GAO Says Offshoring Could Stymie Tech Job Growth

Computerworld - A new government report indicates that offshore outsourcing could hurt IT employment growth over the next decade. But the study, released last week by the U.S. Government Accountability Office, is sprinkled with caveats and qualifiers because of what the GAO said is a lack of sufficient data.
The GAO acknowledged in the report, which was requested by Democrats in the House of Representatives, that the government's existing data can't provide a complete picture of the impact of offshore labor on the U.S. economy. At best, the available data provides only "some clues" to the extent of offshoring activity, the GAO said. Further efforts will be needed to understand the "small but growing trend," it added.
Government projections indicate that IT-related occupations are expected to grow faster than most occupations through 2012, according to the GAO. Indeed, seven of the 30 fastest-growing occupations are related to IT. But the projected rate of growth for those occupations for the period from 2002 to 2012 is significantly lower than the rate projected for 2000 to 2010, the GAO reported.
The report doesn't say with certainty that offshoring is to blame for the projected change in IT labor growth. It cites the recession earlier in this decade, the bursting of the dot-com bubble of the late 1990s and increases in productivity as potential contributors to the revised job forecast.
In terms of offshoring's effect on U.S. workers, the GAO said the U.S. Department of Labor's survey on mass layoffs shows that layoffs attributable to the shift of jobs to other countries have increased since 1999 but still represent a small fraction of job cuts. Of the 1.5 million layoffs reported in 2003, just 0.9% were the result of overseas relocation -- and most of those layoffs were in the manufacturing sector. But the GAO said the survey has shortcomings because it covers only large companies and those that laid off at least 50 people in a five-week period.
In a statement, Rep. Jay Inslee (D-Wash.) called the report "a welcome first step" in understanding the offshoring trend. But, he said, "I remain concerned that this report is conspicuously incomplete." Inslee added that if needed data is indeed lacking, "then it is imperative that we push further studies that will fill the gap between raw numbers and public policy."
Marcus Courtney, president of the Seattle-based Washington Alliance of Technology Workers, said the GAO study clearly points to a need for better data. "For the GAO to give Congress policy recommendations, they need better information," saidCourtney, who called on Congress to compel companies to provide data so the government can "get a handle on the trend."

Read more about Outsourcing in Computerworld's Outsourcing Topic Center.