The transfer of jobs abroad accounted for a small fraction of U.S. layoffs in the first quarter of the year, according to a government survey released yesterday. The finding provides ammunition to economists who contend that the "offshoring" of American jobs poses less of an economic threat than is popularly believed.
The report, issued by the Bureau of Labor Statistics, marked the first government effort to quantify the offshoring problem. It found that among 182,456 people laid off for reasons other than seasonal or vacation factors, only about 2.5 percent, or 4,633, lost their jobs for reasons "associated with the movement of work outside the country."
But the figures were based on a survey of a limited sample of companies, and because of other statistical flaws it is unlikely to quell the concern that erupted last year over widely publicized cases of Americans losing their jobs to people in India and China earning a fraction of typical U.S. wages.
Thea M. Lee, chief international economist at the AFL-CIO, called the report "pretty lame," arguing that the main problem with it was the way the companies were queried.
"This is a company checking a box on a survey, and having little incentive to be completely forthcoming" about why it laid off a large number of employees, Lee said. "There's no kind of follow-up or investigation on the part of the BLS. So I don't think this is a particularly good way of doing an exhaustive measure of job loss. It's good they've gone in that direction, but it's not useful for the purpose of knowing what percentage of jobs lost have actually been outsourced."
Still, the report underscores that job losses can occur for myriad reasons such as technological advancements. It also comes at a time when the offshoring issue has become less heated, in large part because of an upturn in the economy that has added nearly 1 million jobs over the past three months. It may thus provide further solace to the Bush administration, which came under criticism earlier this year when the chairman of the Council of Economic Advisers, N. Gregory Mankiw, described the movement of some jobs overseas as "probably a plus for the economy in the long run." Although many economists rushed to Mankiw's defense, he was clarified his comments by stating that "any loss of jobs is regrettable."
The survey covered only companies employing at least 50 workers where at least 50 employees were laid off. Acknowledging the survey's limitations, the BLS news release noted that the data "do not reflect layoffs of less than 50 at these companies, nor do they capture layoffs occurring at establishments with less than 50 workers."
For that reason, Dean Baker, co-director of the left-leaning Center for Economic and Policy Research, said the report is far from conclusive.
"You're only looking at layoffs of more than 50 people, and relying on their self-reporting," he said. "Clearly this is only a tiny fraction of the jobs that have been lost to outsourcing."