Jan 06
9
US Economy
Leave a comment »
Stephen Roach from Morgan Stanley has a sharp eye on the real story
unfolding in global economics, and the US in particular. Today he
focuses on sifting the truth from the latest US labor figures.
“Globalization and the powerful cross-border labor arbitrage it has spawned has turned the US US
employment hit another record low as 2005 came to an end — down to
10.6% of total nonfarm payrolls, or about one-third the share
prevailing as recently as 1970. At the same
time, employment and compensation is being squeezed in services as
well, where offshore outsourcing is moving rapidly up the value chain. The speed of this transformation is what’s so daunting.
Just five years ago, white collar outsourcing was confined to data
processing and call centers; today, courtesy of IT-enabled
connectivity, it has moved to the upper echelons of the
knowledge-worker hierarchy — software programming, engineering,
design, doctors, lawyers, accountants, actuaries, business consultants,
and financial analysts. The Internet is living up to its reputation of being the most disruptive technology in the history of the world.“
employment hit another record low as 2005 came to an end — down to
10.6% of total nonfarm payrolls, or about one-third the share
prevailing as recently as 1970. At the same
time, employment and compensation is being squeezed in services as
well, where offshore outsourcing is moving rapidly up the value chain. The speed of this transformation is what’s so daunting.
Just five years ago, white collar outsourcing was confined to data
processing and call centers; today, courtesy of IT-enabled
connectivity, it has moved to the upper echelons of the
knowledge-worker hierarchy — software programming, engineering,
design, doctors, lawyers, accountants, actuaries, business consultants,
and financial analysts. The Internet is living up to its reputation of being the most disruptive technology in the history of the world.“
Sometime in the next 24 months maybe we will find that the Internet is
not a disruptive technology but a destructive technology. Certainly
with respect to the social contract that has been in place for the last
hundred or more years – between labour and business initially and then
between countries…. as China demands the same living standards as the
West, followed closely by India…