Jim Walsh's Big Hairy Weblog Thingy

Friday, August 25, 2006

In Yo' FACE, Lou Dobbs!

(Pardon the rather large cut 'n' paste, but this story comes from Yahoo! news, which tends to pull its stuff rather quickly)

From Reuters via Yahoo! News...

Despite much handwringing and political posturing, the surge of job outsourcing, by increasing productivity, has actually helped raise real wages for low-skilled U.S. workers, according to two Princeton University economists.
They countered critics of outsourcing, including high-profile CNN host [Lou] Dobbs, who charge that transferring U.S. jobs abroad hurt American workers' well being.
Taking a swing at conventional wisdom, Princeton professors Gene Grossman and Esteban Rossi-Hansberg argued that wages for the least-skilled blue collar jobs had been rising since 1997 as outsourcing boosted productivity.
The professors presented their paper on Friday at the Kansas City Federal Reserve conference in Jackson Hole, Wyoming. The meeting's theme, "The New Economic Geography," comes at a time when some fear that the United States is becoming trapped in a wages-prices spiral to the bottom by cheap labor in India and China.
The Princeton economists contend that many observers tended to gloss over the productivity benefits involved in the offshoring of labor.
They presented evidence that the productivity effect had helped raise real wages for the least skilled among U.S. blue collar workers -- those who do jobs most likely to be shipped overseas -- by about a quarter of a percent per year between 1997 and 2004.
Grossman and Rossi-Hansberg said critics of outsourcing had latched onto "incomplete" evidence that the low-wage labor abroad reduces low-skill wages or increases unemployment in the United States.
Rising productivity associated with U.S. firms' moving some tasks offshore "have served to bolster U.S. wages ... contrary to the fears of Lou Dobbs and others," they said in reference to the high-profile CNN anchorman who has waged a campaign against outsourcing of U.S. jobs. Outsourcing has also been a political hot-button issue in the United States during recent election cycles.
Those wage gains are "far from exceptional" but not as bad as might be expected based on the improvement in U.S. terms of trade with non-industrialized countries, they said.

Not that any of this will change anyone's mind; Mr. Dobbs, et. al. are not known for letting the facts get in the way while pandering to boobous americanus...

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