Austerity measures have they ever saved an economy?

The definition of 'service jobs' seems to be quite a tricky thing to nail down.But I don't think we need to agree on exactly what constitutes a 'service job' in order to agree on what kinds of jobs are liable to being offshored and which ones aren't.Now, obviously, there are some pretty serious and lasting impacts on an economy and its people when the primary form of employment shifts to service jobs and away from manufacturing and agricultural/extraction jobs. For one, as convenient as it is that many service jobs cannot be offshored, it is also inconvenient that service jobs cannot be exported.An economy saturated with service jobs will very likely run a trade deficit. Is this good? Is this bad? Those are questions that we in the first world, as a set of nations moving toward being more and more reliant on service jobs, really need to be asking.And we need to be coming up with some pretty solid answers too.Jon

That's a lie, but people can read my post and judge for themselves. I don't, though. A medical opinion and a legal opinion might both be manufacturing, but that doesn't mean that doctors and lawyers don't also provide services. As I said, when a lawyer can stand in China and defend a man in an American courtroom, that'll be when we can offshore lawyering to China. But legal (and medical) opinions are certainly something that can be produced in China and put into a box - or an email - and shipped to China.Does that make them manufacturing, or service? The point you continue to completely miss is that it's very difficult to definitely classify them as either. And, indeed, simply because it's possible to produce legal and medical opinions in China, it'll probably be the case that performing medical/legal services and producing medical/legal opinions will probably become two separate jobs, one done in China and the other done here. That's a complete lie. There's no point in any of these posts where I've defined a service job as being "non-exportable." Because I didn't, and you lack the honesty to admit it.

I think this discussion is getting hung up (rather pointlessly in my view) on defining what is or is not a "service job".The issue is what jobs can or cannot be farmed out to cheaper workforces elsewhere in the world.For some time the Western economies have accepted that many of the more menial manufacturing and service roles will be done more cheaply elsewhere and have instead staked their future on the "knowledge economy".The problem with that, as I see it, is that even these high qualification high skill roles can increasingly be done by people in countries such as India and China for considerably less money.It is this that I think will provide the biggest challenge for Western economies in the medium term future.

So in your view, generating and mailing a legal or medical opinion is manufacturing?Let's just say that such a definition is unconventional and a bit silly.

I can certainly envision a "mass-production" scenario for both legal and medical advice, in the same way that tech support, which is basically technology advice, has become mass-produced.Again, my point is that the distinction between "manufacturing" and "services" is fairly porous, and many jobs have aspects of both. And in the future, those aspects may become increasingly disentangled. Surgeons in the US may operate on live two-way audio and video feed with a team of ten Chinese doctors looking over his virtual shoulder. American lawyers may recite courtroom defenses emailed that morning by a team of Indian barristers trained in that specific area of the law.I suspect you have the exact problem I (perhaps injustly) ascribed to Phat - you consider manufacturing jobs legitimate and service jobs menial. Why else would you be so obsessed about my opinion on which is which?

Well, possibly, but only if Chinese society advances to the point where there is a significant number of people with the training and knowledge to perform those roles. And it's highly likely that, by the time China has such a population of skilled, highly-trained knowledge workers, living standards and the GDP of China will have risen to the point where it's not actually much cheaper to hire them.

Seriously, crashfrog? You must have known this motive impuging was wrong when you posted it. It is apparent that I consider lawyering to be a well paying, service sector job.I've worked as a grocery bagger, naval officer, and safety testing engineer among other things, all of which were service positions that paid somewhere between poor and very well Only grocery bagging was menial.The office of the President of the United States is a service position. The idea that all service jobs are menial, low paying and/or disfavored is quite silly. I don't hold that opinion.While there may be jobs were the distinction between service and manufacturing is unclear (perhaps programmer is among them), the fact is that we already know what types of work constitutes service jobs. And the fact that we can mail paper work documenting the work we do does not make the work manufacturing. And here you repeat the mistake that you deny ever making. You are attempting to make the classification of service vs. manufacturing a proxy for what jobs are non-exportable vs exportable by using a ridiculous definition for service jobs. We already have a definition for service sector. We don't need a new one in order to avoid Phat's distaste for service jobs. The service sector includes lots of great jobs. Surgery is a service. So is Yoga instruction.But perhaps Phat is not in position to take such a job. And there are plenty of low paying service sector jobs. It seems that a good portion of the new work opportunites are for lower paying jobs. It might be legitimate to complain about that.Some service jobs, like lawyering and product saftey testing, are exportable because nobody cares where the service is performed as long as the results are communicated to them. There is no need to pretend that the paper on which the results are printed is the actual producrt. Similarly, we don't need to pretend that a janitor is manufacturing clean floors either.

I saw a news story the other day which gave me heart that some sort of public backlash against austerity-obsessed governments may be developing. In the latest opinion polls in the Netherlands, the single most popular party was the Socialist Party.To clarify what a shock this is, the Socialists are not the mainstream centre left of Dutch politics. They're the party that finished fifth in the last elections, and in the political groupings of the European Parliament they sit not with the social democrats, but with the Communist parties.Now, whether this will translate into anything practical at the next election; and whether this is just a consequence of local politics without wider implications that I'm reading too much into, I don't know. But I hope that this will scare mainstream parties into realising that enthusiastically leaping on the austerity bandwagon could seriously hurt them at the polls.

In recent weeks ratings agencies and multilateral institutions such as the world bank and IMF have all indicated that austerity is being implemented to a degree that might be self defeating.Add to this that even right wing politicians in industrialised nations such as the UK and US are talking about things like income disparity, tax avoidance and bad forms of capitalism - And I think you are right that we are seeing something of a backlash.How real it is or how long it lasts only time will tell. But cause for some optimism for those of us who think we are currently on the wrong path.

Sure. But it's not just China. When I started in IT every IT department had an in-house development section creating bits of bespoke code, database queries etc. Now I don't know of anywhere that has not outsourced this function to India or Eastern Europe. They are qualified, very good and comparatively cheap.All the indications seem to be that this sort of trend will continue into other areas. And that will pose a problem for Western economies and workforces. Even the skilled and qualified that have been relatively immune thus far. Sure - We won't be hiring the services of world class bio-technologists from China for a few dollars a day or anything like that.But as emerging economies take the lead in some areas it seems likely that skilled Western workers will emigrate to where those industries are cutting edge.It's not too far fetched to imagine a point where American science graduates who want to be involved in space exploration will be looking to work for the Chinese space programme where once they would have dreamed of working at NASA.

I can agree with that. But not with the rest of your post. First, some service jobs are exportable. But let's ignore those for now.But most of the exportable service jobs would not be exported here until are labor costs are lowered to below foreign labor costs. More likely, if more jobs were exportable, then we'd just lose the rest of the jobs here.You didn't actually say how exportable service jobs would be beneficial. Perhaps you might expand on this thought?

While it has been sourced to India, the idea that it is 'very good' is quite incorrect. It's cheap, but you get what you pay for. The problem is the turn over in those jobs is so great, the people aren't properly trained.

Because I don't think most service jobs are exportable. As for the ones that are, those are of further concern because exportable = outsourcable. If we can export it, so can they.The real issue with this, of course, is that building an economy on top of a very large service sector, relying on jobs that are mostly not exportable (at least not reasonably with available technologies) runs the risk of a trade deficit, one; and, two, the large numbers of closed factories and the high dependence on foreign goods is a serious threat to national security not just because it leaves us open to the whims of others but because, once their resources are no longer so affordable, we are left with nothing but rundown factories, mines, etc. into which we must invest greatly before being able to continue producing the necessary goods ourselves.But there is a way out.

Not in my experience specifically with regard to programmers. Whilst I am sure that the outsourcing of some jobs does result in a drop in quality (comical call centre scenarios come to mind) there is no inherent reason that it has to. You also partly get where you pay for. Paying someone a liveable wage in London will currently cost far more than paying someone what is deemed a good wage in Delhi. You seem to be talking about call centre staff and the like. I am talking about computer science graduates who are professional programmers.

You said that non-exportable service jobs were a problem because their non-exportable nature creates a trade imbalance. I am not convinced that such is true. The trade imbalance was created by the jobs, service or otherwise, that were exported, and not by the jobs that remain here.I'm asking that you explain how the non-exportability of service jobs creates a trade imbalance. Perhaps you believe that someone would export such jobs to us despite the fact that there wouldn't be any cost savings in doing so. I don't see how that could be true.