grows. These disparate labor market effects suggest that offshoring creates rifts between
high-skilled and low-skilled labor. Rogowski (1989) and Hiscox (2002) have analyzed
trade-related cleavages between labor and capital broadly, yet political divisions between
classes of labor have not received much attention in the literature.
The body of the paper evaluates these two expectations. The first part of the
empirical analysis examines occupational employment and wage data to determine if
increased filming abroad coincided with larger disparities in wages in the motion picture
industry. Consistent with this hypothesis, a bootstrap simulation reveals that increases in
wage inequality from 1998 to 2000/2001 were statistically significant. This suggests that
labor demand stagnated for crew and service labor but not for “creative talent” such as
producers, directors, post-production technicians, and the like.
The second part of the empirical analysis uses the labor market effects to explain
political mobilization for trade measures to curb offshoring. A coalition of labor groups
formed in 1998 to pursue countervailing duties on U.S. movies and television programs
filmed abroad and Section 301 retaliation against foreign film subsidies, a campaign that
many workers in the motion picture industry declined to join. If the labor market effects
of offshoring were driving this political activity, then the supporters of retaliatory trade
measures will be low-skilled manual, service, and crew labor, while the opponents will be
the creative talent and other skilled labor employed in the industry. An ordered probit
analysis finds that skill differences are indeed the dividing factor in this political conflict
over offshoring.
These findings are significant because they bolster the theoretical expectations of
standard trade models against the popular perception that offshoring now threatens well-
educated, high-skilled U.S. workers. Past research on globalization and labor markets
generally concludes that high-skilled U.S. workers benefit while low-skilled workers are
harmed. However, recent accounts of white-collar service jobs, particularly those that
use information technology, moving to low-wage countries have upset this conventional
2
Convention