ON OUTSOURCING AMERICAN PILOTS AND BEYOND

GO EAST, OLD MAN

I've posted before on the the idea that globalization and outsourcing is a two-way street, even when things look bleak from an individual's perspective in any given US industry at any given time.  It's good to see anecdotal evidence to bear that out in the real world from time to time.

There's a terrific article in the Wall Street Journal today titled "With Jobs Scarce, U.S. pilots sign on at Foreign Carriers", providing a vivid example.  It states:

"In a new twist on global outsourcing, a flock of U.S. pilots is fleeing the depressed North American airline industry to work in far reaches of the world where aviation is booming.

After the 2001 terrorist attacks stifled air travel and sent the U.S. industry into its deepest decline ever, more than 10,000 U.S. pilots were laid off, and many more took early retirement. Despite subsequent hiring by a few healthy carriers, including Southwest Airlines, thousands haven't been able to find new flying jobs at their old pay grades.

At the same time, the industry is expanding rapidly in China, India, Southeast Asia and the Middle East. As these regions have grown more affluent and loosened aviation restrictions, travel demand has soared. New airlines have started up, existing carriers are adding routes, and hundreds of new jets are on order."

It's a story that's terrific partly because it shows us a familiar issue in a new, positive light.  Most of us are saddened when we read daily about the trials and tribulations of US airlines and their employees. 

And most of the time, we think of the opportunities for these employees dwindling because we project them within the borders of the United States.  So it's a surprising and positive twist, when we look at the same problem beyond US borders.

Furthermore, this is a trend that has long legs, given the years it takes to set up flight schools and train pilots the world over.  The article continues:

"Aerospace giant Boeing Co. estimates the global jet fleet will grow to more than 35,000 airplanes in 2024, from fewer than 17,000 in 2004. Boeing pegs demand for new pilots at nearly 18,000 a year through 2024.

China alone will need more than 35,000 new pilots over 20 years, and the rest of Asia will need 56,500, the company estimates. Many countries are currently unable to train enough pilots at home."

We need to keep reminding ourselves that the world is a very big place.  And the best job opportunities for our citizens aren't always just at home.

Admittedly, relocation to a different place, whether it's a US pilot moving to India or China, or a US auto worker moving from Detroit to a different state to work for an Asian automaker.

Our forefathers prospered by going west. 

Even in my case, as someone born in India, my father emigrated to the Middle East at age seventeen for better opportunities.  I inadvertently followed in his footsteps by traveling further west to the U.S., also at 17,  for a college education.  I wasn't able to go home to see my parents and sister until after graduating three years later, given financial limitations and educational imperatives.

Moving is hard to do, but can be good for the long-term, especially for one's children.

It's a lesson already learned by countless citizens of developing countries seeking a better life through immigration, both legal and illegal, in developed countries. 

Slate has an interesting article on the subject, along with the adjacent cartoon--click for larger image.

There may come a time when the opportunities are reversed in not just one industry here or there, but many industries all over.

And more of our citizens may find opportunities beyond our geographical borders.

Roughly two billion people in China and India, about a third of humanity, are racing towards our current standards of living, and will likely achieve them over the next few decades.  Another third are following in their footsteps across today's "third-world" countries.  And far bigger percentages of these populations are younger than in Europe and America. 

There are only 300 million or so Americans, growing to a little under half a billion over the same time frame.  Not just trade, but job opportunities are going to be more global for Americans than ever before.

We need to always keep this in mind, through political, economic and financial cycles both short and long.  Especially through political cycles, like now.

Our kids will likely be the richer for it.

Comments

[Dennis Chan]

Michael,

Well said. I am an immigrant myself from China to US in 79 and have benefited enormously by the booming Silicon Valley economy. With the BRIC (Brazil, Russia, India and China) finally joining the capitalistic system, that is additional 3 billion people in the new system versus just about 800 million people in the existing system. The opportunities as well as wealth created and will be created are simply massive. People who adapt to and take advantage of this changing environment will do very well for themselves.

Dennis