Why Should People in the United States be Concerned About Getting Lower Cost Engineering Services?

The Wall Street Journal wants us to be worried that we will be paying less for our shoes, clothes, and engineering services. Actually, they only want us to be concerned about the last of these three, although it never tells us why.

It had an article the point of which is to warn readers that engineering is increasingly being outsourced to Asia. This may be bad news to people who hope to work in engineering, but for the rest of us, it means cheaper products, just as buying clothes and shoes manufactured abroad meant cheaper products.

The outsourcing of manufactured jobs is of course bad news for manufacturing workers and there are many more people who either work in manufacturing or could potentially if the jobs were there. In other words, the WSJ would have a much more compelling case if it warned us about the risk of losing jobs in clothing and shoe making to Asia than it does with engineering. For the overwhelming majority of people in the United States, this should mean an improvement in living standards.

overeducated cartoonist
written by Larry G, January 17, 2012 7:24 PM

"For the overwhelming majority of people in the United States, this should mean an improvement in living standards."

Even if we're all flipping burgers because our jobs are outsourced?

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written by TVeblen, January 17, 2012 8:02 PM

And by that logic we'd all just have a drop more utility if Dean took, say, oh a 20% pay cut. Really, Dean, I think you've played this tune out way too long. We can argue about how large the pay premium should be for different occupations, but don't kid youself that the same logic won't apply to your own situation.

-1

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written by rootless_e, January 17, 2012 8:03 PM

To me it's fascinating to see a whole generation of "liberal" economists who have never heard of Seymour Melman, don't have the faintest idea how industry operates, and cling to an outdated free trade orthodoxy like it's life support -all while complaining that the President is not "liberal" enough for them. It's like watching flat earth mapmakers complain that round the earth mariners are doing it wrong.

-1

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written by ralston mctodd, January 17, 2012 8:13 PM

I respect what you're trying to do here, Dean, but the fact is that engineers have long been in the group of workers whose jobs the WSJ is quite happy to see outsourced (along with manufacturing workers, but not doctors and lawyers). That's why they've been running all those articles about the phony "STEM talent shortage" for the last decade.

Wouldn't this be a good time
written by Brett, January 17, 2012 8:31 PM

To point out a lower dollar might help reverse this trend?

Baker Sneaks in Another White Collar Protectionist Smear
written by izzatzo, January 17, 2012 9:22 PM

In other words, the WSJ would have a much more compelling case if it warned us about the risk of losing jobs in clothing and shoe making to Asia than it does with engineering.

Exactly. If everybody is buying and selling it domestically then one who makes shoes or clothes is no worse off as long as they can be consumed as imports with prices low enough to offset the lost job earnings and benefits.

If only a few are selling it but many are buying it then many more consumers experience higher net gains since most retain their jobs along with lower import prices - only the few sellers are net losers.

The WSJ is obviously concerned that outsourced engineering jobs don't achieve the same Pareto Optima outcome as outsourced manufacturing jobs
that made no one worse off and at least 1% better off.

Despite Baker's attempt to paint the WSJ as
whining about domestic white collar professionals forced to compete globally as they stand naked and trembling to face the competition absent a protectionist shield, the WSJ gets it right again.

Stupid liberals.

Pay for Economists
written by Dean, January 17, 2012 9:38 PM

TVeblen,

I absolutely want wages for economists to drop and I am all for more trade to bring about this outcome. They are hugely overpaid. Most of them are clueless.

How About Imported Workers?
written by The OutSourced One, January 18, 2012 12:32 AM

Dean,

What is your take on firms that import workers into the US claiming that they cannot find sufficiently skilled workers here?

Firms Want Cheaper Workers
written by Dean, January 18, 2012 6:58 AM

Outsourced One,

there are workers here they can hire -- they can pull workers away from their competitors. That is the way markets are supposed to work. They get workers from overseas to get cheaper workers. When they say otherwise, they are not telling the truth.

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written by liberal, January 18, 2012 7:24 AM

rootless_e wrote,

To me it's fascinating to see a whole generation of "liberal" economists who have never heard of Seymour Melman, don't have the faintest idea how industry operates, and cling to an outdated free trade orthodoxy like it's life support -all while complaining that the President is not "liberal" enough for them.

To me it's fascinating how for some blog commenters it all comes down to whether or not someone utters something that could be perceived as a slight of Obama.

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written by freebird, January 18, 2012 8:58 AM

So firms hire from overseas to get cheaper workers, isn't this the same reason consumers buy from Walmart? Not all competitors sit on the same side of the border, and those with access to cheaper labor (skilled or otherwise) may have an advantage all else being equal. In my view the unimpeded flow of goods and services is the way global markets are supposed to work. I'm with you that the "protected classes" need to become exposed to the same dynamics as everyone else.

The "protected classes" are already exposed...
written by Hypoxia Smith, January 18, 2012 1:34 PM

Indeed, the striptease is well on its way:

http://www.slate.com/articles/technology/robot_invasion/2011/09/will_robots_steal_your_job.html

It's not that hard to look up
written by rootless_e, January 18, 2012 10:04 PM

Dear "liberal" :
If the "left" critics of Obama appeared to have read Galbraith, Melman, Mills, Gintis, or anything at all out of the mainstream of orthodox economics, you'd have a case. But,it turns out that despite paper wizard economics, if your country only produces financial engineering and scrap metal, living standards of the majority decline.

Why Should People in the United States be Concerned About Getting Lower Cost Engineering Services?

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