America has lost millions of private-sector jobs. Where have all the jobs gone? Overseas, in many cases. In addition to cutting jobs due to the recession and to increase profitability, companies are looking overseas to save money in labor costs.
According to Forrester Research, over the next fifteen years over three million US service industry jobs and up to $136 billion in wages will move overseas to countries including India, Russia, China and the Philippines. Forrester also notes that 88% of the firms said they got better value for their money overseas and 71% said overseas workers did better quality work.
A Deloitte Research survey reports that the world's 100 largest financial-services companies expect to transfer about $356 billion of their operations and two million jobs offshore over the next five years. "Offshoring is gaining momentum at a rapid pace," says Christopher Gentle, a director at Deloitte Research.
On a similar note, Gartner Inc. predicts that one of 10 jobs in the computer services and software industry could move abroad by the end of 2004. It's not just technology jobs that are leaving the United States. Jobs in just about every sector are going abroad including mortgage processors, claims adjusters, financial analysts, telemarketers and a variety of other job titles.
A computer industry acquaintance told me how his company had a office up and running in India in less than thirty days and how the salaries they were paying overseas workers were averaging $20,000 a year compared to a $100,000 for a United States employee.
Some of the companies moving jobs overseas include General Electric, Boeing, IBM, Microsoft, Citigroup, Hewlett Packard and ATT. Sprint is considering outsourcing hundreds of jobs and sending them offshore. It's not only the private sector. Government agencies in 40 states and Washington, DC are using foreign workers staffing help desks to handle customer service for food stamp inquiries.
Protecting American Jobs
What can be done to protect American jobs? One suggestion is to remove tax incentives to American firms that are shifting jobs. Former presidential candidate, John Kerry, said in an AFL-CIO interview that "...companies move offshore simply to avoid paying American taxes, yet they still get all of the same benefits, including government contracts. We should penalize these companies and deny them government contracts."
A NetworkWorldFusion article, quotes consultant Jack Heacock, who wonders whether the U.S. should impose tariffs on overseas call centers, "to better balance the playing field and the U.S. economy and information privacy."
In addition, labor unions and technical worker alliances are lobbying Congress. While states, including New Jersey, North Carolina and South Carolina, are considering legislation to prevent tax-payer funded jobs from being shifted overseas.