Friday, June 11, 2004


Most outsourced jobs stay in the United States, a report says, implying we have little to fear of “offshoring” to countries with a cheaper work force.

The U.S. Labor Department report, relatively big news today, says that “In more than seven out of 10 cases, the work activities were reassigned to places elsewhere in the U.S.,” making it about 9 percent of nonseasonal layoffs that can be blamed on offshoring in the first three months of this year.

But the report -- even rejecting fears that the numbers are manipulated like other Bush administration reports -- can be accurate without being all that meaningful.

First, the numbers only record layoffs: at companies employing at least 50 workers; where at least 50 made claims for unemployment benefits; and the layoffs lasted more than 30 days. Also missing from the numbers are jobs created overseas by U.S. companies without directly resulting in a layoff here. So the 4,633 offshored jobs, out of 239,361 total jobs lost in the first quarter, seem small and hint that analysts are wrong to project 3.3 million jobs offshored by 2015.

But there’s a second factor to consider: A watched pot never sends its boiling to be done by cheap labor in other countries -- but an unwatched pot may. Remember the Jan. 7 business roundtable held by chief executives such as Hewlett-Packard’s Carly Fiorina (“There is no job that is America’s God-given right anymore. We have to compete for jobs.”) at which there was little dispute that the jobs were going, just a recommendation that if it wanted to avoid the situation, the United States had better get busy educating, serving up tax breaks and such. Then the backlash began, and no chief executive is going to alarm an entire nation by offshoring energetically while attention, and presidential candidate John Kerry, is focused on the issue. After a couple of these reports, though, showing that people’s fears are overblown ... well, watch the jobs fly.

That brings up a third point why the Labor Department report is worth more than a shrug and a glare: Work tends to cluster, especially in high-tech and biotech, which is why communities from Malaysia to Kendall Square try to build infrastructure supporting an industry and tout it loudly. It’s a circular element mentioned time after time in industry-hungry Massachusetts, where colleges and universities churn out techies who can work in nearby industries which rely on colleges and universities churning out techies. There are also plenty of nearby support industries that exist here to serve the tech industry that relies on nearby support industries. And so on.

When jobs get offshored, it begins to create elsewhere that symbiotic, vital infrastructure. And the more infrastructure elsewhere, the less here. The less here, well, the less reason there is for tech companies to be here. And so on, again.

So how wonderful it is that not many jobs are being sent overseas, but that conclusion merely brings up another troublesome detail: If the Bush administration, and some more independent voices, truly believes offshoring is great for our economy, isn’t this report something of a disappointment?

Mysteriously, it’s almost as though our economy is doing fine without jobs being taken from Americans and sent elsewhere.

Yes, mysterious.

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