Where Are the Jobs? The Harsh Truth about Outsourcing

As the US struggles to deal with the political and economic fallout from the outsourcing of high-tech and manufacturing jobs overseas, many analysts have come down on all sides of the debate. Will America benefit in the end? Does the theory of "comparative advantage" hold true? Can the US find a niche that will allow it to replace the jobs lost and reverse wage declines? The answer, according to Paul Craig Roberts, a former Assistant Treasury Secretary in the Reagan Administration, is no. "Outsourcing", he writes "is driven by absolute advantage." The US cannot compete with lower wages elsewhere. Any wage decline in the US threatens upward mobility, pushes more people below the poverty line, and harms the tax base. The only answer possible to the outsourcing debate, Roberts continues, is to keep jobs on US soil. "With First World capital, technology, and business knowhow", he concludes, labor in China or India "can be just as productive as First World labor, but workers can be hired for much less money." Thus the myth that America will maintain a comparative advantage somewhere, somehow is gone – it no longer applies in today's world. – YaleGlobal