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A Limit on Job Outsourcing

January 26, 2004

While the flow of jobs overseas may seem to be an unlimited flood, this is largely the result of copycat journalism and a 'good news is no news' effect.

Although it is easy to see that low overseas wage levels are potentially attractive to employers, it is not as easy to see the forces that tend to restrict such an export of jobs.

It is even harder to judge just how many of the jobs that are actually exported would have soon otherwise disappeared anyway as their employers succumbed to financial and/or competitive stress.

Even without these considerations, there are reasons to believe that lower wages in and of themselves are not sufficient to bring about actual job exports in many cases.

One argument in favor of one of these reasons involving efficiency wages is attempted here at catallarchy.net .

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