An American Editor

July 20, 2010

The Labor Market Keeps on Revolting

Recently I wrote about the labor problems at Foxconn’s China factories and my thoughts about the possible future consequences for editors (see Striking Workers and American Editors). But the news doesn’t seem to end as regards labor problems in China (see Bangladesh, With Low Pay, Moves In on China).

Although none of this is directly related to editors, as workers become more literate and able to compete for better-paying jobs, all wages will rise. I think this is the singular lesson of the industrial revolution, because the educational revolution was (and is) the mate of the industrial revolution.

Yes, it will be many more years before the “revolution” meets editors head-on, but then again, perhaps not. American editors suffer from the effects of offshoring to developing countries. It is a tidal effect in that it is the publishing jobs that require less education and lesser skillsets that enable offshore companies to package services for American publishers at a lower price than publishers can get onshore. (Take a look around: The higher the literacy the higher the wage structure throughout the society, and this is true historically.) But as wage pressure mounts from the bottom up in these offshore companies, something will have to give. I believe what will give is the significant price advantage that currently favors offshoring editorial work.

We must remember that editorial work, to be done competently, needs to be performed by literate people with higher-level skillsets. And as those on economic rungs below this level of literacy and skillset gain both literateness and skills and demand higher compensation, the pressure to maintain the distinction between the levels will increase, causing a rise in the compensation of the editorial level workers. I believe this is the singular truism of the marriage of industrialization and education, a marriage that is required to move from developing to developed.

Obviously, in the publishing world, my reference is to packagers who can underbid a panoply of services because the starting base for the most expensive portion of the package of services in the United States is so low. But just as America faced competition from China because China was able to underbid its services, China is now facing competition from less developed countries that are able to underbid China. And the reason, as noted in the New York Times article, is literacy — that marriage between education and industry.

It is the illiterate who form the low-wage backbone of the industrialization of developing nations. Yet to grow and compete, industry needs increasing literacy in its workers. Workers need to be able to comprehend computer instructions, for example. But as literacy rises, so does the demand for better wages and work conditions — and so the groundswell begins. Bangladesh, the competitor to China discussed in the New York Times article, has a 55% literacy rate, a rate that is comparable to China’s rates of the 1960s and 1970s when manufacturing began to move from made in the USA to made in China status. Now China’s literacy rate is 92%, which is giving rise to demands for socioeconomic parity with similarly literate countries, which means the developed countries of Europe and the United States.

Soon these trends, I predict, will hit India, which is currently the offshoring capital for American publishers. As Indians increase their literacy rate, the demand for better working conditions and higher pay will be felt. And as was (and is true) in western industrialized nations, the current literati will want to maintain their economic supremacy and so will also demand higher wages. At some point in the not-too-distant future there will be no financial benefit to offshoring. (As it is, I am seeing a trend away from offshoring editorial services among the companies that first thought it would be the answer.)

One other matter worth noting: With an increase in literacy comes an increased demand for reading material; books and magazines are the purveyors of knowledge, which is needed to keep moving forward. When that pent-up demand surfaces in a developing country like India, the local packagers will face the same problems American packagers face — competition for the local market.

Within the next decade, I predict the tide will turn and offshoring by American publishers will become onshoring because there will be no cost advantage to the offshoring. (We must not forget that even under the best of circumstances, offshoring is not problem-free.) I also predict that we may well see India and countries like India who currently are benefitting from the offshoring by American companies, offshoring themselves — to the United States.

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