US / About 29 M employed in offshorable production and services occupations

“Offshoring, also known as offshore outsourcing, is the term that came into use more than a decade ago to describe a practice among companies located in the United States of contracting with businesses beyond U.S. borders to perform services that would otherwise have been provided by in-house employees in white-collar occupations (e.g., computer programmers and systems designers, accounting clerks and accountants)” writes Linda Levine in Offshoring (or Offshore Outsourcing) and Job Loss Among U.S. Workers from CRS (Adapted choosen excerpts by Job Market Monitor to follow)

The term is equally applicable to U.S. firms’ offshoring the jobs of blue-collar workers on textile and auto assembly lines, for example, which has been taking place for many decades. The extension of offshoring from U.S. manufacturers to service providers has heightened public policy concerns about the extent of job loss and the adequacy of existing programs to help unemployed workers adjust to the changing mix of jobs located in the United States so they can find new positions.

No comprehensive data exist on the number of production and services workers who have lost their jobs as a result of the movement of work outside U.S. borders. The only regularly collected statistics on jobs lost to the out-of-country relocation of work come from the U.S. Bureau of Labor Statistics’ (BLS) series on extended mass layoffs. Since 2004, BLS has asked firms with at least 50 employees that let go at least 50 workers in layoffs that lasted 31 or more days whether the firms moved the laid-off workers’ jobs out of the United States. Given the series’ exclusion of small companies and focus on large layoffs, it underestimates the number of jobs lost to offshoring.

Not surprisingly, then, the BLS series has consistently found that relatively few job losses result from the movement of work away from the United States. In the third quarter of 2012 when more than 100,000 workers were separated in extended
mass layoffs, firms told BLS that they let go fewer than 1,600 workers in actions involving the movement of work and that less than 1% of these workers had their jobs moved to another country.

As a result of the dearth of data, some have stepped in to provide more information on the extent of offshoring today and in coming years. Forrester Research, Inc. was the source of perhaps the first and most commonly cited statistics on offshoring of service sector jobs. According to its forecast that appears to have been based on discussions with experts, a total of 3.4 million service-sector jobs might move abroad between 2003 and 2015. Half of the total (1.7 million) was projected to be relocated outside the United States within the first 7 years of the 12-year period, and half over the following 5 years. This indicates that Forrester expected employers to increasingly transfer service activities overseas. Although 3.4 million jobs may sound like a large number, Bhagwati et al. point out that Forrester’s forecasted loss of some 300,000 jobs per year on average through 2015 represents a very small share of the jobs typically created and destroyed each year in the United States.

A study released by the Brookings Institution built upon the work of Bardhan and Kroll, Forrester Research, and others to develop projections of the share of jobs in 246 metropolitan areas that might be lost due to services offshoring over the 2004-2015 period. The researchers concluded that offshoring may not greatly affect employment in most metropolitan areas, with just 2.2% of the jobs in these 246 areas likely to be offshored between 2004 and 2015.

Researchers have tried to fill this gap by determining which occupations possess characteristics that make them relatively vulnerable to being offshored (e.g., routine task content and able to be performed at a distance from customers due to advances in communications technology) and the number of persons employed in those occupations in a given year. Those studies usually have focused on occupations that provide services. One analysis by the BLS estimated that in 2007, 30 million people were employed in service-providing occupations it found to be potentially offshorable; they accounted for over one-fifth of total employment in that year. The serviceproviding occupations that BLS deemed most vulnerable to being offshored had quite different skill requirements: administrative support occupations (e.g., office clerks) typically have lower education or training requirements than professional and related occupations (e.g., computer programmers). One of the few studies that includes both production and services occupations similarly concluded that, whether measured by education or wages, jobs with offshorable characteristics run the gamut from less to more skilled. According to one of Blinder’s estimates, about 29 million workers were employed in offshorable production and services occupations, or a little over one-fifth of total U.S. employment in 2004.

This approach may overstate the number of jobs that actually have been or will be lost to offshoring because it does not consider other factors that may affect employers’ decisions about the location in which work is performed. Some observers note cases of firms bringing jobs back to the United States for such reasons as dissatisfaction with the quality of service being provided, narrowing of the wage gap between U.S. and some nations’ workers, and increases in the cost of shipping goods to the United States. Others point to strategies that offshore outsourcers have used to work around some obstacles.

Source: 

via CRS — Offshoring (or Offshore Outsourcing) and Job Loss Among U.S. Workers