Offshoring: do people have to fear about their jobs?

[Magdalena Szarafin]

Hello

German Marshall Fund provided research about offshoring in selected countries in 2006. People in different countries were asked if the trade liberalization implies reduction or creation of jobs. 59% US Americans, 58% French, 51% Germans saw a negative impact of the trade liberalization on the labour market while 55% Britisch and 39% Poles were of the same opinion.

However, experts say that offshoring brings more positive aspects to national economy using it than disadvantages. For instance, Peter Bofinger, economist, is of the opinion that German economy benefits from globalization. Also Thomas Straubhaar (economist) says that international work specialization is not a zero-sum-game but in a longer horizon of time all parties benefit from it.

At a short stage, there are some losers in the offshoring game: these are mostly low-qualified employees who lose their income as they is no more demand for them in the market. The tendency is as follows: if offshoring activity increases by 1%, the income of low-qualified employees decreases by 1,8% and the income of high-qualified specialists increases by 3% according to DIW.  According to research provided by DB Research few years ago, only in the IT industry in the US, 571 thousand low-qualified staff have lost the jobs and paralerly 370 new jobs were created for middle and high-qualified staff between 1999 and 2005.

I would like to invite you to a discussion about this topic.

Best regards

Magdalena Szarafin

[shubh]

Thanks for forwarding these interesting facts. I agree with you that offshoring develops the feeling of insecurity among the professionals but on the other side it inspires them to prove their worthiness. The advantages of offshoring are more than disadvantages. There seems no valid reason of limiting the offshoring.   

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