Friedman: Don't be average

Not exactly new stuff, but in case you are up for a dose of Thomas Friedman's latest.

The more we discuss this, the more I am struck by the different implications and implicit recommendations from Friedman and Blinder. The two seem to me to depart from a common diagnosis of the fundamental challenge: that competition from an increasingly global labor supply will put downward pressure on white-collar American wages (see also Freeman on factor price equalization). But as many of you have noticed, the remedies do diverge from there, with Friedman seeming to be a science and technology enthusiast and Blinder deeming personal services to be the set of options that will be less vulnerable to offshoring.

There is much to say about this. One point I would offer is the comment I suggested on Freeman's piece in class: that downward pressure on wages in one sector of a market economy should soon "trickle through" to other sectors, albeit with a time lag. If wages in offshorable jobs fall, would not people in those jobs be expected to move more toward the now-higher-wage jobs in personal services, thereby driving down wages in personal services due to the increased labor supply? (The example in class was that more people will become barbers, and the greater competition among barbers should lead to cheaper haircuts: good for consumers, but likely bad for barbers.)

There are many other angles, including the question of job satisfaction and what status professions would look like if Blinder is correct, but that can be discussed another time.