U.S. underestimates jobs lost to outsourcing, labor experts assert

By Linda Myers

A new report cited on CNN and co-written by Kate Bronfenbrenner, a labor expert at Cornell's School of Industrial and Labor Relations, documented 48,417 U.S. jobs outsourced to other countries or publicly announced as being scheduled for outsourcing, from January through March 2004.

Kate Bronfenbrenner, right, director of Labor Education Research at the School of Industrial and Labor Relations, with researchers, from left, Laura MacDonald, Tamara Lovell and Ed Yoo. Bronfenbrenner's report on jobs outsourcing for a bipartisan Congressional commission documented a new and disturbing trend: many more U.S. white-collar IT and call center jobs are moving overseas to such places as India. Robert Barker/University Photography

The U.S. Bureau of Labor Statistics had reported that only 4,633 private-sector jobs in companies with more than 50 employees were lost during that time period, a gross underestimation, warn the report's authors.

Bronfenbrenner and co-author Stephanie Luce, a faculty member at the University of Massachusetts-Amherst, obtained their information through online tracking of media reports, corporate research and the creation of a database of information on all production shifts announced or confirmed in the media. Their report was commissioned by the U.S.-China Economic and Security Review Commission, which sought the information because there is no government-mandated reporting system to track production shifts from the United States to other countries.

The authors believe their methodology captures only one-third of all production shifts in most cases, which, if true, would bring the actual number of jobs lost to outsourcing in 2004 to 406,000 by year's end, compared with 204,000 in 2001. "We know we're not capturing all the numbers because companies are wary about the negative publicity and often don't share it fully with reporters," said Bronfenbrenner, who is director of Labor Education Research at Cornell's ILR School.

The researchers, who also studied U.S. job outsourcing from October 2000 through April 2001 for a predecessor commission of the bipartisan Congressional group, saw these important differences in their new, 2004 study:

Unlike in 2001, when the majority of job shifts were to single destinations, this year the shifts are to multiple destinations simultaneously, some from the United States to "near shore" or close to home, such as Mexico and Latin America, and some to "off shore" or far away, such as China and other countries in Asia. This trend is global, with companies in European countries also simultaneously shifting jobs to Eastern Europe and Asia, and high-wage Asian countries shifting jobs to low-wage neighboring countries and to China.

Also unlike 2001, white-collar service jobs, particularly ones involving information technology and call centers, are being shifted from the United States and Great Britain to India. That change is especially tough for U.S. service workers because the U.S. Department of Labor's Trade Adjustment Assistance (TAA) program only offers compensation to workers who lost jobs that produced a "product," as defined by TAA rules, state Bronfenbrenner and Luce.

Other key findings included in their executive summary are as follows: