Not Many Jobs Are Sent Abroad
International outsourcing, politicians from both parties often say, has turned into a scourge of American workers, who are losing jobs on a large scale to competition from cheaper workers abroad.
But according to the first government effort to actually measure the phenomenon, such fears may be overblown. A new report released yesterday by the Labor Department on mass layoffs found that in the first quarter of this year, 4,633 workers were laid off because their jobs were moved overseas, a mere 2.5 percent of the total of 182,456 longer-term job losses reported by companies in the period.
Officials acknowledged that the numbers clearly undercount the total number of jobs lost offshore. For one thing, the new data covers layoffs only at companies employing at least 50 workers where at least 50 filed for unemployment insurance and the layoffs lasted more than 30 days. Even more important, the report does not account for jobs created by American companies overseas that did not involve a direct layoff in the United States.
The new data, however, does seem to fortify those experts who have long argued that outsourcing plays a relatively small role compared with other more important factors affecting American job gains and losses.
“Offshoring is not at the heart of the matter,” said Robert B. Reich, who served as labor secretary under President Bill Clinton. “I don’t think it is a major part of the job picture.”
Instead, many experts say, the job market is driven more by rapid productivity growth, allowing companies to accomplish more work with fewer workers; the introduction of new technologies, which destroy many jobs while creating many others; and the overall level of demand in the domestic economy.
Indeed, while nearly three million jobs were lost from March 2001 through August 2003, the recent recovery of the economy has added 1.4 million jobs since then. And despite the job losses the Labor Department found during the first quarter, over all the economy added an estimated 595,000 jobs during that period.