Blinder's Torment

Updated July 2009

Economist Alan Blinder worries about American jobs lost to outsourcing abroad. He wrote “Pain From Free Trade Spurs Second Thoughts” in the Wall Street Journal (3/28/07) and “Free Trade’s Great, but Off-shoring Rattles Me” in the Washington Post. (5/6/07) He tells us he has always been as doctrinaire about free trade as economists everywhere. We feel his pain when he tells us some fellow economists now call him a heretic even though economics is supposed to be an empirical science and not normally a religion for the faithful.

Dr. Blinder’s heresy is to question the benefits of free trade in all cases. He thinks the digital revolution in the new global economy might cause employers to move their computer jobs abroad. In the Wall Street Journal Article Dr. Blinder listed 12 jobs with employment counts from the May 2005 Occupational Employment Survey published by the Bureau of Labor Statistics. All but two of the jobs are professional jobs requiring college degree skills and all were described as vulnerable to loss from cheaper foreign labor.

13-2051 Financial Analyst
15-1021 Computer Programmers
15-2011 Actuaries
15-2021 Mathematicians
19-1022 Microbiology
19-3011 Economists
27-1024 Graphic Designers
27-3091 Interpreters and Translators
27-4032 Film & Video editors
31-9094 Medical Transcriptionists
43-3031 Bookkeeping, auditing and accounting clerks
43-9021 Data Entry Keyers

The total of these jobs in the Occupational Employment Survey for May 2008 is 3,158,930 compared to 3,101,130 in November of 1999, but the jobs could be exported since the work is not like manufacturing where autoworkers have to be at the auto plant to do their work.

However, the global economy is not new. If Dr. Blinder wants to worry about free trade and jobs why limit the worry to 12 jobs that might be moved offshore. Dr. Blinder should look more closely at the new Current Employment Survey benchmark data published by the Bureau of Labor Statistics where manufacturing employment continues its mordant mournful decline, but service employment continues to grow, adding 27.8 million new service jobs since 1990, covering the lost manufacturing jobs and as well as job growth. Off-shoring jobs is just one part of the global economy, does he mean to ignore imported goods and the changes in the service economy?

Among America’s service jobs count 414 thousand employed in the gambling industry and casino hotels, but fat and exercise is growing faster with employment at fitness centers now at 510 thousand, up this year and every year since 1990. Collections agencies are up again with 160 thousand jobs for 2008. Employment at temporary help agencies is down for 2008 still has 2.3 million jobs. Security and security guard services keep going up too, another 23 thousand jobs for 2008 and now at 807 thousand jobs. Security guards have an advantage; their jobs won’t be exported.

America now has millions of prisoners and they are on the rise with 7.1 million reported under correctional supervision by the Bureau of Justice Statistics. They are great for jobs and BLS reports 428 thousand jobs as correctional officers and jailors, 41 thousand jobs as first line managers of correctional officers and jailors and 97 thousand jobs as Probation Officers and Correctional Treatment Specialists. Those are the jobs keeping and managing the prisoners. There are more jobs getting them there. Police patrol officers, police detectives, criminal investigators, lawyers, judges, magistrates, hearing officers, bailiffs, counselors, social workers.

Jobs in child day care services averaged 388 thousand in 1990, but 859 thousand in 2008. And pets, do not forget pets. The Bureau of Labor Statistics reports jobs at America’s pet supply stores, kennels, pet care services and for veterinary services, all of which have 453 thousand jobs. Veterinary services added 168 thousand jobs with gains every single year since 1990. The employment growth implies a growing concern among Americans for the health and welfare of their pets, but with millions of actual Americans without health care insurance we might worry that some household pets get better health care than our fellow citizens.

Despite all the nasty and derogatory things said about government, government creates lots of non-exportable service jobs. Actually 22.5 million work in federal, state and local government including education. The published data mentioned above shows 282 thousand new jobs in government for 2008. Local government employment now stands at 14.6 million with higher employment every single year since 1990, no exceptions. I am sure Mr. Blinder will join me in hopes that tax administration will not be outsourced abroad, even though it could, but there seems to be plenty of streets, sidewalks, schools and other projects to keep the government job mill rolling. Public school jobs are up 99 thousand and do not forget about social services where individual and family services jumped 59 thousand in one year and stands at 1.1 million jobs. These are social work and counselor jobs and they solid middle class and non-exportable jobs.

Last I want to mention my favorite source of new jobs: restaurants. Cooking used to be one of America’s biggest do it yourself occupations. Everyone can stay home and cook, but more and more we go out. From 2007 to 2008 restaurant employment were up 42 thousand. Restaurant jobs now stand at 9.6 million with growth every year since 1991. The total does not include food service workers at school cafeterias, hospitals, retail stores or ball parks, museums and other recreation facilities. Add them to the total brings us to 11.4 million food service jobs. Worse, jobs from the farm to the supermarket continue to decline due to productivity growth and imports in the global economy. Restaurants are the only part of the food chain Americans can count on for new jobs.

As long as Americans and their governments keep spending all their money as fast as they can there will be jobs as the jobs at gambling casinos, fitness centers, collection agencies, temp services, prisons, day care centers, pet care salons, veterinary services, government and restaurants can testify. Mr. Blinder makes a mistake when he looks at the jobs we might lose. If he would look at the jobs Americans are already taking he might revise his economic theory of free trade and realize free trade creates restaurants. Now you know.