2.2.04

OUTSOURCING ROUNDUP.
I tend to be simple-minded about it and say that outsourcing will continue until the wage in each country equals the value of marginal product of that country's workers. Put another way, the high productivity of US workers will place a finite upper bound on the outsourcing of tech jobs.
That's Knowledge Problem. Never understimate the power of a no-arbitrage condition. Read the whole thing, and the Marginal Revolution roundup of the arguments she suggests.

Noneconomist visitors to Cold Spring Shops note well: the immiserization of Americans will not be the fault of foreign workers accepting lower wages. It will be the fault of an education establishment that destroys the human capital that makes the high productivity happen.

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