systematicHR

2.4% of U.S. jobs have been lost to outsourcing and offshoring since 2003. That’s the bad news. The good news is that if you trend all job gains and losses due to outsourcing and offshorig (trade) over time, 2.4% is totally insignificant. ((Groshen, Erica L. , Hobijn, Bart , and McConnell, Margaret M., August 2005. “U.S. Jobs Gained and Lost through Trade: A Net Measure,” Current Issues in Economics and Finance, Volume 11, Number 8 August 2005. Federal Reserve Bank of New York.))

We have two main findings. First,we determine that the offshoring of jobs has been a limited phenomenon: Our comprehensive estimate of the number of jobs embodied in U.S. net imports is small relative to total employment in the United States1—2.4 percent of the total, at the most— both historically and in recent years.Moreover, this estimate is sometimes positive and sometimes negative, suggesting that international trade does not necessarily mean a loss of jobs for the United States.

Second, we find no evidence to support the claims that a surge in offshoring played a large role in the jobless recovery. Jobs embodied in net imports did not grow at an accelerated pace after the 2001 recession. In fact, the increase in U.S. jobs sent abroad has averaged about 30,000 per month since 2001— a deceleration from the monthly average increase of 45,000 jobs during the period from 1997 to 2001.

More broadly, our results show no clear or necessary relationship between a pickup in jobs lost to trade and weakness in the U.S. labor market. A case in point is the 1997-2001 acceleration in offshoring, which occurred when U.S. payrolls were expanding steadily. Groshen, Erica L. , Hobijn, Bart , and McConnell, Margaret M., August 2005. “U.S. Jobs Gained and Lost through Trade: A Net Measure,” Current Issues in Economics and Finance, Volume 11, Number 8 August 2005. Federal Reserve Bank of New York. (())

The study then goes on to look at several “myths,” one of which is that offshoring has caused layoffs in the U.S. These authors from the New York Federal Reserve Bank take quite a quantitative and statistical approach to looking at how offshoring affects job availability and quite effectively squashes the popular view that “the Chinese and Indians are to blame for all our problems.” At least now when I’m arguing with someone about this, I’ll have statistics behind me.