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Business Law, Public Responsibility, and Ethics Commons

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2005

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Offshoring In The New Global Political Economy, David L. Levy Dec 2004

Offshoring In The New Global Political Economy, David L. Levy

David L. Levy

This essay challenges claims by economists and management scholars that ‘offshoring’ is simply another form of trade with mutual benefits. I argue that reducing wages through offshoring leads to wealth creation for shareholders but not necessarily for countries and employees, and that many displaced workers have difficulty ‘trading up’ to higher skilled jobs. Offshoring is a new phenomenon that entails the organizational and technological ability to relocate specific tasks and coordinate a geographically dispersed network of activities. It decouples the linkages between economic value creation and geographic location. The result is the creation of global commodity markets for particular skills ...