Regained Jobs

Reading this NYT article on the effect on rising oil prices on globalization made me wonder what adjustments Tom Friedman would make to his case for the flat world given this new development. While technology workers can continue to be impacted (negatively is a lot of cases) by the flattening, any line of work that requires the physical movement for goods from A to B might not. The article cites a report by the Canadian investment bank CIBC World Markets :

“The cost of moving goods, not the cost of tariffs, is the largest barrier to global trade today,” the report concluded, and as a result “has effectively offset all the trade liberalization efforts of the last three decades.”

Perhaps things will come full circle for all those jobs that got offshored because oil was cheap enough to make it worthwhile to seek out far flung destinations that afforded lower manufacturing costs. But by when the jobs do return home, the workers who once did them would have been long gone and the skills they once had grown rusty (at best) or forgotten (at worst). So you could have a made locally product that is not nearly of the quality consumers had come to expect.

But a trend toward regionalization would not necessarily benefit the United States, economists caution. Not only has it lost some of its manufacturing base and skills over the past quarter-century, and experienced a decline in consumer confidence as part of the current slowdown, but it is also far from the economies that have become the most dynamic in the world, those of Asia.