Race to the bottom

I have a confession to make. My father helps outsource jobs to low-cost countries, and given my political sensibilities, visits home can get quite interesting.

I often wonder whether offshoring advocates (such as my father) would be as likely to support this growing trend if their own jobs were threatened. The answer is: of course not.

Many Americans have long taken comfort in the fact that their jobs were unlikely to be outsourced. From 2000 to 2005, more than 3 million manufacturing jobs have been shipped overseas while skilled labor has remained relatively unscathed.  
Indeed, by many accounts, free trade has benefited college educated individuals while hurting everyone else. It has increased wages for those with a four-year university degree by about 3 percent and lowered wages for all other workers by about 4 percent.

But if the financial crisis has taught us anything, it’s that greed drives capitalism. Corporations are increasingly moving jobs overseas in a bid to exploit cheap labor, scant regulations and tax loopholes. No one is safe anymore, including us journalists.

In a recent commentary, New York Times columnist Maureen Dowd noted smaller American newspapers are replacing their workforce with Indians more than 7,000 miles away. Citing monetary concerns, one online newspaper publisher estimated that while his American employees made $600 to $800 per week, Indians are paid just $7.50 for 1,000 words.

For the record, that sum is paltry and it raises the question: How does this affect the quality of writing? Surely, if the Indiana Daily Student suddenly outsourced its opinion page to Bangalore, you’d miss us, wouldn’t you? There is something to be said about the difficulties in translating cultural institutions and practices when one is alien to the culture being reported.

Journalism is hardly the latest field to experience the destructive effects of offshoring. In reality, if Americans knew the extent to which foreigners regulated our lives, we would be outraged. Hospitals now outsource X-ray readings to companies in India.

Several law firms and companies with in-house legal counsel are sending some of their more routine work to lawyers in India as well.

There are some who will argue that globalization is lifting millions out of poverty. Others will claim that competition is good for us because it increases wages here at home as well as abroad. On the former point, there is evidence to show that internal forces regarding domestic policy and population changes are driving wealth creation in India, not globalization. As for the latter, income inequality has increased in developed and developing countries as a result of globalization, which has started a race to the bottom.

Politicians, media pundits and intellectuals have long been content knowing their jobs were not at risk as globalization increased. But as barriers break down, skilled workers are joining the millions of unemployed blue collar workers in calling for a stop to globalization – and not a moment too soon.