Excellent discussion today on Brad DeLong's weblog about free trade and offshoring. I'm one of the people who saw their jobs go to Bangalore, but I believe Jeff Gould is right to say
Roach and the other miss the point by assuming that if somehow offshore weren't a factor then the displaced domestic IT workers would still have their jobs. This is false. Most of the job losses were going to occur anyway as the late 90s bubble deflated. Like I said, at these prices customers just don't need any more software.
Update: Kash over on the Angry Bear weblog raised an excellent point:
Jobs that face no international competition, such as courier services, rail transportation, and various wholesalers, have disappeared just as fast as (or faster than) jobs in software publishing, accounting, and research and development, which are supposed to be the major victims of outsourcing.
The comment thread again is interesting. I want to add a couple of personal reactions.
Yes, IT workers have been training their own replacements. (By the way, employment is usually at will in the U.S., so you can walk away from the severance package. I did, deciding that it was more important to get another job.) That doesn't say anything about what would have happened if there were no outsourcing. If an employer has to cut costs, jobs are likely to go one way or another.
It's not just tier one support or call centers that are being moved offshore.
It's probably more true to say that a lot of jobs associated with the
back office
, not the money-making parts of companies were
particularly vulnerable.
It will be more interesting to see what happens during the economic recovery. Will the job market for software engineers improve as much as the market for (say) couriers and messengers? If so, how is the work going to be divided between the U.S. and other countries?