In the Press

Congress Daily

Second Outsourcing Wave Linked To 'Jobless Recovery'

By MICHAEL POSNER

Thursday, December 11, 2003

While much attention is being paid to industrial job losses, some experts expect more focus on a new wave of job losses as companies farm out more service jobs to India and other countries. At a Capitol Hill symposium today sponsored by the Information Policy Institute, economists and academics seemed to agree on one point: Because of globalization, more call centers, information technology, insurance, accounting and other service jobs will be moving to countries with educated workers and low pay, such as India. If the first exodus of jobs -- estimated at over 3 million since 2001 -- was centered in manufacturing, then a second wave of jobs flowing overseas is getting larger.

While analysts agreed that back-office jobs are moving out, there is disagreement over the exact size and pace, and over whether outsourcing is a reason for the "jobless recovery." Rolf Lundberg, a senior official of the U.S. Chamber of Commerce, cited one study that said 400,000 to 500,000 information technology and other jobs have gone overseas and by 2015 the number is expected to go to 3 million to 3.5 million. However, Martin Kenney, a University of California system professor who has written about service jobs in India, figured those numbers might be low. In India alone, he said there might be close to 500,000 information technology and other jobs that once were in the United States, and by 2008 the total might reach 1.2 million in India alone.

There was little agreement among panelists on steps to counter any major threat to the U.S. economy that outsourcing might pose. Officials nevertheless expect "a flurry" of legislation to restrict exportation. One measure already in the omnibus appropriations bill, awaiting final action by the Senate, would prohibit some outsourced federal jobs to be based overseas. Lundberg of the Chamber opposed this provision. But AFL-CIO economist Ron Blackwell said that if the first wave of job losses affected blue-collar workers, white-collar workers would comprise a following wave. He agreed outsourcing was an outgrowth of globalization. But he said corporate executives "cannot be let off the hook" when they decide to relocate personnel overseas. He said just as the United States pushes for protection of international copyrights, it should also promote human rights protection as well.

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