Saturday, September 13

Colby Cosh also wrote a National Post piece quoting Mickey Kaus:
Isn't it possible that when people tell surveyers they are self-employed they are actually self employed? If we're entering a new economic era--one in which traditional cyclical employers won't start rehiring, as this excellent WaPo analysis suggests--isn't it likely, even, that workers will adjust by pursuing entrepreneurial opportunities? And if entrepreneurship is real, what does calling it "involuntary" mean? I might prefer to have a full-fledged "job" at Microsoft, complete with stock options, health insurance, etc. Instead, I'm a freelance contractor. Calling my entrepreneurship "involuntary" might be accurate, but it doesn't mean I'm not working and feeding myself. In the "newer" economy, you'd expect such self-employment to increase, no?
Why doesn't he cite the author of the "excellent WaPo analysis"? It is Jonathan Weisman, by the way. And for the record, the Doom-laden title reads: Casualties Of the Recovery: Jobs Cut Since 2001 Are Gone for Good, Study Says. And yet,
The vast majority of the 2.7 million job losses since the 2001 recession began were the result of permanent changes in the U.S. economy and are not coming back, which means the labor market will not regain strength until new positions are created in novel and dynamic economic sectors, a Federal Reserve Bank of New York study has concluded.
He characterizes this as "sobering news". Although I can't find the article on the Federal Reserve Bank of New York site, he cites one of the authors saying,
Instead of seeing a recession as something just to weather, managers this time seem to have seen it as an opportunity or even a mandate for permanently changing the way they operate
Weisman also says,
When a firm ships a $60-an-hour software job to a $6-an-hour code writer in India, the most obvious benefit goes to the Indian. But, the McKinsey study reports, the U.S. economy receives at least two-thirds of the benefit from offshore outsourcing, compared with the third gained by the lower-wage countries receiving the jobs.
I was impressed with his marshalling of these reports. However, the McKinsey study actually says,
Of the $1.45 - $1.47 of value MGI estimates is created globally from every dollar spend a domestic company chooses to divert abroad, the U.S. captures $1.12 - $1.14 while the receiving country captures on average 33 cents. In other words, the U.S. captures 78 percent of the total value.
So 78%=2/3, eh?

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