Offshoring of American Jobs ─ What Response from U.S. Economic Policy?

It is no surprise that many fearful American workers see the call center operator inBangalore or the factory worker in Guangzhou as a threat to their jobs. The emergence of China andIndia (along with other, smaller developing countries) as economic powers has doubled the supply oflabor to the integrated world economy. Economic theory suggests that such a dramatic increase in thesupply of labor without an accompanying increase in the supply of capital is likely to exertdownward pressure on wages for workers already in the integrated world economy, and wages for mostworkers in the United States have indeed stagnated or declined. In this book, leading economistsJagdish Bhagwati and Alan S. Blinder offer their perspectives on how the outsourcing of labor andthe shifting of jobs to lower-wage countries affect the U.S. economy and what, if any, policyresponses are required. Bhagwati, in his colorful and pithy style, focuses on globalization and freetrade, while Blinder, erudite and witty, addresses the significance of labor market adjustmentcaused by trade. Bhagwati's and Blinder's contributions are followed by comments from economistsRichard Freedman, Douglas A. Irwin, Lori G. Kletzer, and Robert Z. Lawrence. Bhagwati and Blinderthen respond separately to the issues raised. Benjamin Friedman, who edited this volume (andorganized the symposium that inspired it), provides an introduction.

Perez Zagorin is Joseph C. Wilson Professor of History Emeritus at the University of Rochester and a Fellow of the Shannon Center for Advanced Studies at the University of Virginia. He has been a Fellow of the American Academy of Arts & Sciences since 1976.