One of the enduring arguments of the "free" traders has been that the reason why factory workers and others who lost their jobs to outsourcing was that they lacked the proper education. Now putting aside the evidence to the contrary found in the many unemployed factory workers who used the money the government gave them to get an education to learn how to program computers in the late 1990s only to watch those jobs shift overseas. Today we have evidence that yet another class of workers who were presumed (and often they bought it) to be exempt from having their jobs outsourced are losing their jobs to.
Wall Street banks started cautiously sending research jobs to India a few years ago, hiring employees by the handful and running pilot programs with firms like Copal, Office Tiger, Pipal Research and Tata Consultancy Services.
In 2003, JPMorgan and Morgan Stanley said they planned to move a few dozen research jobs to Mumbai, Lehman Brothers was working on a pilot program to create research presentations in India and both Merrill Lynch and Goldman Sachs said they had not moved any research to the country.
Five years later, the trickle is a flood. Third-party firms say they are seeing a 20 to 40 percent upswing in business this year alone. .....
Theoretically, as much as 40 percent of the research-related jobs on Wall Street, tens of thousands of jobs, could be sent off-shore, said Deloitte’s Mr. Power, though the reality will be less than that.
Forgive me for feeling more than a little schaudenfraude in this.
In the future, executives in India like to joke, the only function for highly paid bankers in New York or London will be to greet clients and shake hands when the deals close.
“Wall Street has to look at the world differently,” said Manoj Jain, the chairman of Pipal Research, a 400-person firm with offices in Chicago, Delhi and Gurgaon. Moving high-value jobs out of high-cost cities is “no longer a hypothesis,” he said.
It sure looks like our friends on Wall Street are about to learn that what comes around goes around, and forgive me if my sympathy for their loss is offset somewhat by the role that they played in making this happen for millions of other American workers before their ticket got punched.
The time has come for American to adopt a program of national political economy that focuses on returning our economic infrastructure to hands that put America first, and don't flinch when called open to do their civic duty, pay their taxes, and play by the rules.
These Wall Street guys like to pretend that some higher power, the market's "invisible hand" , is at work here, but the truth of it is that the folks who are making economic decisions in this country chafe at the prospect of being subject to the demands of a democratic political system in which the medium of influence is votes not money. And in which all are equal before the law. They are economic royalists.
And it looks like their ranks are going to grow a bit smaller because the big boys have decided that they can get away with screwing their white collar workers over.
Alan Blinder
did a study, which I wrote about in the Emperor Has No Clothes. It is also listed here, on EP in the Studies section (top link).
Then, there was a House Science Committee hearing on this as well, I wrote about it in Globalization vs. Free trade.
Pardon the blog posts as references, but when I write these, I have all of the study, testimony references in the links, so if you want to ignore my commentary and points, it's kind of one stop shopping for the relevant materials on how they sure as hell are moving up the food chain to get the best jobs in the US (other nations).
Alan Blinder
has had some very good policy suggestions.
Like a national cash for clunkers program that would both cut gas consumption and provide an economic stimulus.
I've got this idea for a piece on what a national program aimed to create an economic stimulus through capital investment in energy conservation would look like.
You know like getting the government in to buy up 1985 Cadillacs that get 10 miles per gallon and create horrible amounts of pollution and offering a combination of a high buying price and zero interest financing with limited amounts being made in grants to replace wasteful vehicles with more fuel efficient vehicles, and contracting with Detroit to do it. WTO rules exclude government spending, so no one can bitch when the newest generation of American's fuel efficient cars comes out of American factories.
Secondly, I think that the time has long past to have a real push to do something about getting older buildings, particularly rented buildings properly insulated.
In my piece of shit apartment in downtown Lafayette, my rent was only $400 a month, but my heating was over $200 a month in the winter. And I had an electric furnace.
The windows were like sieves though, and once I weatherized them, I could literally see the wind blowing the plastic sheet up and down. The windows just didn't stop the wind at all.
Now a replacing all 5 windows would probably have only cost $1,000, and that would have paid for itself in heating cost savings in a little more than a year. But there was moral hazard, because the tenant paid for utilities, and the landlord had to install new windows.
Imagine the energy that could be saved if landlords were required to meet certain energy efficiency standards in order to rent. I mean get HUD on the case and require federal registration of rented properties. Germany apparently already requires this.
$1000 in savings over the course of a year would have a huge impact for people getting by on 14K or 15K a year. And they'd actually spend the money, which is the point of a stimulus package. Even matching landlord spending on a 1-1 basis would still be effective. Even better require them to report the results of testing with estimated utilities to all potential tenants. That alone would create a huge incentive for landlords to spend on energy conservation measures.
bloodsucking landlords
To date, renters rights, except in a few cities, is pretty much non-existent.
That said, a tax rebate for energy improvements in secondary property, does that exist currently or not?
I like the idea about cash for clunkers too and then seriously pressuring the big 3 to make fuel efficient cars, even if they have to license the technology from Japan.
The problem is DC is the place where great ideas go to die.
What can we do to get some of these very practical, based in deep research, policy recommendations actually adopted, turned into legislation and passed on Congress?
I know on the H-1B front, just getting a bill introduced is pulling teeth and then of course it gets 2 or 3 co-sponsors where it is sent to committee to die.
In the meantime, corporate lobbyists have no problem getting their bills passed and even onto GOP and Democratic platforms.
Seriously, the US is going down the tubes and still, while there are some brilliant thinkers out there, experts, truly good ideas...it's like Congress, Politicians seem to think it's all an exercise for the reader. The public at large knows something is wrong but I doubt has the time to really understand all of these details to demand it from Congress.
What's the answer? Ban lobbyists? Ban the money? They have been trying there for years and we are nowhere.