WASHINGTON: In case Americans have been worrying about how the war in Iraq will end or the coming of avian flu, well, relax. Here’s something they should really fret about: the future of the US economy in the age of globalisation.
For a discussion of same, let me call your attention to an article in the March-April issue of Foreign Affairs by Princeton University economist Alan Blinder. The vice chairman of the Federal Reserve’s board of governors from 1994 to 1996, Blinder is the most mainstream of economists, which makes his squawk of alarm all the more jarring.
In the new global order, Blinder writes, not just manufacturing jobs but a large number of service jobs will be performed in cheaper climes. Indeed, only hands-on or face-to-face services look safe. “Janitors and crane operators are probably immune to foreign competition,” Blinder writes, “accountants and computer programmers are not.”
There follow some back-of-the-envelope calculations as Blinder totes up the number of jobs in tradable and non-tradable sectors. Then comes his (necessarily imprecise) bottom line: “The total number of current US service-sector jobs that will be susceptible to offshoring in the electronic future is two to three times the total number of current manufacturing jobs (which is about 14 million).” As Blinder believes that all those manufacturing jobs are offshorable, too, the grand total of American jobs that could be bound for Bangalore or Bangladesh is somewhere between 42 million and 56 million. That doesn’t mean all those jobs are going to be exported. It does mean that the Americans performing them will be in competition with people who will do the same work for a whole lot less. The threat of globalisation and the reality of de-unionization have combined to make the raise, for most Americans, a thing of the past.
Also dying, if not yet also kaput, is the comforting notion that a good education is the best defence against the ravages of globalisation — or, as Bill Clinton famously put it: What you earn is the result of what you learn. A study last year by economists J. Bradford Jensen of the Institute for International Economics and Lori Kletzer of the University of California at Santa Cruz demonstrates that it’s the more highly skilled service-sector workers who are likely to have tradable jobs.
My own sense (which I develop at greater length in the April issue of the American Prospect) is that nothing short of a radical reordering of our economy will suffice if we’re to save our beleaguered middle-class majority. Every other advanced economy — certainly, those of the Europeans and the Japanese — has a conscious strategy to keep its most highly skilled jobs at home. We have none; American capitalism, dominated by our financial sector, is uniquely wedded to disaggregating companies, thwarting unionization campaigns and offshoring work in a ceaseless campaign to impress investors that it has found the cheapest labour imaginable. —Dawn/The Washington Post News Service
