The economics of free trade are hitting home. The Washington Post reports: Tech Layoffs Skyrocket. These figures were cited for January and February following reports to Tech Crunch, a blog that chronicles news reports that cover the specific numbers of jobs lost in tech companies.
At the same time, workers are being recruited from overseas for jobs in the US.
Even entry-level jobs are going to the inexperienced from abroad. The required skill is that the worker enter the US on a visa, rather than have the authorization to work here already.
As free traders associate the disaster of today's economy to the fact that there have been any constraints on free trade at all, the economics behind free trade are examined from a less biased point of view by Stephen Cullenberg, UC Riverside, in a paper called 'The 'Mistaken Economics' of the Anti-Globalization Movement.' Cullenberg addresses the shortcomings of the neoclassical economists in addressing the concerns of the "Anti-Globalists."
Social construction of the market – Consistent with much institutionalist and evolutionary theory, the anti- globalization literature denaturalizes the market and recognizes that all markets are everywhere "thick," meaning that they are constituted by a certain specific set of institutions that can differ over time and place. Thus, it is possible to debate what institutions are good and which are bad for economic life, without challenging the basic structure of markets or advocating socialist planning as Bhagwati mistakenly thinks the anti- globalization movement supports.
He goes on to illustrate why neoclassical globalists do not care about the fact that they are knowingly and willfully destroying the lives of many individuals, especially in the US. They are bypassing Us citizens and other local talent for the jobs, based on an unproven economic theory that is extremely narrow in its approach to defining a successful economy.
Neoclassical economists have two responses to negative distributional effects of trade. First, the Kaldor-Hicks welfare criterion allows an improvement in overall economic welfare if the winners from trade can at least in principle compensate the
losers from trade. Second, many economists argue that the overall losses to lowskilled workers are empirically quite small and therefore of little policy concern.
The fact is that the level of skill involved in the IT world varies considerably, and the globalists, following the neoclassical economists' model, have simply scaled the ladder until they have also begun replacing skilled workers. This is being perpetrated on us for the greater good, according to the prevailing economic theory.
Cullenberg is not alone in his analysis of the possible flaws inherent in the narrowly-defined parameters of neoclassical economic theory. Archstone Consulting, in a new study has revealed that many companies are also questioning the wisdom of unbridled globalism, offshoring, and outsourcing.
...companies are contemplating the re-establishment of manufacturing domestically, amid rising costs and other strategic challenges within the offshoring model.
Will we see a change in the US corporate policies anytime soon? Is backshoring alone enough to reverse the damage that has already been done to the middle class, the working professionals of the US?