Only 1% of Outsourced Jobs Goes Offshore?

[ShibbOleth]

In the March 15 issue of InformationWeek (I’m behind on my reading), Bob Evans quotes Sunil Wadhwani:

Of all the outsourcing that goes on in the United States, only 1% goes offshore – the other 99% goes to other workers right here in the Unisted States.
And meanwhile, which country in the world is the largest exporter of goods and services? It’s the United States – we export far more than any other country in the world.

Sunil Wadhwani is the co-founder and CEO of iGate*, a multi-million dollar offshoring company so he certainly has a dog in the fight. My questions:

1. Is the first part of Mr. Wadhwani’s statement technically correct, i.e., do only 1% of all outsourced jobs leave the country? Is this is true, does it hold for the long-term? For example, the large multinational I worked for previously outsourced many IT jobs, which initially (for 2 years) will be kept mostly in the USA, but will eventually be offshored as the initial contract term expires.

2. Still pertaining to part one, does the statement hold when looking at dollar value of jobs outsourced. For instance, I expect that many call center jobs are outsourced but kept in country for reasons of time zone and English proficiency. Software development and support jobs, which tend to be higher paying, can be more profitably “offshored”. What is the percent in dollar value of jobs sent overseas versus internally (to the USA) outsourced?

3. In the final part of the above quote, is it true that the United States is by far the world’s largest exporter? What is the comparison to China or other large exporters? How about versus the EU?
   *iGate seems to go out of their way to downplay that they are, essentially, an Indian company.

[clairobscur]

The only thing I can tell is that the USA importations and exportations are low when compared with other developped countries relatively to its GDP (you could express it by saying that the USA is more auto-sufficient than other develloped countries).

Given that the GDP of the EU as a whole is higher than the GDP of the USA, one can logically deduce that the EU as a whole exports (and imports) more than the USA.

[clairobscur]

I checked for the 6 main western countries :

USA Imports : $1165 billions Exports :$687 billions

Japan Imports : $292 billions Exports :$383 billions

Germany Imports :$487 billions Exports:$608 billions
France Imports :$304 billions Exports:$308 billions
Italy Imports :$238 billions Exports:$259 billions
UK Imports :$330 billions Exports :$286 billions

So, the USA exports a little more in value than Germany alone. But imports 4 times more. When compared with the 4 main EU countries, it imports 15% less, but exports only half as much. (These four countries population is roughly 70% of the US population, their total GDP is less than that, but I don’t know exactly how much)
So the statement is a OP is technically true, but very disingeneous, since :

1. The USA is the main exporter only due to its size, and barely so
2. It mentions exportations but ignores importations which, at the contrary, are overwhelmingly higher than in any other western country.

[clairobscur]

@clairobscur

(you could express it by saying that the USA is more auto-sufficient than other develloped countries).
.

I should have rather written : the US is less dependant on foreign trade than other developped countries. A larger part of what is produced in the US is sold in the domestic market, and a larger part of what is consummed in the US is bought in the domestic market.

[samclem]

The respected economist, Robert Samuelson, has written some articles lately about the low percentage of jobs that have been sent overseas. Try searching for some things he’s written in the last month or two. He might have used percentages, but I’m not sure.

He writes for Newsweek and The Washington Post.

Here’s one of the columns I remember. You read it and do the math. I’m busy fixing dinner.

[RickJay]

@ShibbOleth

In1) Is the first part of Mr. Wadhwani’s statement technically correct, i.e., do only 1% of all outsourced jobs leave the country? Is this is true, does it hold for the long-term? For example, the large multinational I worked for previously outsourced many IT jobs, which initially (for 2 years) will be kept mostly in the USA, but will eventually be offshored as the initial contract term expires.

Bear in mind that ANY internal function performed by the employees of another company is “outsourcing.” If your company employs a custodial service to keep things clean, that’s outsourcing. If they use a contracted purchasing department, that’s outsourcing. You use a landscaping company to maintain the grounds? Outsourcing. It would be quite amazing if 99% of all outsourced jobs WEREN’T domestically sourced. Most jobs just cannot be done from another country.

[clairobscur]

@clairobscur

So, the USA exports a little more in value than Germany alone. But imports 4 times more. When compared with the 4 main EU countries, it imports 15% less, but exports only half as much. (These four countries population is roughly ** 70% ** of the US population, their total GDP is less than that, but I don’t know exactly how much)
.

Nope, sorry. These four countries population is roughly ** 90% ** of the US population, not 70% (I had generously added 100 milions people to the US population).

And by the way, their combined GDP is roughly 65% of the US GDP.

[ShibbOleth]

@RickJay

Bear in mind that ANY internal function performed by the employees of another company is “outsourcing.” If your company employs a custodial service to keep things clean, that’s outsourcing. If they use a contracted purchasing department, that’s outsourcing. You use a landscaping company to maintain the grounds? Outsourcing. It would be quite amazing if 99% of all outsourced jobs WEREN’T domestically sourced. Most jobs just cannot be done from another country.

Thanks, I hadn’t really thought about all of the custodial/maintenance/dining service type jobs that have been outsourced over the years. We went through a lot of that, too, including Security, Dining, Grounds Maintenance, etc. All of those folks used to get benefits and profit sharing, then they got outsourced. Also site pc and network maintenance was outsourced fairly early but couldn’t really be offshored.