PeopleProfitsPensions.com

So, you live in the developed world, and you think of offshoring as something that’s just for big companies, right?

Wrong, offshoring has grown dramatically on the consumer front as well, and an article in yesterday’s newspaper really drove that home. For $99 a month, school and university students can access tutors in India. That’s about a quarter of the cost of hiring a tutor in the same area code.

For those of us involved in Internet marketing, offshoring is no secret; it’s been around for several years. For example, I paid a service in India to do some keyword searches for me. That produced good work at a fraction of the price of what a North American or European service would need to charge.

In yesterday’s newspaper article, several conventional tutors downplayed the significance of offshore tutors. They say they haven’t seen any decrease in business.

But, that’s really takes us to the point of offshoring, and even outsourcing. When prices can be pulled down, a whole new market emerges. Remember when airlines first began offering low, low discount fares? They created a new breed of airline passenger: People who otherwise would have driven their cars long distances.

Offshoring and outsourcing give consumers more choices, and more choices often create new markets. That makes this form of globalization a win-win for everyone.

You’re reading the commentary section of People, Profits, & Pensions. There’s also a book section, where you can read excerpts from my forthcoming book by the same name, visit http://www.people-profits-pensions.com . In addition to reading, you can also be a book critic and give me your thoughts on what you’ve read.

The recent dust-up between Democratic Presidential candidates Hillary Clinton and Barack Obama over the North American Free Trade Agreement (NAFTA) has, once again, brought out a one-sided view of free trade.

Their argument revolves around jobs, and the claim that free or freer trade hurts the country.

But, if we are to intelligently discuss free trade, we also need to consider its impact on consumers. That is, essentially everyone in the U.S.A., including manufacturing workers who lost or may lose their jobs.

You see, free trade makes many products less expensive, whether they’re domestically made or imported from another country.

Freer trade increases competition, competition increases productivity, and as USA Today noted (in a slightly different context), “…this increased productivity has led to rising living standards and made the American economy more competitive.“

These rising living standards have been good for every American, and especially the poor: single parents struggling to keep their families clothed and fed, welfare recipients, and everyone who exists from paycheck to paycheck.

No one gains more when the cost of essential products go down, or go up less than they would otherwise. When a poor person saves a dollar or two, it’s a big deal, a good deal.

Yes, it’s true that some people sometimes lose their jobs, regardless of which country is involved in free trade. But almost everyone else in the country gains something. And, because there are so many ‘everyone elses,’ freer trade is a positive policy.

Trying to turn back the clock, as Clinton and Obama suggest, would exact a serious price on the country. And, as the campaign continues, they should, in what might be the equivalent of a truth in advertising obligation, tell Americans in other states that they will pay a price for trying to protect jobs by rolling back freer trade.

Bottom line: The candidates may wish to curb free trade to protect highly paid manufacturing workers in Ohio, but doing so means they’ll also lower standards of living for residents of all 50 states. And, that would be very bad news for the poor.