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A new study dispels fears of widespread job losses to overseas outsourcing, concluding that a paltry 4 percent of all job losses stemmed from outsourcing.
Jacob Funk Kirkegaard of the Peterson Institute for International Economics says, "The heated public and political debate ... has been vastly overblown."
Kirkegaard examined data from the Bureau of Labor Statistics involving 1 million layoffs in 2004 and 2005 and discovered that almost a quarter of the job losses were prompted by "contract completion," 16 percent from downsizing and 10 percent as a result of financial difficulties and bankruptcies.
He traced 12 percent of the layoffs to outsourcing, but found that two thirds were outsourced domestically. Only 4 percent of all jobs were thus lost to offshoring, or overseas outsourcing.
A similar European survey attributed 5 percent of all job losses to offshoring.
Economists believe that almost a fifth of all U.S. jobs could theoretically move abroad.
A survey by the consulting firm A.T. Kearney identified several impediments to offshoring.
| Cultural and language problems |
80% |
| Lack of skills offshore |
49% |
| Customer complaints |
49% |
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