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If You're Out of Work Blame Your Cell Phone

Times are tough out there.

We would like to blame China, incompetent politicians, Federal Reserve Chairman Ben Bernanke, the banking system, or some unseen forces for this phenomenon.

But in reality, the answer is no further than our pockets. The real culprit is your cell phone.

The arrival of these gadgets changed everything...

That's because before the cell phone boom, it was very difficult to run an efficient international outsourcing operation. Until then, there were no means of communicating between different offices other than fax, telex, and the balky international telephone system.

Consequently, these communication barriers made manufacturing products overseas cumbersome and expensive.

And since there were relatively few outsourcing operations at the time, there was also an acute shortage of skilled employees in poor countries, making a difficult situation even worse.

As for competition, there wasn't much. That meant the jobs of workers in rich countries were still relatively secure.

But not for long.

Starting in 1995, the Internet and the modern telecommunications revolution changed everything.

The Race to the Bottom

Suddenly, these same barriers began to come down. The job market was changed forever.
Now it was possible to communicate on a real-time basis with factory or service operations in poor countries all across the globe. Outsourcing had been born.

At about the same time, the retail behemoth Wal-Mart Stores Inc. (NYSE: WMT) discovered a China and the price advantage it could gain by manufacturing goods overseas. Wal-Mart's new world began to take shape.

Goods could now be designed by Wal-Mart, made to Wal-Mart's specifications and delivered to Wal-Mart stores in just a few weeks, enabling the retail giant to keep up with trends in fast-moving markets.

The rest, as they say, is history.

There was only one problem. This sea of change wasn't self-limiting.

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