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Current Affairs

Global Labor Arbitrage

Fancy words for finding the cheapest labor anywhere in the world. Everybody’s doing it — in fact, you have to do it to survive competitively. Perhaps more troubling for the future is the sheer numbers helping to power such a shift.

Morgan Stanley’s Chief Economist Stephen Roach points out that the combined graduation rates of the major Asia countries (China, India, Japan, South Korea and Taiwan) total about 650,000 science and engineering graduates each year — compared to about 200,000 graduates in the US (and many of those to foreign students!).