WASHINGTON - The United States will lose more than 400,000 jobs this year to Mexico, China, India and other Asian nations as multinational corporations restructure operations and shift production overseas, a study showed.

The number of jobs lost will be around double those three years ago, according to the study by Cornell University and the University of Massachusetts for the US-China Economic and Security Review Commission.

The study came amid heated debate ahead of the November 2 presidential elections on outsourcing of jobs to China, India and other developing economies and its adverse impacts on employment at home.

White House aspirant Senator John Kerry has vowed to plug tax loopholes to discourage companies from moving their operations abroad to check unemployment, if he unseats incumbent George W. Bush.

The study projected that nearly 100,000 jobs would move to China in 2004 based on extrapolating data collected between January and March this year.

"These data suggest that in 2004 as many as 406,000 jobs will be shifted from the US to other countries compared to 204,000 jobs in 2001," of which nearly a quarter will go to China, it said.

Production shifts with consequent employment loss had spread across the US economy and now affect sophisticated manufacturing industries, services, and information technology.

All regions were hit by the production shifts, but the Midwest had been especially hard hit, the commission said in a statement.

The commission was set up to review the national security implications of trade and economic ties between the United States and China.

The study said companies engaged in production shifts "tend to be large, publicly held, highly profitable, and well established."

The principal motive for production shifts to China was cost reduction rather than producing for the massive Chinese market.

Jobs lost because of production shifts far exceeded that reported by the Bureau of Labor Statistics in its report on mass layoffs due to overseas relocation, the commission said.

It added that "trade adjustment assistance" to workers laid-off owing to overseas job relocation was poor, covering less than one-third of the cases where production shifts occur.

Among other key findings was that production shifts out of the United States, particularly to Mexico, China, India, and other Asian countries, had seen a major increase in the last three years, the study said.

The pace of job shifts to China has "grown considerably" over the last three years, the study said.

Over the same period, job shifting to India has grown at a faster pace -- albeit from a much lower base.

During just the first three months of this year, there were 58 such shifts to China documented across a range of industries as compared to 25 shifts to China during a similar period in 2001.

© Copyright 2004 AFP

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