I think that the mobility of labor is a good thing. I want the U.S. to come up with a more rational approach to immigration.
In economic terms, replacing a law against foreign workers with a guest worker program in which guest workers are taxed is the equivalent of replacing a quota with a tariff. A quota system restricts supply by putting up regulatory barriers. A tariff system restricts supply by raising the price. Tariffs are generally more efficient than quotas.
Quietly but with breathtaking speed, India and its millions of world-class engineering, business, and medical graduates are becoming enmeshed in America's New Economy in ways most of us barely imagine. "India has always had brilliant, educated people," says tech-trend forecaster Paul Saffo of the Institute for the Future in Menlo Park, Calif. "Now Indians are taking the lead in colonizing cyberspace."
I am just a layman, but the example of a job being moved offshore where the cost of living is significantly lower that Camille Roy cites seems to me to be problematic because of a LACK of labor mobility. The person starting in the high cost-of-living country winds up out of work because they are not free to relocate to the low cost-of-living country. If labor could become increasingly mobile, employers would have reduced incentives to move jobs merely for cost-of-living reasons and cost-of-living differences would narrow. Currently however moving the job offshore means a job loss, possibly despite that person's merits, because the the current holder of the job is not permitted to follow it.
Posted by Matthew Ernest on December 2, 2003 01:23 AM | Permalink to CommentCamille,
You might try emigrating from the Bay area. The tech labor market elsewhere in the U.S. is improving. The Bay area is very expensive, and those of you waiting for another dotcom bubble to lead to excess demand for software developers are going to be waiting a long time.
Camille,
There is a phrase for your predicament. It's called "tough sh*t".
For years, knowledge workers like you have bemoaned the power of unions and have trumpeted (apparently falsely) the values of libertarianism and the godlike power of markets to solve all problems. As long as your option grants were flowing in, you didn't seem to mind that the manufacturing sector in America was getting decimated. Back then, people like you were crying "tough sh*t" to the blue collar worker who was getting replaced by your technology and by workers overseas.
Now that globalization has spun around to attack your little hideaway in Palo Alto you scream bloody murder. You can't have your cake and eat it too.
Posted by mg on December 2, 2003 11:39 AM | Permalink to CommentI'll attempt not to take that 'tough s**t' comment personally, as I have never, ever been against unions and I agree that the technology field is full of idjit libertarians who in some sense are seeing the full flowering of their ideology in their own job loss. I am not one of them, however.
BUT I think there is a real failure of 'liberal' economists to think through the consequences of WTO style free-trade, and what it means for the educated American worker, in many fields, not just technology. Stephen Roach has written eloquently on this topic. What are the alternatives here? It seems to me that the assumption is made that tariffs and protectionism are so obviously destructive that voters can be persuaded that they are not in their interest. But with extensive job losses and a degradation of the American standard of living, voters will need convincing arguments. It could be that big tariffs and full scale protectionism will degrade our living standards, but free trade will degrade them even more. This is not a moral argument. Free trade is not equivalent to anti-slavery, it is only an economic arrangement, whose merits are based only in the living standards it delivers to the broad mass of voters, in this case American voters. In the long run, if Intel makes a killing, and the American technology worker goes bankrupt, free-trade is the wrong answer.
As for the suggestion that people just move to where the jobs are, I think certainly people do that when they can. Family circumstances may not permit that. Children and spouses have their own requirements to be brought to the decision.
I think if you want to pursue the free-trade free-market approach to the max, you'd have to come up with an alternative to the family, which is now a black hole of unpaid labor, but just happens to be essential in terms of producing the next generation of workers. Perhaps corportations should institute worker farms, where babies could be produced and trained, and moved freely across borders as market conditions require.
Haven't there been some sci-fi novels about this?
cheers,
camille
Wow. You see the devastation of the american software engineering workforce as a good thing? You must be one over-privleged geekster. Where I live in the Bay Area 300,000 tech jobs have disappeared in the last 3 years. During a period of unemployment last winter I took a computer science class and it was full of middle-aged long-term unemployed, lots of really bright people, one Stanford grad. 300 resumes come in for every job, around here. There have been suicides, divorces. You, precious lumpkin, are out of touch. I am actually getting out of the field (after 17 years) because frankly it sucks: wages have dropped, benefits also, security is non-existant and people are worked to the point of frantic exhaustion. You can't compete with people making 15% of what you make over there in Bangalore. And of course this society just dumps these people on the scrap heap, and the new jobs coming down the pike are pure crap... The truth is, if I could immigrate I would. I f**king hate my own country. Attitudes like yours are no help at all.
Posted by camille roy on December 1, 2003 10:49 PM | Permalink to Comment