Beginning in 1999, significant offshoring of manufacturing jobs marked the U.S. economy. In an effort to achieve lower production costs, U.S. manufacturers moved jobs and capital to low labor costs environments such as Mexico and countries in Central America. Most jobs that were threatened can be characterized as blue-collar requiring little formal education and training. As a result, the most vocal resistance to the offshoring trend came from U.S. unions representing manufacturing workers occupying jobs requiring few skills. Until recently, highly educated service workers felt safe from the loss of their jobs due to offshoring.
All of us in services, including university education, continued to advocate expanded trade assuming that this would provide lower cost imported goods, but with little threat to our jobs. However after the recession of 2001, companies began to offshore service jobs to English speaking countries such as India and the Philippines. Suddenly, we feel our blue-collar brethren’s job apprehension. The question becomes: Is your job apt to be offshored? What jobs are more likely to be offshored?
The factors that characterize a job that is at risk to be offshored include: (a) little social interaction on the job. (b) tasks reducible to set of instructions. (c) information as the major component of the product or output. (d) job is easily performed from home. According to Professor Kroll of the University of California-Berkeley, the following jobs are more likely to be offshored along with the share of jobs at risk to be offshored:
Computer Systems Design –66.4%
Accounting, Tax Preparation, Bookkeeping—63.5%
Data Processing & Hosting—57.6%
Internet Service Providers—55.7%
Agencies, Brokerages, & Other Insurance Related---45.0%
Unfortunately for many of us, the current wave of offshoring will not abate but will only escalate in the years ahead as firms and organizations (yes even education and government) seek lower costs.