Offshoring in the service sector : economic impact and policy issues

The United States continues to run an international trade surplus in services, but business stories frequently appear about service-sector jobs moving offshore. Many Americans are particularly concerned about the loss of skilled, well-paid jobs in such fields as computer programming and accounting. These jobs seemed relatively secure at a time when many manufacturing jobs were being lost to import competition. Similarly, telephone call centers, once viewed as an economic development opportunity in some areas, increasingly are moving to low-wage countries, such as India and the Philippines. Reflecting this growing concern, some members of Congress and state legislators have focused attention on the offshoring of service jobs and production, even introducing legislation to limit the outsourcing of jobs to other countries. Offshoring raises many questions for policymakers and the general public. For example, which service jobs will be affected most by import competition? What are the most likely effects of service-sector offshoring on U.S. output, employment, and, most important, our standard of living? Is offshoring really a problem that requires restrictive government actions, or are other kinds of policies more appropriate to give Americans the highest possible living standard? ; Garner examines the economic effects of offshoring and possible policy responses. He finds that although the offshoring of service jobs hurts some workers, offshoring should not permanently lower U.S. employment or production. ; Moreover, the average living standard can benefit over the long run if the nation adopts policies to retrain displaced workers and move them into expanding industries.Service industries

Making Trade Work: Straight Talk on Jobs, Trade, and Adjustment

This report examines the benefits and challenges of developing an effective adjustment policy for workers who lose their jobs because of outsourcing or any other adverse effects of trade. The statement, approved by CED's Research and Policy Committee states, "The most important next step is to recognize that adjustment policy is vital to achieving free trade -- which, in turn, is vital to the nation's economic future." The statement concludes that America needs to develop the national will to devise and fund an adjustment policy that will get to "yes" on trade

The case of the reluctant recovery

Anecdotal evidence has it that the 1990-91 downturn was a predominantly white-collar, or middle management, recession. The data, however, show that the recession affected virtually all occupational groups. Moreover, by standards of past recessions, the 1990-91 downturn was relatively mild. It is the failure of employment to recover that is unusual. Evidence presented here indicates that the economy’s behavior results from a blend of cyclical and structural factors, with the structural factors delaying the recovery.Recessions

An evaluation of training in business

Includes bibliographical references

Linking Research and Policy: Assessing a Framework for Organic Agricultural Support in Ireland

This paper links social science research and agricultural policy through an analysis of support for organic agriculture and food. Globally, sales of organic food have experienced 20% annual increases for the past two decades, and represent the fastest growing segment of the grocery market. Although consumer interest has increased, farmers are not keeping up with demand. This is partly due to a lack of political support provided to farmers in their transition from conventional to organic production. Support policies vary by country and in some nations, such as the US, vary by state/province. There have been few attempts to document the types of support currently in place. This research draws on an existing Framework tool to investigate regionally specific and relevant policy support available to organic farmers in Ireland. This exploratory study develops a case study of Ireland within the framework of ten key categories of organic agricultural support: leadership, policy, research, technical support, financial support, marketing and promotion, education and information, consumer issues, inter-agency activities, and future developments. Data from the Irish Department of Agriculture, Fisheries and Food, the Irish Agriculture and Food Development Authority (Teagasc), and other governmental and semi-governmental agencies provide the basis for an assessment of support in each category. Assessments are based on the number of activities, availability of information to farmers, and attention from governmental personnel for each of the ten categories. This policy framework is a valuable tool for farmers, researchers, state agencies, and citizen groups seeking to document existing types of organic agricultural support and discover policy areas which deserve more attention

"Fear" and Offshoring: The Scope and Potential Impact of Imports and Exports of Services

Commentators, including Princeton University's Alan Blinder, estimate 40 million jobs could be at risk of being offshored over the next 20 years and suggest American workers should specialize in services that can be delivered face-to-face. In contrast, Jensen and Kletzer expect the process of globalization in services will proceed much as it has in manufacturing: They estimate only 15-20 million jobs are at risk of being offshored to low-wage, labor-abundant countries; approximately 40 percent of these jobs will be in the manufacturing sector, long considered "at risk." They expect these losses to be offset by job gains in high-wage activities from services exporting. The United States will retain its comparative advantage in high-skill, high-wage production and increase these activities in tradable service industries as trade barriers diminish. While the loss of low-wage activities that are offshored and the gain from high-wage service exports will cause dislocation, the globalization of services production is likely to have productivity-enhancing effects similar to the impact of globalization in the manufacturing sector, offering significant potential to improve living standards in the United States and around the world.

Technology and job retention among young adults, 1980-98

Although many studies have examined whether job stability and security have declined over time, the role of technology in job turnover has received little attention. This analysis examines the relationship between the likelihood that a worker remains at the same job for two years and various measures of technology usage across industries. Using data from the National Longitudinal Survey of Youth over 1980-98, the results indicate that the relationship between job retention and technology varies across measures of technology. Almost all of the relationship between job retention likelihoods and technology is due to quits, not to involuntary job loss. The results suggest that the relationship between technology, quits, and involuntary job loss differs between college graduates and less-educated workers.Labor turnover ; Technology ; Employment (Economic theory) ; Demography

This is Bangalore calling: hang up or speed dial? what technology-enabled international trade in services means for the U.S. economy and workforce

The U.S. service sector is in the midst of a transformation similar to the one undergone by the manufacturing sector. Some jobs are moving to other countries, some are disappearing, some are being born. But the service-sector transformation is likely to be different. Technological advances and globalization are making it possible, but these factors reinforce each other in such a way that the gains to the U.S. economy are likely to be greater than with manufacturing, and the transition costs more widespread. Thus, superior and better coordinated domestic and international policies are needed to address the challenges and opportunities.Service industries

Tradable Services: Understanding the Scope and Impact of Services Outsourcing

We develop a new empirical approach to identify tradable service activities. Contrary to conventional views of service activities as nontradable, we find a significant number of service industries and occupations that appear tradable and substantial employment in these tradable activities. Workers employed in tradable service activities differ from those employed in tradable manufacturing and nontradable services. Workers in tradable service activities have higher skill levels and are paid higher wages than manufacturing workers or workers in nontradable service activities. In general, we find little evidence that tradable service activities have lower employment growth than other service activities. However, evidence suggests lower employment growth at the lowest end of the skill distribution. There is also evidence of higher worker displacement rates in tradable services. Workers displaced from tradable service activities are different from displaced manufacturing workers: Displaced tradable service workers have higher skills and higher predisplacement earnings than displaced manufacturing workers.services, offshoring, trade, labor, information technology, jobs

HRM in Service: The Contingencies Abound

[Excerpt] Despite the rapid growth in the diversity of service consumers—both abroad and domestically—theoretical developments regarding this diversity in the service world have lagged far behind those that have characterized the world of manufacturing. With regard to international services, Knight (1999) conducted a review of the literature and concluded that there is an alarming paucity of research on international services management despite the importance of services in the global economy. A large proportion of the research that has been conducted on international services has focused on marketing issues rather than human resource management (HRM) issues. This means that little is known about the cross-cultural applicability of service HRM theories, which have hitherto been developed and tested almost exclusively within the West (mostly within the U.S. context). Similarly, there has been little research on the HRM implications of the growing diversity of service consumers within the U.S. domestic market. Again, much of the research focuses on the challenges associated with simultaneously marketing services to a multicultural customer base, with little or no work focusing on the implications of these challenges for HRM in service firms. Thus, the purpose of our chapter is to introduce a preliminary discussion of the HRM implications of both increased internationalization and domestic diversity for service firms. We begin by presenting a brief synthesis of the services management literature that has been established to date. Readers will note in the synthesis that a number of contingencies with regard to HRM practices have already been introduced especially via definitions of what constitutes service and the role of customers in service production and delivery. We then discuss the potential cross-cultural applicability of these services management principles abroad, and when doing so, we focus primarily on the aspects of services management theories that are laden with Western cultural principles. Next, we discuss parallel challenges faced by service firms as a result of increased diversity within the domestic marketplace and we conclude with some thoughts about the necessity to more explicitly explore the contingent nature of HRM practices