New BLS Offshoring Study Captures Only Half the Issue

The Labor Department released a new survey Thursday suggesting that jobs are trickling, not gushing, overseas due to outsourcing. In my estimation, the study captures only about one-half the issue that needs to be assessed. You may find this summary from the Chicago Tribune to be of interest. Here to download BLS study.

Coming atop the spate of good news about U.S. job creation over the last few months, the report may help reduce some of the anxiety over the nation's labor situation.

But experts quickly said the government's first attempt to get its arms around the outsourcing trend almost certainly understates the true number of jobs being lost to such countries as China and India.

Noting that the report doesn't count jobs created in other countries at the expense of job creation in the U.S., Stephanie Moore, a vice president at Forrester Research said, "There's still a big difference between folks laying off people here and folks hiring overseas."

The Bureau of Labor Statistics said that 4,633 workers' jobs were shipped to other countries in the first quarter. That number represents a tiny 2 percent of the 239,361 workers who lost jobs due to mass layoffs during the first three months of the year.

The survey said that far more people--almost 10,000--lost their jobs when work was moved elsewhere in the U.S. All told, these dislocations were only 6 percent of the total number of lost jobs.

Outsourcing is concentrated in the manufacturing sector, the numbers showed. Almost 70 percent of the jobs shifted to new locations involved production workers. Not coincidentally, the Midwest, where a disproportionate number of manufacturers are located, took the largest hit in terms of job losses.

There were a total of 1,204 layoff "events" during the quarter across the nation, the report said. Of those, only 119 involved moving jobs overseas or elsewhere in the U.S.

While economists generally agree that the number of jobs lost due to outsourcing is small compared to the total job market, they are unlikely to find convincing proof of their argument in the report.

Even Lewis Siegel, a senior economist at the Bureau of Labor Statistics, acknowledged that the survey provided only a "little piece" of the total outsourcing picture.

The survey, which will be conducted each quarter as part of the Labor Department's regular tally of mass layoffs, does not measure job losses at companies with fewer than 50 employees. And it doesn't count layoffs of 50 people or fewer.

Moreover, the survey doesn't take into account instances when companies fail to draw a direct correlation between layoffs here and hiring abroad. Often, outsourcing efforts involve changing the way a company does business, making it hard to draw a cause-and-effect relationship between firing and hiring, experts said.