The sudden populism over outsourcing reminds me of a Chinese saying that I recently came across: "If we don't change the direction in which we are headed, we will end up where we are going."
Twelve years ago, when I taught at California State University,
Bakersfield, I assigned a class of about thirty‐five students the task
of figuring out, through rough calculations, whether Bakersfield could
compete against Bangalore, in India, when it came to call‐centers that
the local leaders were pursuing as a growth strategy. At that time,
outsourcing hadn’t entered the everyday political and cultural
vocabulary, and Bangalore was unknown to most in the United States—after
all, Thomas Friedman had yet to publicize these through his bestseller,
“The World is Flat.”
Working in teams, the students independently arrived at the same
conclusion—Bangalore will beat Bakersfield any day! My hope was that
most of the class would have understood through this exercise how their
economic futures could become increasingly dependent on developments in
other parts of the world.
Well, we have now almost ended up where we were going—economic
activities that might have generated many middle‐income jobs in the past
have migrated to other countries that are equally, or more, interested
in their development. Therefore, unemployment rates in the United States
do not seem to be coming down despite all our attempts. And, yes,
“outsourcing” is now a part of our lexicon and for which politicians
have suddenly developed a fondness.
Outsourcing economic activities to India or China or any number of
countries has made possible goods and services at remarkably low prices.
From t‐shirts to smart phones to customer support, we would have to pay
a lot more than we currently do if there were no outsourcing at all.
It is not China’s or India’s problem that we failed to change our own
direction over the years when we enjoyed the abundance of goods and
services at affordable prices. Obsessed by the internet bubble, the
events of 9/11 and then the wars, and then the housing bubble, we
continued to keep going without even attempting to alter our course,
seemingly oblivious to how the economic structures all around the world
were rapidly changing. Should we then be surprised that it has become
extremely difficult to generate gainful employment that will keep alive
the American Dream for the middle class?
Outsourcing blips only when it conveniently fits into political
calculations. Senators John Kerry and John Edwards angled for votes by
referring to outsourcing and offshoring when they were on the Democratic
ticket for the White House in 2004. Now, both Barack Obama and Mitt
Romney are talking about it, but for all the wrong reasons that don’t
seem to reflect in any way the much valued Harvard credentials they both
have. Obama beats up on outsourcing in order to imply that the Chinese
and Indians are taking away “our” jobs, which is a highly screwed up
interpretation. And Romney doesn’t seem to recognize that outsourcing
and the globalization of the economy have not translated to real
economic betterment for the middle class.
If at all, since the Great Recession, I have increased the intensity
with which I try to make students understand that any job that can be
sent to a different country will be sent, and that any job that can be
automated will be automated. Unfortunately, a captive audience does not
always mean an attentive audience.
I suppose we seem to be hell bent on making sure we will end up where we are going.