The loss of jobs resulting from U.S. corporations outsourcing
production to foreign countries is emerging as a key issue in many
elections this fall.
Democrats–and some Republicans–are especially criticizing opponents for favoring policies that shift jobs to China, and Democratic pollsters/advisors Stanley Greenberg and James Carville find from their surveys that fair trade arguments effectively persuade voters to support Democratic candidates.
Even cursory conversations in working-class neighborhoods shows high
concern about offshoring jobs. But it’s a top concern of moderately
affluent professionals as well, as a striking recent Wall Street Journal poll revealed.
Since 1999, the percentage of Americans who think free-trade agreements
have hurt the country has risen dramatically, from 32 percent to 53
percent (while only about 18 percent currently think they’ve helped).
Tapping into the public anxiety about offshoring job losses, the
AFL-CIO and its community affiliate, Working America, last week unveiled
a new website feature called "Job Tracker"
that allows anyone to search by zip code for companies that have
outsourced jobs. While it is unlikely in itself to influence the
elections, AFL-CIO president Richard Trumka hopes it will help stimulate
interest in policy proposals such as forcing Chinese currency
revaluation and ending tax breaks that support increased job exports, in
particular permitting multinational corporations to defer repatriating
overseas earnings indefinitely and granting tax deductions when
companies close U.S. facilities and move out of the country.
When Job Tracker became available, I logged on and entered my
home zip code in Chicago to find out which corporations within a 50
mile radius were sending jobs out of the country. The map was jammed
with multicolor “pushpins” identifying corporate miscreants, not just
job outsourcers but also violators of labor, safety and federal
contracting laws–including 77 companies that had shipped jobs offshore,
43 where there had been layoffs due to trade, 364 that had posted
notices of mass layoffs, and 6,594 Occupational Safety and Health Act
It was a revealing snapshot, one you would be hard-pressed to find
anywhere else. Staff and five extra researchers spent months working
for the AFL-CIO and Working America to create a site similar to
Executive Paywatch, the successful feature introduced in 1997 that
monitors CEO compensation. It draws on data such as trade adjustment
assistance, mass layoff notices, and news reports, often for the past
five years but covering a decade for health and safety as well as labor
“But it’s only the tip of the iceberg,” says Working America
executive director Karen Nussbaum. Since 2004 to 2005, when outsourcing
overseas was a headline issue, companies have deliberately obscured how
much offshoring occurs to lower the public profile of the issue,
It’s easy, since current federal data collection, according to a
Bureau of National Affairs summary of three independent studies,
“prevent any meaningful understanding of the scope of offshoring, the
scale of U.S. job losses, the business and occupations being affected,
and the economy’s potential responses to unabated offshoring.”
In an eye-opening, concise report also made public with the Job Tracker–Outsourced–Sending Jobs Overseas: The Cost to America’s Economy and Working Families,
Working America and the AFL-CIO offer persuasive evidence that the
problem is big and growing, not just for manufacturing–such as Hershey
Foods Corporation moving its Hershey, Pa., production to Mexico—but
also for services.
Cornell University researchers, for example, estimated that in 2004
U.S. firms offshored roughly 400,000 jobs, virtually double the number
in 2001. Then Duke University and the Conference Board surveyed 1,600
service companies in 2008 and found that 53 percent had developed an
offshoring strategy, double the number in 2004.
Also, 60 percent of those who reported plans said they would
accelerate offshoring in the next three years, most rapidly among those
who were new to shifting work out of the country. The industries with
the highest rate of offshoring plans were not primarily low-skill or
manufacturing industries but–in order of offshoring
intensity--information technology, software development, engineering,
marketing and sales, call centers, and finance or accounting.
But the report focuses on the real decline in manufacturing
establishments–down 57,000 since 1998. Imports have deeply penetrated
and replaced domestic production (for example, growing from 1997 to 2007
as a share of 114 high-tech and capital goods sectors from 21.4
percent of U.S. consumption to 34.3 percent). Those are precisely the
kind of industries where the U.S. should be a leading exporter, as
Germany is, even according to apologists for the shift of production of
shoes, clothes, textiles, furniture and consumer electronics overseas.
Some of the biggest increases in import penetration were in
broadcasting and wireless equipment, telephone switch equipment,
computers, turbines, and industrial controls–all areas where the U.S.
could and should be a leading manufacturer.
Even in semiconductors and aerospace U.S. production is declining
(even though many of the offshoring companies are raking up profits even
during the deep recession and its aftermath). Indeed, Boeing’s
problems delivering its 77 Dreamliner on time stem from its accelerated
global sourcing. Since 1990 the aerospace industry has lost 40 percent
of its production workers and more than half of its science and
engineering workforce, much of it due to overseas outsourcing.
The companies themselves are largely thriving with their lower-wage
global workforce, despite problems such as Boeing encountered. IBM, once
a national champion, has for years been increasingly global: the U.S.
share of its workforce dropped from 40 percent in 2005 to 25 percent in
The measures that the AFL-CIO promotes–on Chinese currency value and
corporate tax breaks–are warranted, but far short of what's needed. And
the country needs more than a few last-minute ads on job offshoring.
Maybe Job Tracker will give a small boost to more substantial, renewed
discussion of U.S. jobs in the global economy in coming years.