012]

The recognition of its failure will only come after it is too late to do anything about it.

I made several trips to India as "our overseas team members" made their best effort to get our software booting on a third party reference design for which the only usable documentation was in Chinese and the original programers acrimoniously fired and unlikely to offer much assistance.

But the private equity guys were much more interested in negotiating bonuses based on having fired millions of dollars worth of salaries than the fact our new best friends in India and Taiwan had accomplished nothing and there wasn't even a working prototype let alone a commercial product.

If the India based developers were a disaster the technical support was even worse. We went from having local support in most regions to expecting our customers to call an illiterate peasant overseas who offered no assistance of value.

On my last day before retiring the company was making more revenue (not profits!) from renting empty office space than actually selling anything.