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Washington, D.C. - A new report from the
Government Accountability Office (GAO) reveals a series of
disturbing findings concerning offshoring. The report,
titled ‘International Trade, Current Government Data Provide
Limited Insight into Offshoring of Services’, also indicates
that existing government data is not able to produce a
complete picture of the full impact of offshoring on the US
economy.
The GAO compiled the information after a request from Rep.
John Dingell, (MI-15), Rep. Ike Skelton, (MO-04), Rep. Jay
Inslee (WA-01), Rep. Adam Smith (WA-09) and Rep. Tammy
Baldwin (WI-02). In a follow-up to the report, the Members
asked Commerce Secretary Donald Evans to address some of the
report’s most critical findings, including the creation of
‘a specific, consistent, useful and scientifically sound
method of measuring outsourcing, its costs and benefits’.
In their letter to Sec. Evans, the Members of Congress asked
for the Administration to provide more information on the
type of taxpayer funded contracts that are being sent
overseas; the implications offshoring has on the federal
budget; and what can be done to make sure the government can
adequately track the offshoring of American jobs.
The GAO report highlighted some troubling characteristics of
the outsourcing of white collar jobs:
· U.S. imports of Business, Professional, and Technical (BPT)
services grew 76.9 percent between 1997 and 2003 – growing
from $21.2 billion to $37.5 billion.
· Between the years 1999 and 2003 the total dollar value of
U.S. government contracts being performed in foreign
countries increased by 64 percent.
· Imports of computer and data processing services have
grown from $636 million in 1997 to $1.1 billion in 2002, an
increase of 66.2 percent. In particular, imports of computer
data processing from India have grown 850 percent over the
same time period.
· Despite somewhat improved job creation in 2004, industries
that are associated with outsourcing (business support, call
centers, software development, payroll management) saw
higher job loss and a more volatile recovery.
Congressman John D. Dingell: “From the GAO report, we’ve
learned that more government work is going overseas and that
American companies are cutting their US based staff while
increasing the workforce in their offices overseas. What is
unacceptable is that our government is completely unprepared
in dealing with this issue. The Commerce and Labor
Departments can’t even track the trends because they are
using antiquated methods.”
Congressman Ike Skelton: “We owe it to the Americans who
have seen their jobs disappear because of offshoring to
develop better data on this phenomenon. The trend toward
offshoring in the private and public sectors has real life
implications that we cannot ignore. I worry not only about
the economic impact of outsourcing information technology
and technical jobs overseas, but also about the national
security implications of losing those technical skills and
specialized talents here at home.”
Congressman Jay Inslee: “The GAO study has placed the
impetus on the Bush Administration to provide us with more
information about their policy of outsourcing American jobs.
Outsourcing is a serious problem that has the potential to
be a great detriment to American entrepreneurship. This
report, while a welcome first step, is conspicuously
incomplete and shows a frustrating lack of data on the
government’s behalf to examine this issue. Now that we have
identified the problem, future reports must provide Congress
with information to help us develop a public policy that
ensures that American workers can remain competitive when
seeking well paying jobs.”
Congressman Adam Smith: “This study shows us that we have
the opportunity to address the growing trend of offshore
outsourcing with positive and aggressive solutions. We
should increase investment in research and development,
improve math and science education in K-12, enhance training
and professional development for workers, open markets for
American goods and renew the government’s focus on promoting
innovation. By doing so, we can make sure that our economy
remains the most vibrant and competitive one in the world.”
Congresswoman Tammy Baldwin: “The outsourcing of American
jobs to companies overseas is of grave concern to the
families I represent in South Central Wisconsin. It is
outrageous that this administration condones and even
welcomes such outsourcing of jobs when families here are
struggling to send their kids to college and pay for the
high cost of health care.”
Earlier this year, Congressman Dingell and Congresswoman
Rosa DeLauro (CT-03) introduced the United States Workers
Protection Act of 2004, a bill that would prevent US
taxpayer dollars from being used to outsource jobs to other
countries. The bill also prohibits federal agencies from
awarding procurement contracts to companies that would use
overseas workers either on their own payroll or through
foreign subcontractors for purposes of fulfilling such
contracts. In addition, the bill bars state governments from
receiving federal funds unless such states certify that none
of such funds will be expended for services performed
outside the United States under federally-funded contracts.
The reported has been posted on the GAO website. It can be
found at: http://www.gao.gov/new.items/d04932.pdf
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