Most Outsourced Jobs Stay in U.S.

From Reuters

The bulk of outsourced jobs never leave U.S. shores, the government said Thursday in a report suggesting that concerns over American workers losing jobs to cheaper foreign labor may be exaggerated.

Nine percent of nonseasonal U.S. layoffs in the first quarter were because of outsourcing, but less than a third of the work was sent overseas, the Labor Department said in releasing figures on mass layoffs and outsourcing.

“In more than seven out of 10 cases, the work activities were reassigned to places elsewhere in the U.S.,” the Bureau of Labor Statistics said in its report on mass layoffs for the January-to-March period.


In other government economic reports released Thursday, U.S. import prices rose more than anticipated in May as oil costs surged, adding to worries about inflation, while U.S. jobless claims rose unexpectedly last week.

The latest report on outsourcing comes as organized labor, critical of the administration’s record on jobs, has promised to make outsourcing an issue in this year’s presidential election.

Although the figures offer the first official measure of the effect of outsourcing on U.S. employment, they count only layoffs at companies where at least 50 people filed for unemployment insurance during a five-week period and the layoff lasted more than 30 days.

That restriction means the figures do not capture the effect outsourcing has had on small businesses.

In the first three months of the year, 4,633 U.S. workers were laid off because their jobs were moved to a foreign country, the bureau said. That represents less than 2% of the mass layoffs that totaled 239,361 during that period.

When seasonal and vacation-related mass layoffs are excluded, the proportion of workers who lost their jobs because of overseas outsourcing rises to about 2.5 out of 100.


An additional 9,985 workers lost their jobs because the work moved to a different site within the U.S., the bureau said.

However, the report showed outsourcing had a huge effect on whether work sites were permanently or just temporarily shut down. Fifty-one percent of mass layoffs caused by outsourcing were because of permanent closures of the work site, compared with 17% of total layoffs.

A large proportion of mass layoffs in the U.S. are because of seasonal factors -- such as winter layoffs in agriculture or summer shutdowns at manufacturing plants -- and about two-thirds last less than a month.


* Import prices climbed 1.6%, notching the biggest one-month rise since February of last year and the eighth consecutive monthly advance, after a revised 0.2% gain in April, the Labor Department said.

The rise was double the 0.8% increase Wall Street analysts had anticipated and signals a boost in inflation. Higher price pressures have fueled expectations policymakers will move sooner rather than later to raise interest rates.

* The number of Americans filing initial claims for jobless insurance rose 12,000 last week to 352,000, the Labor Department reported. Despite the rise in layoffs, economists still consider claims near the 350,000 level as a token of an improving labor market.


Wall Street analysts had forecast a fall in claims to 335,000 from a revised 340,000 the previous week. This was originally reported as 339,000.

The four-week moving average of filings, which smooths weekly fluctuations to provide a better picture of underlying trends, rose 4,750 to 346,000, the highest level since the week of April 24, when it was 346,500. The rolling average had hit its lowest level since late 2000 the week of May 15.