Princeton’s Alan Blinder found that 25% of U.S. jobs are likely offshoreable. He did this by comparing three different survey measures, which all resulted in the same figure.
VOX: Using a specially-designed telephone survey, which Princeton University’s Survey Research centre put in the field in June and July 2008, we experimented with three different ways to measure offshorability. In the first, professional coders used the answers to standard CPS questions to rate the offshorability of each person’s job. In the second, respondents essentially classified their own jobs by answering a single question about the need for face-to-face contact and/or physical presence on the job. (Both attributes indicate an inability to move the work offshore.) In the third, we used the answers to a series of questions on face-to-face contact, the ability to deliver one’s work from a remote location, etc. to create our own index of the offshorability of each job.
At first 25% seems like a shocking number, yet The Economist plays it down.
The Economist: I have to say, I think Mr Blinder’s research probably does more to obscure than reveal by calling attention to a number that means almost nothing without appropriate contextual information. A job may be technically offshorable, but if there is no supply of foreign labour available to do the work at acceptable prices then it doesn’t matter.
We can provide an example of the above; Perez Hilton is probably offshoreable, though he’d be hard for someone in Bangalore to emulate. More broadly, a lot of jobs can be done from afar, yet depend on local or cultural knowledge.
The Economist also points out that many offshoreable jobs tend to be those that employ better educated workers, according to Mr. Blinder’s research. These employees are better able to find new means of employment should their job be outsourced. Just because one job goes doesn’t mean another one can’t found or created.
Yet we’d highlight another, far simpler, argument for why this result isn’t something to be scared about.
Mr. Blinder’s research also estimates that today’s 25% offshoreable figure is similar to the percentage of jobs which were offshoreable during the 1960s, when the US was far more dependent on manufacturing for employment.
Hence it isn’t an extreme value at all. It could even be a perfectly normal percentage for any flexible economy such as the U.S. Even internet technology doesn’t seem to have changed the proportion of jobs which can relocate.
The U.S. has dealt with such an employment adjustment before. It actually moved up the value chain in the process with many new, innovative industries and a much larger economy.
It will do so again as long as both the people and government allow it to stay flexible.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.