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How Many Jobs Are Involved?

The figures that are really driving this debate are the projections. Most analysts see the current situation as the beginning of what is expected to be a rapidly escalating trend. A Goldman-Sachs study estimates that as many as 6 million jobs could move overseas in the next decade. A survey by the Chicago consulting firm DiamondCluster International, Inc. found that 86 percent of corporate executives polled expect to send more technology jobs abroad in the next year, compared with 32 percent two years ago.

Other projections include:

  • 10 percent of U.S. technology jobs will have moved offshore by 2005 (Gartner Group)
  • up to 25 percent of traditional IT jobs will be relocated from developed to developing countries by 2010 (Gartner Group)
  • 500,000 financial services jobs (8 percent of all U.S. jobs in banking, brokerage and insurance) will be shipped overseas by May 2008 (AT Kearney)

There is no reliable data on the total number of U.S. jobs that have already been lost to offshoring (see New York Times article). Measurement issues and other methodological problems have generated a confusing array of estimates of how many U.S. jobs have been sent abroad in recent years. The key problem for many analysts has been defining and systematically linking domestic job losses with positions created overseas by U.S. companies. For example, Intel and the computer company Dell, Inc., have each been adding significant numbers of jobs at their offshore locations while maintaining a relatively steady proportion of their workforce in the United States. The work being done overseas is not exclusively for overseas customers and might otherwise have led to increased U.S. hiring – but such shifts are not usually included in estimates of offshoring. Another problem has been that researchers have not stated clearly whether their figures include all service workers, only technology or professional workers, or some combination of these three overlapping groups.

In terms of the exact amount of government contract work that is offshored, the picture becomes even murkier. State and federal governments usually do not track where the work is done by the private contractor after the contract has been awarded. In many cases involving offshored government work, the contract was awarded to a U.S. firm that then subcontracted with an overseas affiliate or third-party service provider. Thus, while there are now many well-known anecdotal examples of state government work being sent offshore, no data have been collected on the extent of the practice. Steps have already been taken by some state and federal officials to begin gathering this information.

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