Friday, May 11, 2007
"It will be interesting to see the smug 'liberalism' of the middle classes evaporate as they get hit in the pocket." RH
Outsourcing - the middle classes begin to get afraid
The future's bright . . . but not for lawyers and accountants
By Edmund Conway
'You're on my list, you journalists," says Alan Blinder, eyeballing me. Oh dear. Barely 10 minutes with the economic sage and he's already warning me that I might be out of a job.
The list in question is sitting ominously on the table between us like a silent exclamation mark. On it are ranged hundreds of occupations which he thinks could be obsolete in developed countries over the next generation - and, before you get too smug about a journalist getting his just deserts, be warned, you're highly likely to feature on the list, too.
Prof Blinder's message, in short, is that the fears we are currently feeling about offshoring are only the tip of the iceberg. From the best accountants and lawyers to the smartest derivatives traders to teachers and lecturers, many of today's most prestigious jobs could, thanks to globalisation and improved communications technology, just as easily be done more cheaply in places such as India and China.
The result, he predicts, is that between 30 million and 40 million US jobs could go within the next generation. Bear in mind that this is around a quarter of the US workforce, and that on that basis the comparable number over here could be as much as eight million (all major Anglo-Saxon economies will be affected).
It is more than a little perturbing. "They are scary numbers," says Prof Blinder. "It's substantially higher than most other estimates."
We are sitting in his rather pokey study at Princeton, where he teaches economics and conducts research. He has had to avoid a barrage of criticism in the US press following the publication of the 40 million figure. Many leading economists reacted almost as if they had been betrayed - Prof Blinder is, after all, an American economic institution, a former deputy chairman of the Federal Reserve once touted as a potential successor to Alan Greenspan.
He has now been roundly lambasted and decried as a protectionist and an opponent of free trade. Laughing wistfully, he says: "I should have a T-shirt which says 'I love free trade'. Of course I feared this [research] might be used by the protectionists. I would not like to be thought of as an opponent of free trade. It's easy to say what you don't do about it: protectionism. It's not going to work. How do you protect yourself against foreign electrons? You can keep out tomatoes from Mexico but you can't do that."
But what is even more worrying than the stark figure of 40 million is the message this sends to parents and families. Despite what we have always assumed, having a higher-skilled, higher-paid job is not enough to protect you from being offshored. It is a notion that throws on its head many of the present assumptions about the place of the UK in the next few decades. Gordon Brown drones on interminably about equipping future generations with the right skill sets but Prof Blinder says: "It's not enough - that's the whole point.
I believe that on education the correct answer for the past 25 years was, 'give them more education'. That was good advice. For the next 25 years I'm not so sure.
"We have to think more subtly about the types of education and it's not so obvious that there's a great future in America for computer programmers, accountants and for some types of lawyers - just to take three highly-educated people. "Lawyers involved in family disputes, and criminal lawyers - they've got to stay around. But lawyers that write contracts, and lots of accountants, maybe that kind of education is not such a fabulous idea.
Educating people to go into what I call the personal services is a good idea - some of which don't require all that much education - so electricians, carpenters, plumbers, roofers - skilled trades. "This is a very new thought for the highly-educated, white-collar class to think that they may have to compete with low-wage foreign workers. Manufacturers have been doing that for generations.
But accountants, lawyers, intellectuals? "The story's not about high and low skill, it's about high and low touch," he concludes, a trace of his native Brooklyn in his accent. "You gotta do it face to face."
Prof Blinder's mission is to reshape the way developed economies are preparing themselves for the future, and he is in a hurry. "We've got about a generation until this happens," he says. "That's why there's a kind of urgency because, if you put a five-year-old into school now, they will come out with a college degree 17 years from now. Those starting their careers today could find themselves obsolete well before the end of their career - some of them, it depends what type.
To say, 'raise your sons and daughters to be lawyers', is not subtle enough advice. The question is, 'what kind of lawyer?'."
Already many of those who oppose free trade and globalisation have latched on to Prof Blinder's research, screeching that it suggests the present course of the world economy will leave many millions worse off. The professor begs to differ, claiming that most of the lost jobs will be replaced as people retrain.
"The idea of jobs going offshore is, in the long run, a good thing. Both the countries doing the offshoring, say the US or England, and the countries to whom the offshoring goes, say India, will benefit. I don't doubt that, and that's why my T-shirt should say, 'I support free trade'. But, if there are all these jobs going, that creates a lot of turmoil.
Some occupations are safe, of course. Investment bankers, who have to take out their clients and sweet-talk them are more likely to survive than derivatives traders, who could as easily be elsewhere. Clearly, for example, most of the health profession will still have to remain in situ. Economists are looking very vulnerable, Prof Blinder says. And as for journalists - "You're on the margins, like college professors."
at May 11, 2007