U.S. Outsourcing seen Boosting Wages at Home

by Patrick Lunsford, CollectionIndustry.com

So maybe we all won?t lose our jobs to outsourcing after all.

In the ?outsourcing is the root of all evil? file, two Princeton economists have made an interesting entry. Professors Gene Grossman and Esteban Rossi-Hansberg recently made public a paper they wrote after researching U.S. wage growth in the face of outsourcing. The results: from 1997 to 2004, they claim that outsourcing actually increased wages for blue collar workers in the U.S. ¼% per year.

But how can that be? Lou Dobbs is on TV; he can?t be wrong. The professors hypothesized that the increase in productivity that results from offshoring work would actually lead to an increase in real wages for workers still in the U.S. And to be fair, they looked at low-skill workers here to see what the affects were.

The paper was presented at the Kansas City Federal Reserve conference in Jackson Hole, Wyoming.

Grossman and Rossi-Hansberg admitted that the wage gains are “far from exceptional.” But when compared to the gloom and doom spread by anti-outsourcers, any gain is a good gain.