US expects to lose more IT jobs to offshoring

A US government report indicates that offshore outsourcing could harm IT employment growth over the next decade.

A US government report indicates that offshore outsourcing could harm IT employment growth over the next decade. 

But the study is sprinkled with caveats and qualifiers because US government data cannot provide a complete picture of the economic impact of the use of offshore labour. 

At best, the Government Accountability Offfice, which compiled the report, said the data provides only "some clues" to the extent of offshoring activity in the US economy.

And while offshoring is "a small but growing trend", further efforts will be needed to understand it, the report said. 

For instance, the study found that while total US employment is projected to increase by 15% to 165 million jobs from 2002 to 2012, that figure represents 2.4 million fewer jobs than had earlier been projected for 2000 to 2010. 

The GAO said government projections indicate that IT-related jobs are expected to grow faster than most occupations by 2012. Indeed, seven of the 30 fastest-growing occupations are IT-related.

But the rate of growth for these occupations for the 2002 to 2012 projections is significantly lower than the rate projected for 2000 to 2010. 

The report does not blame offshoring for the change in IT labour growth projections. It cites the recession earlier in this decade, the dotcom bubble of the late 1990s and increases in productivity as potentially contributing to the changed job forecast. 

In terms of offshoring's impact on US workers, the GAO said the Department of Labor's mass layoff survey shows that layoffs attributable to offshoring have increased since 1999, but still represent a small fraction of the workers laid off. 

Of the 1.5 million layoffs reported in 2003, 0.9% were due to overseas relocation - and most of those were in the manufacturing sector. But the survey covers only large companies and those that had at least 50 layoffs in a five-week period. 

Although some private analysts predict job losses from offshoring in the range of 100,000 to 500,000 during the next five years, the GAO also cited arguments that offshore outsourcing will lead to productivity gains in the US. 

Patrick Thibodeau writes for Computerworld

Read more on IT outsourcing