Op-Ed Columnist: Meet the Zippies:
"Taking all this in, two things strike me about this outsourcing issue: One, economists are surely right: the biggest factor eliminating old jobs and churning new ones is technological change — the phone mail system that eliminated your secretary. As for the zippies who soak up certain U.S. or European jobs, they will become consumers, the global pie will grow, and ultimately we will all be better off. As long as America maintains its ability to do cutting-edge innovation, the long run should be fine. Saving money by outsourcing basic jobs to zippies, so we can invest in more high-end innovation, makes sense.

But here's what I also feel: this particular short run could be a real bear — and politically explosive. The potential speed and scale of this outsourcing phenomenon make its potential impact enormous and unpredictable. As we enter a world where the price of digitizing information — converting it into little packets of ones and zeros and then transmitting it over high-speed data networks — falls to near zero, it means the vaunted "death of distance" is really here. And that means that many jobs you can now do from your house — whether data processing, reading an X-ray, or basic accounting or lawyering — can now also be done from a zippie's house in India or China."

And as education levels in these overseas homes rise to U.S. levels, the barriers to shipping white-collar jobs abroad fall and the incentives rise. At a minimum, some very educated Americans used to high salaries — people who vote and know how to write op-ed pieces — will either lose their jobs, or have to accept lower pay or become part-timers without health insurance.

"The fundamental question we have to ask as a society is, what do we do about it?" notes Robert Reich, the former labor secretary and now Brandeis University professor. "For starters, we're going to have to get serious about some of the things we just gab about — job training, life-long learning, wage insurance. And perhaps we need to welcome more unionization in the personal services area — retail, hotel, restaurant and hospital jobs which cannot be moved overseas — in order to stabilize their wages and health care benefits." Maybe, as a transition measure, adds Mr. Reich, companies shouldn't be allowed to deduct the full cost of outsourcing, creating a small tax that could be used to help people adjust.…

http://www.nytimes.com/2004/02/22/opinion/22FRIE.html