13.3.04

TONIGHT'S OUTSOURCING ROUNDUP.
State graduation exams typically require ninth and 10th grade skills, far below what's necessary to succeed in the 21st century
according to Joanne Jacobs. That failure in the high schools sets up a lot of students for failure in college. Here's Dynamist's take on what happens next:
The 5.6 percent unemployment isn't equally distributed across professions; in fields with lots of layoffs, job seekers may in fact be highly qualified. But Tim's note captures the risk aversion that's holding down hiring. It also points to the unmentionable reason high-tech companies are looking abroad for programmers: When you're trying to get the very, very best--the top 1 percent--it helps to expand the pool to a billion Indians, not to mention drawing from an elitist education system that leaves lots of children behind but gives the geniuses unsurpassed training.
Yup. Add to that the obligation of an employer to pay person-dependent (rather than effort-dependent) fringe benefits including but not limited to health and unemployment insurance premiums, and employers will reveal a preference to pay their existing workers overtime and to prefer offshore workers with lower setup costs rather than to expand their domestic hiring.

There's more to the offshoring story than meets the eye.
So the sector that is supposedly most vulnerable to job loss from offshore outsourcing has actually created a significant number of jobs over the past year, when outsourcing was supposedly at its worst.
Professor Drezner has done the research.

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