The exportation of jobs "will create bigger markets and opportunities to sell goods and services from the developed economies," says reader Suman Das. "This is indeed very troubling, as the classic answer of 'retrain those who lost jobs for higher paid jobs' begins to fall apart" with increased training times and more rapid changes in international job markets, according to Michael Lindsey. "We're headed for a two-tier economic society..." says Mike Dorkoski. While Brad Leach opines, "The real question is how to deal with the disproportionality of this impact: the broad, shallow, positive impact on product prices versus the narrow, deep, negative impact on individuals."
These quotes help sum up the nature of the thought-provoking debate stirred by this month's column. On the one hand, arguments based on accepted macroeconomic theory generally came down in support of the free exportation of jobs, regardless of how imperfect labor markets are in comparison with markets for capital, goods, and services. Those arguing for some kind of intervention in this market activity cited the negative impact on jobs and people (especially their self-esteem), increasing long-term disparities in incomes, a negative impact on the ability of disadvantaged workers to invest, and an ultimate decline even in economic activity in net job-exporting countries. Some argued that these phenomena were irreversible. Others suggested that even if painful, they were transitory. As Sudip Sen put it, "The 'export' of any activity, be it manufacturing or service outsourcing, is driven by pure economics. True, it has a social and political impact; but more often than not the latter adjusts against the former and not vice-versa."
The pattern of responses did not correlate well with country of origin. One interesting example concerned fears about the two-tiered economy created by job exportation. Before concluding, "These trends cannot be stopped by any government," A. J. Balasubramanian pointed out that due to job importation, "In India, we are creating two different societies with a large disparity in income as well as access to knowledge and information."
In large part, the comments seemed to reflect reactions to both differences in the fluidity of markets for capital and labor as well as the increasing fluidity in markets for labor fueled by dramatic improvements in communication. Those with a global, macro economic view tended to regard these developments as long overdue. Those concerned about the psychological and social impact of job exportation on people and communities emphasized the need of some kind of intervention ranging from increased job training to incentives to those organizations willing to restrict the flow of jobs. Dan Barr's comments suggest that the issues raised create a false dichotomy (something of which I would never want to be accused). As he said, "The productivity improvement that I am familiar with seems to always create jobs and grow companies and countries." What do you think?