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The loss of jobs resulting from U.S. corporations outsourcing production to foreign countries is emerging as a key issue in many elections this fall.
Democrats – and some Republicans – are especially criticizing opponents for favoring policies that shift jobs to China, and Democratic pollsters/advisors Stanley Greenberg and James Carville find from their surveys that fair trade arguments effectively persuade voters to support Democratic candidates.
Even cursory conversations in working-class neighborhoods shows high concern about offshoring jobs. But it’s a top concern of moderately affluent professionals as well, as a striking recent Wall Street Journal poll revealed. Since 1999, the percentage of Americans who think free-trade agreements have hurt the country has risen dramatically, from 32 percent to 53 percent (while only about 18 percent currently think they’ve helped).
Tapping into the public anxiety about offshoring job losses, the AFL-CIO and its community affiliate, Working America, last week unveiled a new website feature called “Job Tracker” that allows anyone to search by zip code for companies that have outsourced jobs. While it is unlikely in itself to influence the elections, AFL-CIO president Richard Trumka hopes it will help stimulate interest in policy proposals such as forcing Chinese currency revaluation and ending tax breaks that support increased job exports, in particular permitting multinational corporations to defer repatriating overseas earnings indefinitely and granting tax deductions when companies close U.S. facilities and move out of the country.
When Job Tracker became available, I logged on and entered my home zip code in Chicago to find out which corporations within a 50 mile radius were sending jobs out of the country. The map was jammed with multicolor “pushpins” identifying corporate miscreants, not just job outsourcers but also violators of labor, safety and federal contracting laws – including 77 companies that had shipped jobs offshore, 43 where there had been layoffs due to trade, 364 that had posted notices of mass layoffs, and 6,594 Occupational Safety and Health Act violators.
It was a revealing snapshot, one you would be hard-pressed to find anywhere else. Staff and five extra researchers spent months working for the AFL-CIO and Working America to create a site similar to Executive Paywatch, the successful feature introduced in 1997 that monitors CEO compensation. It draws on data such as trade adjustment assistance, mass layoff notices, and news reports, often for the past five years but covering a decade for health and safety as well as labor law violations.
“But it’s only the tip of the iceberg,” says Working America executive director Karen Nussbaum. Since 2004 to 2005, when outsourcing overseas was a headline issue, companies have deliberately obscured how much offshoring occurs to lower the public profile of the issue, Nussbaum says.
It’s easy, since current federal data collection, according to a Bureau of National Affairs summary of three independent studies, “prevent any meaningful understanding of the scope of offshoring, the scale of U.S. job losses, the business and occupations being affected, and the economy’s potential responses to unabated offshoring.”
In an eye-opening, concise report also made public with the Job Tracker–Outsourced – Sending Jobs Overseas: The Cost to America’s Economy and Working Families, Working America and the AFL-CIO offer persuasive evidence that the problem is big and growing, not just for manufacturing – such as Hershey Foods Corporation moving its Hershey, Pa., production to Mexico — but also for services.
Cornell University researchers, for example, estimated that in 2004 U.S. firms offshored roughly 400,000 jobs, virtually double the number in 2001. Then Duke University and the Conference Board surveyed 1,600 service companies in 2008 and found that 53 percent had developed an offshoring strategy, double the number in 2004.
Also, 60 percent of those who reported plans said they would accelerate offshoring in the next three years, most rapidly among those who were new to shifting work out of the country. The industries with the highest rate of offshoring plans were not primarily low-skill or manufacturing industries but – in order of offshoring intensity – information technology, software development, engineering, marketing and sales, call centers, and finance or accounting.
But the report focuses on the real decline in manufacturing establishments – down 57,000 since 1998. Imports have deeply penetrated and replaced domestic production (for example, growing from 1997 to 2007 as a share of 114 high-tech and capital goods sectors from 21.4 percent of U.S. consumption to 34.3 percent). Those are precisely the kind of industries where the U.S. should be a leading exporter, as Germany is, even according to apologists for the shift of production of shoes, clothes, textiles, furniture and consumer electronics overseas. Some of the biggest increases in import penetration were in broadcasting and wireless equipment, telephone switch equipment, computers, turbines, and industrial controls – all areas where the U.S. could and should be a leading manufacturer.
Even in semiconductors and aerospace U.S. production is declining (even though many of the offshoring companies are raking up profits even during the deep recession and its aftermath). Indeed, Boeing’s problems delivering its 77 Dreamliner on time stem from its accelerated global sourcing. Since 1990 the aerospace industry has lost 40 percent of its production workers and more than half of its science and engineering workforce, much of it due to overseas outsourcing.
The companies themselves are largely thriving with their lower-wage global workforce, despite problems such as Boeing encountered. IBM, once a national champion, has for years been increasingly global: the U.S. share of its workforce dropped from 40 percent in 2005 to 25 percent in 2009.
The measures that the AFL-CIO promotes – on Chinese currency value and corporate tax breaks – are warranted, but far short of what’s needed. And the country needs more than a few last-minute ads on job offshoring. Maybe Job Tracker will give a small boost to more substantial, renewed discussion of U.S. jobs in the global economy in coming years.
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David Moberg, a senior editor of In These Times, has been on the staff of the magazine since it began publishing in 1976. Before joining In These Times, he completed his work for a Ph.D. in anthropology at the University of Chicago and worked for Newsweek. He has received fellowships from the John D. and Catherine T. MacArthur Foundation and the Nation Institute for research on the new global economy.