DNCAttackDog
01-23-2004, 07:18 PM
Everyone knows about the ongoing push by U.S. and European companies to export jobs to countries where educated, skilled labor is cheap, such as nations in south and east Asia.
What doesn't get discussed nearly as often is where the saturation point will be. To put it another way, all those dollars and euros being pumped into, for example, India through all this "offshoring" will cause inflation in that country to go through the roof. (There are signs that it's beginning already.) As that happens, those cheap workers will begin demanding higher wages to pay for the higher cost of living in their countries. Ultimately, the price of their labor, coupled with the costs of supporting offshore offices, will no longer make the practice profitable. This is an economic inevitability.
The question on my mind is: has any economist tried to make a prediction about when this is likely to happen? If so, does anyone have a link?
Thanks,
-DNCAD
What doesn't get discussed nearly as often is where the saturation point will be. To put it another way, all those dollars and euros being pumped into, for example, India through all this "offshoring" will cause inflation in that country to go through the roof. (There are signs that it's beginning already.) As that happens, those cheap workers will begin demanding higher wages to pay for the higher cost of living in their countries. Ultimately, the price of their labor, coupled with the costs of supporting offshore offices, will no longer make the practice profitable. This is an economic inevitability.
The question on my mind is: has any economist tried to make a prediction about when this is likely to happen? If so, does anyone have a link?
Thanks,
-DNCAD