Posted on: Monday, June 14, 2004
Study finds jobs not flooding offshore
| • | Unions tackle offshoring |
By Michael Oneal
Chicago Tribune
The Labor Department has released a new survey suggesting that jobs are trickling — not gushing — overseas because of outsourcing.
Coming atop the spate of good news about U.S. job creation over the last few months, the report may help reduce some of the anxiety over the nation's labor situation.
But experts quickly said the government's first attempt to get its arms around the outsourcing trend almost certainly understates the true number of jobs being lost to countries like China and India.
Noting that the report doesn't count jobs created in other countries at the expense of job creation in the United States, Stephanie Moore, an analyst at Forrester Research said, "There's still a big difference between folks laying off people here and folks hiring overseas."
The Bureau of Labor Statistics said that 4,633 workers' jobs were shipped to other countries in the first quarter. That number represents only 2 percent of the 239,361 workers who lost jobs because of mass layoffs during the first three months of the year.
The survey said that far more people — almost 10,000 — lost their jobs when work was moved elsewhere in the United States. All told, these dislocations were only 6 percent of the total number of lost jobs.
Outsourcing is concentrated in the manufacturing sector, the numbers showed. Almost 70 percent of the jobs shifted to new locations involved production workers. Not coincidentally, the Midwest — where a disproportionate number of manufacturers are located — took the largest hit in terms of job losses.
There were a total of 1,204 layoff "events" during the quarter across the nation, the report said. Of those, only 119 involved moving jobs overseas or elsewhere in the United States.
While economists generally agree that the number of jobs lost because of outsourcing is small compared to the total job market, they are unlikely to find convincing proof of their argument in the report.
Even Lewis Siegel, a senior economist at the Bureau of Labor Statistics, acknowledged that the survey provided only a "little piece" of the outsourcing picture.
The survey, which will be conducted each quarter as part of the Labor Department's regular tally of mass layoffs, does not measure job losses at companies with fewer than 50 employees. And it doesn't count layoffs of 50 people or less.
Moreover, the survey doesn't take into account instances when companies fail to draw a direct correlation between layoffs here and hiring abroad. Often, outsourcing efforts involve changing the way a company does business, making it hard to draw a cause-and-effect relationship between firing and hiring, experts said.
Given all these gray areas, some experts said it is easy for companies to interpret questions on a government survey as they see fit — especially given the political firestorm over outsourcing.
"Companies don't have a lot of incentive to be forthcoming," said Thea Lee, chief international economist at the AFL-CIO, the umbrella organization for American labor unions.
Siegel said Labor Secretary Elaine Chow asked for the survey in an attempt to fill the government's woeful lack of data on the outsourcing trend.
Most experts welcomed the new survey, regardless of its limitations. "It's another data point to extrapolate against," said Forester Vice President John McCarthy.
