Saturday, December 4, 2004
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Back to offshore outsourcing
Keen readers of danieldrezner.com may have noticed that I haven't blogged much about offshore outsourcing since my NYT op-ed in late September. This has been for several reasons:
Well, the election is over, the book manuscript is off my desk, and a few months have passed since I've blogged about the topic. So... I'm back, baby!!
So what's been written that's worth reading on the topic since I've been away?
A couple of selections:
posted by Dan on 12.04.04 at 11:10 AM
Great stuff. Almost forgot how good you were at informing us non-economists.posted by: HispanicPundit on 12.04.04 at 11:10 AM [permalink]
Thanks for pointing out the new Corante blog, which is a very interesting source for information. I will repeat my plea that folks actually read what Samuelson recently wrote on this topic, which has been better summarized by Jadesh Bhagwati than those NYTimes reporters looking for some phony story as to doubts about free trade. Of course, the Bill O'Reilly of Mercantilists (Lou Dobbs) had an incredibly silly story on outsourcing in the pharmaceutical sector, which prompted my latest tirade over at Angrybear (Dobbs lowlight being to suggest Chiron is a UK company).posted by: pgl on 12.04.04 at 11:10 AM [permalink]
More hot air from false theory jackasses and paper professionals. Tenured, govt.employee,paper professionals, and funny money type asses.
posted by: Alex on 12.04.04 at 11:10 AM [permalink]
"This past summer, the BLS hired a Beijing-based American consultant, Judith Banister, to dig through China's mountain of incomplete and sometimes unreliable statistics. The goal: to calculate average manufacturing compensation in China in 2002 -- the last year for which data was available. BusinessWeek was given a preview of her findings, which she will present to the BLS later this month.
"Her estimate? The cost of Chinese factory labor is a paltry 64 cents an hour. Although that figure is rough, since it's pieced together from sketchy statistics, it's still the most thorough estimate ever compiled. It includes both wages and employer contributions for benefits and social insurance. And it covers not just city factory workers, who get the most attention, but the more numerous rural and suburban factory workers as well. For comparison, hourly factory compensation in the U.S. in 2002 was $21.11, and an average of $14.22 in the 30 foreign countries covered by the existing BLS report...
"Banister concluded China has about 38 million city manufacturing workers. The 30 million on whom she found data earn an average $1.06 an hour. Another roughly 71 million suburban and rural manufacturing workers earn an average 45 cents an hour, for a blended 64 cents. In the current BLS survey, Mexico's $2.48 hourly compensation is the lowest.
"Because China's living costs are low, that 64 cents buys as much as $2.96 in the U.S. Banister estimates inflation-adjusted pay in cities doubled from 1990 to 2002. (She thinks it rose outside cities, too, but won't guess how much.) She figures that between 1995 and 2002, factory jobs fell by at least 11 million in cities as state-owned enterprises shed workers, and rose some 5 million outside cities."
"Leamer and other trade experts say the resulting price competition from rising stars such as China and India could overpower any economywide gains companies get from global sourcing. They point to a famous 1968 paper by, of all people, Bhagwati, who argued that a country can be made worse off if trade lowers the price of products in which it has a comparative advantage. Bhagwati called it the "immiserating" effects of trade."
"The U.S. economy has powered ahead in large part because of the amazing productivity of America's science and technology. Yet that research is now done largely by foreign students. The National Science Board (NSB) documented this reality last year, finding that 38 percent of doctorate holders in America's science and engineering work force are foreign-born. Foreigners make up more than half the students enrolled in science and engineering programs. The dirty little secret about America's scientific edge is that it's largely produced by foreigners and immigrants."posted by: ARCHER on 12.04.04 at 11:10 AM [permalink]
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