The Philadelphia Inquirer Andrew Cassel Column
By Andrew Cassel, The Philadelphia Inquirer

Feb. 22–Let’s do a little thought experiment.

Imagine you’re at work, slogging away on the assembly line or in your office cubicle. Suddenly your boss shows up with some disquieting news.

It seems the company you work for just bought a new, sophisticated piece of machinery that can do your job for a fifth of what you make. So the boss is very sorry, but he’s letting you go.

How do you feel?

Miserable, of course. Worried, naturally. More than a little ticked off, for sure.

But resentful? Outraged? Do you think the new machine ought to be locked up, thrown away or legally banned?

Or will you chalk it up, once the shock has worn off, to technological change and the breaks of the productivity game?

Hold that thought.

Now rewind. Same scene, same boss. Same disquieting news. You’re being let go, he says, because of a machine that’ll do your job for a fifth the price.

Only now he says the new machine that’s replacing you is actually a fiber-optic line stretching halfway around the world, and a person named Aparna or Rajiv sitting at the other end.

What are your feelings now? More to the point, are they any different? Does losing your job to another human being, in India or elsewhere, seem harsher or less fair than losing it to a piece of machinery?

If so, why?

It’s not an academic question. Thousands of Americans have had experiences like this, and their anger and outrage have become a force to be reckoned with in this election year.

Politicians of all stripes are now pre-screening every statement and soundbite in terms of how it might play among those who’ve been affected by the “off-shoring” phenomenon of the last few years.

Some are even demanding that government take action to stop or slow a process that they fear will bleed America of its wealth and economic vitality.

In such an atmosphere, simple economics can seem awfully cold-blooded. Nevertheless, it’s essential to getting a real fix on what’s happening.

Start by understanding that there’s absolutely no economic difference between the call-center worker who loses a job to an outsourcing firm in India and the typist who lost hers to Microsoft Word a decade ago.

In both cases, somebody found a more productive way to do the job. If you prefer to call it a cheaper way, fine — it’s the same thing.

Throughout history, such changes have always led to greater overall prosperity, because they free up resources for new uses.

But in the short term, change can hurt. That was true when tractor combines threw millions of laborers off the farm in the 19th century. And it was true when those same laborers flooded cities like Philadelphia, driving down wages for factory workers.

Today, both the assembly-line worker nudged aside by a robot and the programmer replaced by a lower-paid Ukrainian are equally jobless. Both suffer, and both deserve help in the form of retraining and income support.

Both, indeed, are victims of technological change. But the programmer is hurt because telecommunications has converged with dramatic political and social changes around the world — so that businesses can now tap into a vastly larger labor pool.

You can’t overstate the magnitude of this. It’s just as if somebody had discovered a way to get energy out of water, or edible protein out of air. The value of traditional resources like farms or oil wells would change, and the displacement would be dramatic.

In the last 10 years, a couple of billion people have joined the global workforce. India, China and other nations have opened themselves up to trade, reversing decades of self-imposed isolation, just as computers and the Internet were creating trade routes never imagined before.

The fact that you can call someone in Delhi to have a computer shipped from Taiwan to your home in Philadelphia is an epochal achievement, possible only in an age of general peace as well as scientific accomplishment. It’s something that should be celebrated, not condemned.

But the disruption that goes along with it can’t be ignored either. It is both right and efficient for those who win from globalization — and that would be most of us — to compensate those who lose.

That compensation can take various forms, but most of the obvious ones involve taxation and the government.

Unemployment insurance, funding for education and training, publicly financed medical care and other community services — all these can be seen as ways of fortifying the nation to handle rapid economic and technological change.

Sadly, that’s not a position either party seems to be advocating, as the offshoring issue moves to the political front burner.

Instead, so far we have Democratic candidates banging the populist-protectionist drum, and a Republican president whose single economic idea is tax cuts.

Let’s hope something more creative emerges before Election Day.

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