Who's Responsible for Outsourcing? Let's assume outsourcing is a problem because it either lowers wages or destroys jobs. Assuming that's true, what is the cause? I think it can be blamed in large part on government granted monopoly power that began with National Labor Relations Act (or Wagner Act) of 1935. That monopoly has had the effect of inflating wages, something like a subsidy. As we have moved from an industrial society to a technological/knowledge/service economy, global labor markets are putting pressure on those inflated wages. Those who demonize outsourcing want to continue propping up those earlier "subsidies" in various forms (tariffs, regulation, tax incentives) which all distort the market further.
I would like to think that there is a place for government to set policy that would be implemented only for a short period to soften the blow of market shake-ups, but that never happens. The subsidies become permanent, because people build their livlihoods around them. I haven't read this anywhere, because it's my own theory.
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