Jay Inslee: Washington's 1st Congressional District
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GAO Report on Outsourcing Provides Incomplete Picture of Disturbing Trend
22 September 2004
U.S Rep. Jay Inslee (WA-01) and colleagues today released a report by the General Accounting Office (GAO) on the trend of private and public sector outsourcing of American jobs to other countries. The GAO report represents the first comprehensive study to date and contains some information that causes concern about the outsourcing of American jobs. At the same time, the study is admittedly incomplete due to the government’s lack of data on the subject and does not analyze many elements of the problem. The GAO has planned four subsequent reports on outsourcing, which indicates the severity of the problem and will help shape public policy on the outsourcing debate. In requesting the study, Inslee was joined by U.S. Reps. Adam Smith (D-WA), Ike Skelton (D-Missouri), John Dingell (D-Michigan) and Tammy Baldwin (D-Wisconsin).
"The GAO study is a welcome first step in understanding the disturbing trend of sending our high paying jobs overseas," said Inslee. "I remain concerned that this report is conspicuously incomplete and does not adequately explore some important outsourcing issues, such as the domestic consequences of sending our jobs abroad. If we lack data, as GAO suggests, then it is imperative that we push further studies that will fill the gap between raw numbers and public policy. The fact that GAO will be conducting four further studies on outsourcing confirms the significance of the problem and the need to address these crises."
"Ultimately, we must develop a public policy that ensures that American workers can remain competitive when seeking well paying jobs. American ingenuity and hard work continue to develop ideas, products and services that raise the standard of living for people all over the world. Outsourcing is a serious problem that has the potential to be a great detriment to American entrepreneurship. I will closely follow the future GAO studies so that we develop a public policy on outsourcing that best preserves the American dream for working Americans."
Some highlights of the GAO Study:
- Current U.S. government data does not provide a complete picture about the business transactions encompassed by outsourcings. Government data also provides limited information about the effects of service sector outsourcing on U.S. employment levels and the U.S. economy.
- Private researchers predict that offshoring may eliminate 100,000 to 500,000 IT jobs within next few years.
- Imports of business, professional and technical services increased by about 62 percent, from $23.1 billion in 1997 to $37.5 billion to 2002.
- No comprehensive data exists to show the extent of services outsourced by state governments.
The GAO intends to conduct four further studies to further analyze the trend of outsourcing jobs to foreign countries. The first study, to be released by the end of this year, will deal with federal procurement and the practice of government entities outsourcing work. The second study will focus on the effects of outsourcing on critical infrastructure and security, particularly the loss of human capital abroad. A third study will look at the broader economic implications of offshoring, within the broader economic picture, including the effect on trade policy and the current recession. The fourth study will focus on outsourcing and the income security of American employees.
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