Business Channel 2007-04-01&03

Mr. Alan Blinder is a big free-trade proponent 1. He is perhaps rethinking his position, (从jeff处借鉴得来~ ) partly because free-trade could see the eventual 2 outsourcing of some 40 million American jobs. I just wanted to emphasize that, because it is so many. Blinder is a professor of economics in Princeton University and former vice-chair of the Federal Reserve.

Professor Blinder, it's an honor to have you with us. Thank you very much.

Pleasure.

I, I was reading, uh, the story the Wall Street Journal wrote about you this morning. And that number is, is truly what made our jaws 3 drop here at CNBC, ah, that 40 million American jobs could be outsourced. As a percentage of the current number of American jobs, that is 25 percent of American jobs.

Right, more. Can I just clarify that one moment?

Yes, please.

The 40 million is an outside estimate of the number of jobs that might conceivably be threatened by competition from abroad, so potentially offshorable.

So all like either sends off shore or lost? (Not in yet, not.)

Yep, but well, that would come into competition with foreign labor 4. But that not all of those would go offshore 5. For example, think about the tax on automobile 6 and steel industries now in America. All of those workers are in competition, fierce competition with foreign workers. But a lot of those jobs are still here in the United States.

Right, so we are getting, you may lose your job or down with pressure on wages, benefits the whole process.

Yes, exactly.

So, so where do you see this, this being focused? This job loss or, or wage decrease that Americans are going to find.

Yeah. I think the interesting part of it is that if you look back in the, in past history, it's been concentrated of course in manufacturing industries like those that I just mentioned. But I think as you look forward, one of the dominant 7 forces, if not the dominant forces, it's gonna be the electronic delivery of services, including upper-end services, computer programming, manuscript editing, science, accounting 8, all kinds of things like that that can come from foreign countries and be delivered over the internet or by telephone or in other electronic ways.

Alright, I, I, we have invited Jagdish Bhagwati whom, I, I know you know him very well on the program. (I do) Unfortunately, he, he was unable to join us, but he was quoted in the Wall Street Journal today as saying this about your estimates.

I saw.

I know, right, so you're chuckling 9. But here's what he said, "if we do a real balance sheet, I have no doubt that we are creating far more jobs than we are losing."

I am, first of all, very dubious 10 if that's the case now, although as just, uh, statements suggest we don't have any good datas, so we do gain some jobs from this process as we do lose some. My guess is the balance is negative now, but I am not so sure about that. But what I am trying to call attention to is what’s likely to happen as the technology improves over the next ten years, twenty years.

You are talking about the future.

I am.

And he is talking about the present. Alright, I hear you on that now. But does this change, what is considered the Bible of economics and that is, tariffs 11 are a bad thing, subsidies 12 are a bad thing. Does that change any of that? Should we be putting trade protections in place to protect the American jobs?

I don't believe so. No, I don't think it changes that aspect of the Bible at all. There's a bad chapter of the Bible that often gets ignored, which is that trade creates winners and losers and the proper functioning government ought to do something to help the losers.

Well, how do we do that? How do we, how do we solve this problem in losing 40 million jobs, a quarter of the workforce 13, whether we lose them, or have wages fall. I mean that would cause a revolution. That happened.

Potentially, that's why I am calling attention to it, also the answer to your question, none of which are great. I don't think we have any fabulous 14 answers to this or things like improve the social safety net. We have something called trade adjustment assistance. These programs are very small, not so good. They don't function that well. A lot of people don't know about them. Beyond that, we have the broader social safety net of unemployment insurance. There are some new promising 15 ideas like wage-loss insurance for those cases that you were just alluding 16 to, or people that, ah, lose their wage rather than, uh, lose their jobs. Portability of healthcare, portability of pensions, earned income tax credit, a whole bunch of things like that that we could do better in the United States than we do.

Alright, Professor Blinder, thanks very much for joining us.

You're most welcome.

NOTES:

1. offshorable

adj. Capable of being moved to another country, especially to reduce costs; capable of being performed by a person in another country, especially at a lower wage or salary.
—offshore v.
—offshoring pp.

2. outsource

To send out (work, for example) to an outside provider or manufacturer in order to cut costs.


3. portability

Ability of employees to retain benefits from one employer to the next when switching jobs. The term is most frequently used in connection with pension and insurance coverage 17. Credits earned towards pension benefits in a Defined Benefit Pension Plan are rarely portable from one company to another. Conversely, accumulated assets in a Defined Contribution Pension Plan may be transferable to the defined contribution plan of another employer through a rollover. Under the Consolidated 18 Omnibus Budget Reconciliation 19 Act (COBRA), employees have the right to carry their group health insurance coverage with them to a new job for up to 18 months. An employee may wish to do so if the new employer's health plan is inferior to the previous employer's plan. Employees choosing to continue coverage with a previous employer's group plan under the COBRA provision pay the full premium 20, which is subject to change. Generally, this continued coverage costs considerably 21 less than a policy at individual rates.