Question 1
I'd like to get the panel's view as to the influence of global demographics and how they factor into the discussion on offshoring.

Diana Farrell, Director of McKinsey Global Institute
I'm glad you raise that. It's certainly an essential perspective here. If you look at our current population today, peak productivity years in the economy for an individual worker are ages 25 to 54. We will see a decline of five full percentage points in that group over the next 15 years. If you look at the population figures, that translates into 15.6 million fewer workers in 2015 than we have today to achieve the working to nonworking age balance. In that context, even if you take the pretty high numbers in terms of jobs lost to offshoring ­ Forrester estimates it could be 3.3 million jobs ­ that is still a small fraction of the workers needed to fill the future employment needs.

That would suggest that we might come to welcome offshoring as a much more benign form of tapping into lower cost and expanding our work force needs than immigration. So I think that trend is an essential part of putting this debate in perspective. There's a happy coincidence of needs between the developed world, which is aging, and the developing world, which is coming of age and needing a lot more jobs.

Ron Blackwell, Director of Corporate Affairs of the AFL-CIO
The emerging countries are young and the population is growing rapidly, especially in places like China. One of the things that's driving this building storm and this development strategy is that the Communist Party is trying to hang on to political power by offering its population prosperity, which requires jobs, which in turn requires this particular development strategy. But this shift to a more market-based economy is aimed at changing the standards of competition for a country that had been able to have employment-based welfare systems for its aging population but can no longer afford it. I'm told that we spend more government money on health care than any country, per capita, in the history of the world. But we don't have health care for 43 million people. This system is broken.

I ask you to focus on the point Diana just made. If what's going on is capital is going to cheap labor, the other way to do that is, bring cheap labor to capital. Why don't we bring all those millions of people to the place where employment exists? Somehow that never gets raised, and yet, it's functionally the same thing. I think we all have to ask ourselves hard questions about what the rules need to be on immigration, trade, and investment to make this work.