Graham is thinking about "off-shoring" work to the third world.
His conclusion, unskilled jobs are going abroad. This creates a big gulf between the skilled worker and the unskilled welfare recipient. And civilized countries probably want to do something about it.
As welfare is expensive and unpopular with rich voters, the only solution is education, education, education to get everyone into those lovely, high paying, skilled jobs.
There are several problems with this view :
- off-shoring isn't just a problem for unskilled labour. It's increasingly happening to skilled work too. Hence the US's jobless recovery. In fact, the internet makes it really easy to move "knowledge work" abroad. I've teleworked for Runtime from Brazil, with few real problems.
The only things that prevent the mass-exodus of skilled jobs overseas are :
- language barriers
- trust barriers (how do I know them furriners ain't dishonest or plain stupid?)
- er ... that's it.
Now India has millions of cheap English speakers. And a sufficiently large proportion are as smart and well educated as British or American folks. Cheap travel means our managers and investors can go there and meet them and build-up trust.
- language barriers
- the skilled / non-skilled distinction is actually misleading. Skill is continuously eroded by automation (as Graham admits). In our field, skilled assembler programmers have seen their jobs automated out of existence by C compilers. (And it's only a matter of time before Graham's skilled job writing Enterprise Java is creatively destroyed and he's replaced by less skilled Python or Ruby coder ;-)
- It's not very clear what "skills" aren't either automatable and / or offshorable. The best candidates seem to be really personal contact services (anything between client account management and prostitution). But even here automation takes it's toll. At the one end of the scale, burger-flipping looks like it's on the way out. At the other, telepresence means Indian doctors can operate surgical robots in New York hospitals.
- The most money of all is, of course, to be made not by working at all. But by investing.
Actually this race to higher skills suddenly reminds me of Clayton Christiansen's Innovator's Dilemma. Basically the jobs are being eaten up by automation and more competative markets abroad. The rich "Western" country (like the market leader for Christiansen) is forced higher and higher up the value chain, tailoring a service to only the most wealthy and specialist customers ... until one day, it finds it's hit the top. The manufacturing goes abroad, the design and planning goes abroad. And then you suddenly realize that the wealth has gone abroad too. The dollar / pound / euro collapses relative to the Yuan, the Chinese stop learning English to service English-speaking customers. The few enclaves of wealth in the "West" are no longer a priority compared to the home market.
How do you stop this? Who knows, but here are my suggestions for civilized governments.
- Demand high standards of workers' rights everywhere. No reason today why there shouldn't be a web-cam in every factory in the world. Tag every item produced with a bar-code that let's consumers trace it back to it's place of origin and see the conditions under which it was made.
TQM and supply chain management gives companies plenty of oportunities to exert pressure on and make demands from their suppliers. The same technology can be used to enforce standards of working conditions. Government should be willing to fine the importers of any material that doesn't conform.
Then at least we'll know that off-shoring isn't a race to the bottom of employer responsibility.
- After that, stimulate the consumption of local produce. Support local complementary currencies which have geographical limits. For example, exempt them from taxes. That will lead to many consumers choosing to be paid in local currency, and to spend on locally produced services. In turn this will stimulate the demand for a mix of skill-levels in your area.
- Encourage alternative currencies for international trade. No more export guarantees in the national currency, but in a government issued scrip with demurrage. This turns exporters into more enthusiastic consumers within the country. In fact all "corporate welfare" and government support can be in forms like this.
- More soon ...