Off shore job rates called inflated

Outsourcing and offshoring of jobs have become a scourge for many Americans, but a trade policy expert on Thursday said the hubbub is unwarranted.

Speaking at the National Conference of State Legislatures at the Salt Palace, Brink Lindsey, senior fellow and director of the Center for Trade Policy Studies at the Cato Institute, said the number of U.S. jobs lost to outsourcing and offshoring is small relative to the entire economy.

Lindsey said only 2.5 percent of U.S. job losses were due to offshoring.

"So, if you slay the outsourcing beast, you stop it dead in its tracks, you've done absolutely nothing about 97 1/2 percent of the layoffs," he said.

"Outsourcing is a red herring. I'm not saying it's irrelevant, but it's a tiny part of the big picture, and the amount of attention that it has been receiving is utterly disproportionate to its importance to the American economy. Job losses are driven overwhelmingly by factors other than import competition and relocating jobs overseas."

Those factors include technology advances that allow work to be performed anywhere, he said.

"It's very tempting to blame the pain of job losses on a foreign bogeyman. That way you don't have to point the finger at any of your neighbors. But it's fundamentally dishonest, because if you put a wall around the U.S. economy, you won't stop job churn. All you'll do is make the economy significantly poorer."

Greg LeRoy, director of research company Good Jobs First, said many companies getting taxpayer subsidies are U.S. marketing "shell" companies that have manufacturing offshore. He pointed to studies indicating that more than a half-million U.S. service-sector jobs would be outsourced annually by next year.

In the public sector, 18 companies offshored about $75 million in work from 30 states, but LeRoy said those figures likely are low because of poor disclosure. Forty-two states have food-stamp call-center work done offshore, but six are moving to bring those jobs back to the United States, he said.

Utah legislators have expressed concern in recent months after discovering that eFunds offshores some state government contract work to its call center in India. The center handles calls about the Utah Department of Workforce Services' electronic Horizons welfare benefits cards as part of eFunds' $8 million contract with the department.

Lindsey said protectionist measures would raise the cost of providing government services. Returning 12 offshored jobs would cost New Jersey $900,000, he said.