Aired June 10, 2004
Homeland Security Contract Awarded to Foreign Company; New Iraq Government Not Enough to Establish Security
DOBBS: The government for the first time is beginning to track the number of American jobs lost to cheap foreign labor markets. A Department of Labor report released today finding that more than 4,600 American jobs were exported to those cheap foreign labor markets in the first three months of the year.
That report, however, is certainly incomplete. It does not, for example, count every job lost to a foreign worker. Companies that laid off fewer than 50 employees are not even included, and companies that employ fewer than 50 people in total are not included as well in this first government effort.
But it is certainly at least a long-awaited, much-needed beginning.
The government study also confirmed what we've been reporting here for more than a year, that the manufacturing sector has been devastated by the export of American jobs to cheap overseas labor markets. While corporate America increases its reliance on cheap foreign labor, a new report finds that outsourcing simply doesn't pay.
Lisa Sylvester reports from Washington.
LISA SYLVESTER, CNN CORRESPONDENT (voice-over): The survey by the Bureau of Labor Statistics found off-shoring is still in its early stages with less than 3 percent of all job loss due to overseas outsourcing. But the trend is expected to grow.
A survey by "CFO" magazine asked corporate managers who have already sent work overseas whether they will increase off-shoring in the next two years. Sixty-four percent said yes. And white-collar jobs are increasingly in jeopardy.
TIM REASON, "CFO" MAGAZINE: One reason the backlash is getting so loud in corporate America is that the jobs that are being moved overseas are coming from the cubicle down the hall instead of the factory floor.
SYLVESTER: Despite the hype over off-shoring, it does not always result in big savings. While 44 percent of "CFO" magazine's respondents said they saved more than 20 percent, more corporate managers, 46%, saw savings of less than 20 percent. And one in 10 managers said they saw no savings at all. But the drive for efficiency will still send some jobs overseas.
STUART ANDERSON, NATIONAL FOUNDATION FOR AMERICAN POLICY: American businesses are faced with enormous competitive pressure, not only domestically, but internationally, and they're going to continue to try to find the best way to organize their company.
SYLVESTER: Off-shoring critics argue sending work overseas may save money, but it comes at a loss of quality and control over the final product.
GREGORY JUNEMANN, INTERNATIONAL FEDERATION OF PROFESSIONAL AND TECHNICAL ENGINEERS: What happens is employers send work offshore and then buy the mistakes.
SYLVESTER: So companies looking for savings often pay a bigger price in the long run by moving overseas.
SYLVESTER: "CFO" magazine found one of the fastest-growing areas for off-shoring is accounting and finance. Twenty-one percent of the 275 corporate managers surveyed reported sending some type of finance work overseas. And, Lou, that's right behind call-center jobs -- Lou.
DOBBS: Lisa, thank you very much.
Lisa Sylvester reporting from Washington.