The increased transfer of U.S. service sector jobs to overseas workers has raised concerns that “offshoring” has caused a surge in the displacement of U.S. workers and was largely to blame for the sluggish recovery of the labor market following the 2001 recession.
But Federal Reserve Bank of New York economists who have studied the matter found no evidence to support these claims.
In U.S. Jobs Gained and Lost through Trade: A Net Measure, authors Erica Groshen, Bart Hobijn and Margaret McConnell measure not only the jobs lost to imports but also the jobs created through the production of U.S. exports.
They found a net loss to imports of 2.6 million private-sector jobs in 2003. As a percentage of overall U.S. payrolls — 2.4% — this number is small. More, the study reveals that the growth of jobs lost to net trade flows actually slowed during the post-recession period of weak job gains — and that a pickup in jobs lost to trade can coincide with a strong labor market.
The economists caution that their study is limited in scope: while it recognizes that jobs are created through the production of U.S. exports, it does not address trade's broader benefits in raising wealth.
They point out that trade allows countries to specialize in the production of particular goods or services. Specialization makes trading partners richer because each exchanges goods it produces efficiently for goods that its partners can produce at lower cost.
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