I Told You So (again)

A year and a half ago I wrote about rising wages in India, a predictable result of globalization. Let's do it again.

Nowadays it's becoming increasingly important for companies looking for cost savings to to look beyond India:

A new report from market research firm Gartner, Inc. warns that a labor crunch and rising wages could erode as much as 45 percent of India's market share by 2007.

Indian industry watchers acknowledge that the country's outsourcing industry — its golden goose of the moment — is indeed facing a "serious" problem.

Hmm, I wonder what Paul Craig Roberts has been saying about globalization recently. I've dealt with his pessimism before. It's time to see what he's been writing, and do it again.

As the falling unemployment rate is a problem for Roberts' message, he's changed his tune a little and now he's complaining about the kinds of jobs being created domestically:

Where are the jobs for the 65,000 engineers the US graduates each year? Where are the jobs for the physics, chemistry, and math majors? Who needs a university degree to wait tables and serve drinks, to build houses, to work as hospital orderlies, bus drivers, and sales clerks?

In the 21st century job growth in the US economy has consistently reflected that of a Third World country — low productivity domestic services jobs. This goes on month after month and no one catches on — least of all the economists and the policymakers.

Permit me a personal anecdote involving a major exporter.

My team at Intel has been consistently hiring for years. The ever-increasing amount of work we have to do has spurred growth in headcount, even after the significant productivity increases we've created by improving our processes. We've gone from 3 in 2001 to approximately 20 in 2005. But it's not just my group — similar groups in other geographies (including India!) have also grown or have been created from scratch. Other physically nearby groups are growing too; all this growth has actually created a space crunch and we're compressing the cubicles despite having built two new office buildings on this campus in recent years.

In my personal experience, globalization has not been about moving domestic jobs overseas. It's been about hiring both domestically and overseas just to keep up with the increasing complexity of our jobs. Moore's Law is a harsh mistress. But she's very, very sexy.

Why did Roberts pick physics, chemistry, and math to complain about? It's common knowledge that it's hard to find a job as a physics or math major. Chemistry is easier. But my group is a mix of computer science, computer engineering, and electrical engineering. (And truth be told, scandalously little of what I studied in school is relevant anyway.)

What is the point of higher education when the job opportunities in the economy do not require it?

The job opportunities in the economy do require it. We've done a lot of interviews and we've turned down a lot of candidates. It's very difficult to find people with the skill set we're desperate for.

Please submit your resumés.