An Offshoring Ripple
A new study dispels fears of widespread job losses to overseas outsourcing, concluding that a paltry 4 percent of all job losses stemmed from outsourcing.
Jacob Funk Kirkegaard of the Peterson Institute for International Economics says, “The heated public and political debate … has been vastly overblown.”
Kirkegaard examined data from the Bureau of Labor Statistics involving 1 million layoffs in 2004 and 2005 and discovered that almost a quarter of the job losses were prompted by “contract completion,” 16 percent from downsizing and 10 percent as a result of financial difficulties and bankruptcies.
He traced 12 percent of the layoffs to outsourcing, but found that two thirds were outsourced domestically. Only 4 percent of all jobs were thus lost to offshoring, or overseas outsourcing.
A similar European survey attributed 5 percent of all job losses to offshoring.
Economists believe that almost a fifth of all U.S. jobs could theoretically move abroad.
A survey by the consulting firm A.T. Kearney identified several impediments to offshoring.