Economist Alan Blinder thinks the impact of free trade is about a lot more than moving customer service jobs to India or manufacturing to China. It could very well be all about you.
Today's Wall Street Journal details the evolution on Blinder's thinking on globalization and its impact on jobs. Blinder, say reporters David Wessel and Bob Davis, sees as many as 40 million jobs being at risk of moving offshore over the next 20 or so years - more than double the number of American workers involved in manufacturing today.
What kind of jobs are at the most risk? According to Blinder, it's those that don't require a lot of face-to-face contact. What's that mean for Wall Street? To our mind it means those working in the back offices, in IT and in research, may want to begin thinking about what the job landscape might look like for them in 2017. A long way away, to be sure, but if you're 25 or 30, it's going to be the landscape you operate on.
To be sure, Blinder's thinking is deeply rooted in theory. As Wessel and Davis write:
The original Industrial Revolution, the move from farm to factory, unquestionably boosted living standards, but triggered an enormous change in "how and where people lived, how they educated their children, the organization of businesses, the form and practices of governments." He says today's trickle of jobs overseas, where they are tethered to the U.S. by fiber-optic cables, is the beginning of a change of similar dimensions, and American society needs similarly far-reaching changes to cope. "I'm trying to convince a bunch of economists who are deeply skeptical and hard to convince," he says.
Blinder wants to see American students trained for jobs that are likely to remain in the U.S.
and tax incentives developed to encourage employers to create them.
The Journal notes Blinder's thinking is far from mainstream - he's "in a minority among economists, most of whom emphasize the enormous gains from trade," the article says.
He's dead wrong," says Columbia University economist Jagdish Bhagwati, who will debate Mr. Blinder at Harvard in May over his assertions about the magnitude of job losses from trade. Mr. Bhagwati says that in highly skilled fields such as medicine, law and accounting, "If we do a real balance sheet, I have no doubt we're creating far more jobs than we're losing."