Demand for technology workers in the United States continues to grow
in spite of American companies shifting more technology work overseas,
according to a new study.
Sigh. Is there, like, some cosmic law that reporters have to be
poisonously ignorant about economics? Of course outsourcing
stimulates domestic demand. Increases in efficiency and better
exploitation of comparative advantage do that.
Maybe I’m just naive, but shouldn’t a reporter at a business
news channel know better than to subscribe to the fixed-lump-of-labor
The study cites estimates that between two to three percent of IT jobs
will be lost annually to lower-wage developing countries through the
process known as offshoring. But it said the U.S. IT sector’s overall
growth should outpace that loss of jobs, expanding opportunities for
those trained in fields such as software architecture, product design,
project management and IT consulting.
Comparative advantage, kids. That’s what it’s all about. If
there’s any way in which the average programming skillsets in
the U.S. and India diverge, market pressure will sort jobs and push them
where they’re most efficiently performed.
“Despite all the publicity in the United States about jobs being lost
to India and China, the size of the IT employment market in the United
States today is higher than it was at the height of the dot.com boom,”
[...] lower wage scales in India and China are not pushing down pay
for U.S. IT workers. [...] IT workers have seen steady gains in
average annual wages for different fields in the sector of between
about two to five percent a year.
This is where libertarians like me get to gloat a bit, pump a fist
while shouting “laissez-faire!”, and point out that both left-wing
antiglobalization moonbats and right-wing isolationist/protectionist
wingnuts that they are full of horse puckey up to here. Welcome to free
trade, making everybody richer exactly the way we expect it to do when
governments don’t piss in the soup because they think they’ll like the
The study suggests that there are several factors in the continued
growth in demand for IT workers here. The report said part of it is
due to the use of offshoring by U.S. companies, including start-up
firms, to limit their costs and thus grow their businesses. That, in
turn, creates more opportunities here even as an increasing amount of
work is done overseas.
And there it is. Offsharing grows businesses so they can find or
create more domestic opportunities. That’s the invisible hand right
there, giving a rude finger to every single “managed trade” idiot and
regulatory busybody on the planet.
The study also said that companies from a variety of sectors in the
economy continue to discover greater efficiency and more competitive
operations through investment in IT. The study therefore argues there
will be continued growing demand for IT as underserved fields such as
health care, retail trade, construction, and certain services make
greater investment in technology.
This means that IT is being substituted for other, more expensive
inputs of production (a kind of ephemeralization). As long
as that keeps happening, demand (and IT wages) will continue to