NCPA - National Center for Policy Analysis

JOB LOSS DUE TO OFFSHORING IS INSIGNIFICANT

November 8, 2004

The movement of technology jobs overseas is a growing practice but appears to have a minor impact on the overall economy, according to a new government study by the U.S. Government Accountability Office.

The report's main findings include:

  • The relocation of jobs overseas accounted for 13,000 or 0.9 percent of the 1.5 million layoffs reported in 2003.
  • U.S. imports of business, professional, and technical services grew from $21.2 billion in 1997 to $37.5 billion in 2002, an increase of about 77 percent.
  • Imports of computer and data processing services from India have risen from $8 million in 1997 to $76 million in 2002; India currently ranks as the 8th largest importer to the United States in this sector.

While the negative impacts of offshoring appear small, the report says the benefits to the U.S. economy, such as reduced business costs and increasing domestic employment in other occupations, needs further examination.

Source: "International Trade: Current Government Data Provide Limited Insight into Offshoring of Services," United States Government Accountability Office, September 2004; and Jim Puzzanghera, "Study: Offshoring Is on the Rise but Has Little Effect on Economy," South Mississippi Sun Herald, September 22, 2004.

For GAO text

 

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