Globalization and job loss, from manufacturing to services

Whether different or the same, the arrival of services outsourcing virtually guarantees that international trade and globalization will remain an important focus of public attention to job loss. The reverse will also likely continue to be true: Pervasive concerns about the incidence and consequences of job loss will remain an important part of discussions about globalization. Recent research on the nature and extent of manufacturing job loss related to trade is reported on. Investigations of services outsourcing are in their infancy, and this discussion reflects that thin knowledge base. It is framed by the perspective that understanding the labor market costs of global trade is a requirement for moving forward equitably on the path of international economic integration. To understand how the principle of national net benefits from free trade can be translated into programs that compensate workers, it is necessary to identify who bears the burden of costs and to measure the size of that burden. What is currently known about the magnitude of job loss related to import competition is summarized.