Seeing the Whole Iceberg

David Wessel and Bob Davis wrote an article in March for the Wall Street Journal (WSJ) that ran in a similar form in the Educational version of the publication last September (the education version can be found here; it's slightly different but has the same message). Both versions of the article, called "A Very Big Iceberg," focus on Alan Blinder, economics professor at Princeton. Mr.Blinder, an MIT grad, has been with Princeton since the 70s and claimed in 2001, "Like 99% of economists since the days of Adam Smith, I am a free trader down to my toes..." Having helped to "sell" NAFTA along side Bill Clinton, it appears to me (when this article and that fact are taken into consideration) that Mr.Blinder is not so much pro-trade as he is pro-bureaucracy. This makes me wonder where on his body his toes are located.

"Mr. Blinder began to talk about this in public. At a foreign-affairs forum in January 2005 he called "offshoring," or the exporting of U.S. jobs, "the big issue for the next generation of Americans." Eight months later on Capitol Hill, he warned that "tens of millions of additional American workers will start to experience an element of job insecurity that has heretofore been reserved for manufacturing workers."

Last year, Mr. Blinder wrote an essay, "Offshoring: The Next Industrial Revolution?" that was published in the journal Foreign Policy. "The old assumption that if you cannot put it in a box, you cannot trade it is hopelessly obsolete," he wrote. "The cheap and easy flow of information around the globe...will require vast and unsettling adjustments in the way Americans and residents of other developed countries work, live and educate their children."

In that paper, he made a "guesstimate" that between 42 million and 56 million jobs were "potentially offshorable." Since then he has been refining those estimates, by painstakingly ranking 817 occupations, as described by the Bureau of Labor Statistics, to identify how likely each is to go overseas. From that, he derives his latest estimate that between 30 million and 40 million jobs are vulnerable.

He says the most important divide is not, as commonly argued, between jobs that require a lot of education and those that don't. It's not simply that skilled jobs stay in the U.S. and lesser-skilled jobs go to India or China. The important distinction is between services that must be done in the U.S. and those that can-or will someday-be delivered electronically with little loss of quality. The more personal work of divorce lawyers isn't likely to go overseas, for instance, while some of the work of tax lawyers could be. Civil engineers, who have to be on site, could be in great demand in the U.S.; computer engineers might not be."

A. "Guesstimate" is an invented word, I believe the one they might be looking for is "estimate" which you can in fact find in the dictionary (definition of estimate here and you might notice that if you search for "guesstimate" on Google you get a link to an Urban Dictionary page, among other things).
B. How is "potentially offshorable" defined? (for the record, "offshorable" is not a word either) When considering "offshorability" you can't just say that something is offshorable because it's possible that it could be done overseas. There are lots of jobs that people in the United States would want done by someone else in the United States. For example, if you're getting a divorce, you're going to want your divorce lawyer to live in your city, not in New Delhi. The very basic bottom line is that there will always be consumers who want face time (without plane travel involved) and so we'll never get to a point where everything can be done overseas as such alarmist articles as this imply.
C. Now for the mushy: Why do our computer engineers deserve those jobs more than computer engineers overseas? Idealistically, with dreamy eyes, Americans want everyone to get along. We claim that everyone is "created equal" but then turn around to complain when some of our jobs go overseas. Is everyone created equal? Or are all Americans equal? I'm pretty sure the phrase says "everyone."
D. The industrial Revolution was a pretty good thing; without it computer engineers wouldn't exist because we never would have come this far. Complaints about offshoring look backwards, shouldn't we look forward?

"Diana Farrell, head of the McKinsey Global Institute, a pro-globalization research group that has done its own analysis of vulnerable jobs, calls Mr. Blinder "an alarmist" and worries about the impact he is having on politicians, particularly the Democrats who see resistance to free trade as a political winner. She insists that many jobs that could go overseas won't actually go. Ms. Farrell says Mr. Blinder's work doesn't take into account the realities of business, which make exporting of some jobs impractical or which create offsetting gains elsewhere in the U.S. economy.
Mr. Blinder counters that he is looking even further into the future than McKinsey-10 or 20 years instead of five-and expects more technological change than the consultants do.
Mr. Blinder says there's an urgent need to retool America's education system so it trains young people for jobs likely to stay in the U.S. Just telling them to go to college to compete in the global economy is insufficient. A college diploma, he warns, "may lose its exalted 'silver bullet' status." It isn't how many years one spends in school that will matter, he says; it's choosing to learn the skills for jobs that cannot easily be delivered electronically from afar."

My first instinct is to say "if you can't stand the heat, don't be a chef, get out of the kitchen, and give someone else a shot," but something else about this disturbs me more:
While I do think Mr.Blinder is an alarmist, more importantly, I think the writers of this article are alarmists. Everything I've quoted above was from the educational version of the WSJ, and while I wish it weren't true, students are easily alarmed and directly mentioning education in this article was a mistake. Most students who read this article aren't doing independent research and making up their own minds; they read this article because a teacher told them to, the teacher advocated what was being said out of enthusiasm for their subject, and the students internalized it, end of story. Those students leave that classroom in fear that they won't be able to get a job when the time comes. They panic, quietly and privately, but they panic and it's on their mind for a while. Maybe it just distracts them a little bit, or maybe it really deeply affects them and they decide not to go to college because they think it won't matter. Sure, that's an extreme case, but adolescence is a time for extremes. What hurts the American job market? Subpar workers. What creates subpar workers? Few educational opportunities (or few people taking advantage of the chances they have), lack of motivation and fear of a lack of compensation. What creates those things? Popular sentiment, just like anything else. Perception is reality and if we think that all our jobs are offshorable, eventually they all will be. It isn't free trade that damages the American job market, it's a bad perception of free trade.