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

Offshoring (or Offshore Outsourcing) and Job Loss Among U.S. Workers, Linda Levine, Specialist in Labor Economics. December 17, 2012

  • “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). 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.”
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