New Jobs Are Leaving

By Henry Duarte

The numbers are startling: 3.3 million jobs in less than 15 years. That’s the number of U.S. jobs expected to be lost overseas by 2015 according to a recent report by Forrester Research. But the sheer size of the exodus isn’t what’s worrying analysts the most, it’s the type of jobs. Some critics are worried that this time it’s the corporate main office is getting ready to shut down and head out of the country, packing up cubicles and all. As reported on NOW, a new wave of jobs are leaving U.S. shores: software development, customer service, accounting, back-office support, product development and other white collar endeavors.

In late 2002, computer giant Oracle announced that it would double its workforce in India. Texas Instruments already employs over 1,000 engineers at a Bangalore campus, and has made plans for a much bigger presence in the near future. In November of 2002, Microsoft Chairman Bill Gates announced that the company will be making investments of approximately $400 million in India.

And, It’s not just technology jobs that have ended up in India. Charles Schwab recently moved part of its information technology division to a contractor in Bangalore, India. AOL already has a large presence in India. American Express and British Airways have ramped up their employment in the country during the past year as well.

Frontline World reported last year that over half of Fortune 500 companies have moved jobs offshore, including famous names from many fields: Oracle, Dell, HSBC, Delta Air Lines, Novartis, J.P. Morgan Chase, Hewlett-Packard, American Express, British Airways. More are expected to follow.

According to the U.S. Bureau of Labor Statistics, jobs separations due to overseas relocation are at their highest level since 1995.*

Projected Number of U.S. Jobs to Move Overseas

Source: Forrester Research, Inc. Nov., 2002

And where are those jobs going? Many are indeed going to India, as portrayed in NOW’s story, but others are heading to China, Russia, Vietnam, the Phillipines, Malaysia and the Czech Republic. In short, they are moving toward cheaper labor costs. In November 2003, Bangalore will be hosting a huge IT job conference, Bangalore IT.com 2003, the largest IT conference in all of Asia. Intel and IBM are among the sponsors.

It should be noted that while salaries are much lower in India and other BPO hot spots, that does not mean that the companies are providing inadequate compensation — the cost of living is significantly lower in India. However, as both The Times of India and The Economist have recently noted, some jobs are in turn leaving India for even cheaper locales.

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The Ewing Marion Kauffman Foundation
of Kansas City works with partners to advance entrepreneurship in America and improve the education of children and youth. The Kauffman Foundation was established in the mid-1960s by the late entrepreneur and philanthropist Ewing Marion Kauffman. Information about the Kauffman Foundation is available at www.kauffman.org. •
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Source: Statistics for overeas relocation
Paaras Group, 2002; International Labour Organization.

Statistics for overeas relocation are kept for job separations which result in at least 50 initial claims. •