25.6.03

FACTOR PRICE EQUALIZATION? Glenn Reynolds looks at the political economy of outsourcing, in this case the immigration of high-tech workers, or the subcontracting of technical work to sellers in other countries. At the root of U.S. discontent with these actions are two things: the very real disruption in the lives of people who have discovered that others will do their work for less, and the very real confusion of decreases in the nominal incomes of those who continue to do that work, with the increases in their real incomes as the mix of products expands, improves, and gets cheaper.

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