Labor Dept.: Outsourcing Causes 9 Percent of U.S. Layoffs

The bulk of outsourced jobs never leave U.S. shores, the government said on Thursday in a new report suggesting concerns over American workers losing jobs to cheaper foreign labor may be exaggerated.

Nine percent of non-seasonal U.S. layoffs in the first quarter were due to outsourcing, but less than a third of the work was sent overseas, the Labor Department (search) said in releasing new figures on mass layoffs and outsourcing.

"In more than seven out of 10 cases, the work activities were reassigned to places elsewhere in the U.S.," the Bureau of Labor Statistics (search) said in its report on mass layoffs for the January-to-March period.

Organized labor, critical of the administration's record on jobs, has promised to make outsourcing an issue in this year's presidential election.

While the figures offer the first official measure of the impact of outsourcing on U.S. employment, they count only layoffs at companies where at least 50 people filed for unemployment insurance during a five-week period and the layoff lasted more than 30 days.

That restriction means the figures do not capture the impact outsourcing has had on small businesses.

In the first three months of the year, 4,633 U.S. workers were laid off because their jobs were moved to a foreign country, the BLS said. That represents less than 2 percent of the mass layoffs that totaled 239,361 during that period.

When seasonal and vacation-related mass layoffs are excluded, the proportion of workers who lost their jobs due to overseas outsourcing rises to about 2.5 out of 100.

Another 9,985 workers lost their jobs because the work moved to a different location within America, BLS said.

However, the report showed outsourcing had a huge impact on whether work sites were permanently shut-down or just temporarily closed. Fifty-one percent of mass layoffs caused by outsourcing were permanent closures of the work site, compared to just 17 percent of total layoffs.

A large proportion of mass layoffs in America are due to seasonal factors -- such as winter layoffs in agriculture or summer shut-downs at manufacturing plants -- and about two-thirds last less than a month