Creative Disruption
Why the nation should celebrate math tutors in Cochin

Thursday, May 18, 2006

SO FAR, RATHER few service jobs have been "offshored." There are call centers that handle airline bookings, technical teams that talk computer buyers through their frustrations, and a few experiments in providing legal and accounting services over fiber-optic lines. But the bulk of trade still consists of manufactured goods and farm products -- things that can be packed into boxes and loaded onto cargo ships. Staff writer Amit R. Paley's article Monday on the offshoring of math tutoring is a reminder that this is going to change over the next decade or so. If a teenager in Potomac can learn geometry from a tutor in Cochin, India, there's no reason why many other U.S. service jobs can't be done from abroad.

How many? Well, so far fewer than 1 million U.S. service jobs have been moved out of the country, a small number given that the U.S. labor market routinely destroys and creates more jobs than that every two weeks. Forrester Research has estimated that the total could rise to 3.3 million by 2015; consultants at McKinsey have suggested that 13 million jobs are at risk of moving offshore. But an alarmingly plausible analysis by Alan S. Blinder of Princeton University suggests much higher numbers. By dividing U.S. service jobs into those that can be delivered over broadband connections (tax preparation, radiology) and those that require face-to-face contact (restaurant jobs, dentistry), Mr. Blinder estimates that as many as 42 million U.S. jobs are potentially at risk. That's almost a third of all jobs in the economy. It's also three times more jobs than exist in U.S. manufacturing.

So the trading of services over broadband is likely to disrupt the lives of more Americans than trade in manufacturing has done recently. Given that the consensus in favor of free trade is already fragile, the future of trade politics looks grim. Monday's Post story quoted a teachers union representative growling that children shouldn't be taught by "overseas people," and the union wants Congress to prevent foreigners from receiving tutoring funds distributed under the No Child Left Behind Act. You can bet that radiologists and accountants will be lining up to join the anti-trade coalition if their jobs are put at risk.

But the case for trade in services is as sound as the case for trade in manufactures. Yes, there are losers: in this case, American math tutors. But there is a more-than-offsetting benefit to American consumers, and notably to Americans with modest incomes. The availability of $20-an-hour math tutoring may help erode the advantage that rich children have in college entrance tests. Meanwhile, foreign exporters get a chance to escape poverty; the tutor in the Post story was earning twice as much as in her previous job as a high school teacher. And the idea that any of this erodes American vitality is unconvincing. To the contrary, Indian math tutors may boost U.S. high school math scores, fixing a much lamented weak spot in the nation's competitive outlook.