September 30, 2015
The NYT apparently thinks it has a big news story in its article telling readers that companies use temporary visas to bring over tech workers who learn skills and then transfer them to workplaces in India and other countries. The jobs are then shifted overseas to take advantage of lower cost labor.
This is one of the main goals of the trade agreements the United States has signed over the last three decades. The point has been to allow U.S. firms to take advantage of lower cost labor in the developing world. For the most part this has meant shifting manufacturing jobs, like those in the steel and auto industry. However the same logic of the gains from trade applies to more highly skilled jobs, like the tech jobs discussed in this article.
It’s not clear why the NYT thinks this is news, this is what is supposed to be the result of recent trade deals. Those who are displaced by foreign competition are obviously losers, but the rest of the economy benefits by having lower priced goods and services.
On net, workers who tend to be similar to the ones being displaced are losers when this displacement happens on a large scale due to the overall effect on wages. Those who are largely protected from foreign competition (by protectionist restrictions, not economic laws), like doctors and lawyers, benefit. It’s not clear why the NYT thinks it has news here, it is reporting on how trade policy has been designed to work.
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