Economics of Outsourcing
By Arnold Kling
Brad DeLong makes another attempt to explain the economics of outsourcing.
Remember: few would be worried about “outsourcing” if the U.S. unemployment rate were still close to four percent, rather than at the above six percent level that it is. To the extent that a structural cure is being proposed for what is really a macroeconomic problem, do not expect it to end well. And remember: a network-design job artificially kept in Sacramento when it could be done more cheaply in Singapore produces extra income for a network engineer in Sacramento, but has costs as well
Brad’s entire post is worth using in an economics class.
For Discussion. DeLong says that the keys to having good jobs are a high rate of saving, public infrastructure investment, and investment in education. In my essay on outsourcing, I focused on the individual’s responsibility to “be willing to do whatever work is needed, to be inquisitive, and to learn.” To what extent is the quality of one’s job the responsibility of the individual, and to what it extent is it the responsibility of public policy?