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Outsourcing doubled in last four years Original Source Link: (May no longer be active)
http://www.crmbuyer.com/story/Outsourcing-Doubled-Nationwide-in-Past-Four-Years-37501.htmlhttp://www.crmbuyer.com/story/Outsourcing-Doubled-Nationwide-in-Past-Four-Years-37501.html
Outsourcing Doubled Nationwide in Past Four Years
By Mara Lee
Dayton Daily News
10/21/04 9:24 AM PT
The Congressional report said the jobs that left the country were disproportionately unionized, even considering that manufacturing has a higher share of union jobs. That "means that the jobs leaving the U.S. are more likely to be good jobs, with full health care and pension plans, making the costs of those production shifts to workers and communities even higher," the report said.
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A bipartisan commission appointed by Congress to study U.S.-China trade relations estimates that U.S. jobs lost to other countries doubled from 2001 to 2004.
In the first three months of this year, the researchers determined about 23,000 jobs nationwide went to Mexico, more than three times as many as those going to China, and six times as many as those going to India.
"There is a hemorrhaging of major proportions that we need to be worried about," said Dick D'Amato, chairman of the U.S. China Economic and Security Review Commission.
Auto and IT
Auto parts manufacturing ranked second behind information technology/call centers for the greatest number of jobs that went abroad.
Researchers from Cornell University and University of Massachusetts combed through corporate disclosure statements and media reports to identify the losses, and they believe they missed many examples because companies are seeking to avoid publicity about offshoring.
Nationwide, 83 percent of the offshoring was in manufacturing. In the Midwest, it was 94 percent.
Most of the jobs that went to Mexico were unionized.
Unions Hit Hard
The report said the jobs that left the country were disproportionately unionized, even considering that manufacturing has a higher share of union jobs.
That "means that the jobs leaving the U.S. are more likely to be good jobs, with full health care and pension plans, making the costs of those production shifts to workers and communities even higher," the report said.
Denny Thomas, regional director for the International Union of Electrical Workers, said, "It's just been devastating." Delphi (NYSE: DPH) Corp., for example, has shed at least 7,000 Dayton, Ohio-area workers in recent years, mostly through retirements, Thomas said.
When people have to take service jobs without health insurance instead of manufacturing jobs with insurance, it affects everyone, he said. "The hospitals generally don't turn anybody away. Somebody has to foot the bill, and usually it's the taxpayer," Thomas said.
Mexican Competition
He said Mexican workers at Delphi make about $3.75 hourly, but that's not the only motivation for outsourcing . The tax code rewards U.S. multinational corporations with jobs abroad because foreign profits aren't subject to income taxes. The report found 72 percent of the job loss was at U.S. multinationals.
Only 31 percent of the unemployed workers applied for Trade Adjustment Assistance, a federal program that gives longer unemployment benefits and tuition grants to workers hurt by foreign competition. Researchers said that's partly because white-collar workers aren't eligible for TAA, and partly because companies deny they're shifting jobs overseas.
The commission was established because many members of Congress are worried that trade with China is not conducted on a level playing field.
"We're very concerned that the international trading system is being bullied by the Chinese," D'Amato said. China manipulates the value of its currency, he said, and demands technology transfer from U.S. companies as a price of doing business there.
Three years ago, the commission recommended the government begin monitoring job loss to other countries. Again, in Friday's report, the commissioners recommended Congress require the government to track this trend.
© 2004 Dayton Daily News. All rights reserved.
© 2004 ECT News Network. All rights reserved.
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