Financial Reflections

On the heels of writing my second Contractor Rule, I found an interesting article in the Washington Post on life in the age of the global ecomony.  The author, Harold Myerson focuses on a recent article by economist Alan Blinder.

Both Myerson and Blinder make some very good points.  First, there are pretty good insights into what jobs are leaving.  A cruel part of the global economy is the fact that higher wage jobs - such as certain accounting or legal tasks - will go overseas.  And low wage service jobs, such as serving up burgers at the mall, stay on-shore.

Going to college isn’t what it used to be.  One can’t just pick a major and go with it.  One now has to wonder if the job can be done from home or not.  There’s a very good chance that if one can telecommute, one’s job can be done from overseas.

While I think the insights on high wage jobs are true, I sense that Myerson and Blinder might have missed something on the low end of the equation.  Myerson quotes Blinder as saying “Janitors and crane operators are probably immune to foreign competition.”  I don’t see that.  Foreign competitors have crept steadily into our economy on the low end - as landscape maintainers, agriculture workers and maids.

Given a few changes in the law, competitors from Mexico and elsewhere could be doing everything from serving food in the mall to filling the demand drivers in the trucking industry.  Right now, those who come to the US end up with jobs citizens don’t want.  Over time, they could take the lion’s share of better paying blue-collar work.  This “on-shore outsourcing” could bleed the bottom end of our middle class dry.

One of the key recommendations (that I agree with) is the fact that jobs that require education and customer-facing tasks will be one place where the money is in the US.  Much as geeks like me might hate leaving the glow of our computer screens, the fact is that we must avoid jobs that can be done remotely.

But Myerson also promotes unionization as part of the answer to our problems.  I’m not a big proponent of unions.  I worry that unionization will only falsely raise wages in the US further, making offshore jobs harder to resist.  Also, a trend such as globalization won’t be stopped by laws or unions.  The economics are too powerful to overcome on paper or in a picket line.  The US auto industry has fought the battle against globalization, only to see more US factory jobs lost with the recent round of GM and Ford plant closings.

In my opinion, the best way to fight is to adapt.  It’s what I will personally have to face in the future, considering my career in computers puts me on the front lines in the globalization battles.