Disappearing jobs: economist predict that up to 6 million U.S. jobs will be lost to workers overseas in the next decade.

Last year, 140,000 U.S. jobs were lost to workers in India. It's easy to see why. While the average software programmer in the United States earns $66,100 a year, an individual doing the same work in India makes only $10,000 (see table below).

The loss of jobs is nothing new to U.S. manufacturing workers. For decades they have watched as their jobs were outsourced to low-wage workers in China, Mexico, Brazil, and other countries.

Now, with the revolution in computer technology and telecommunications, skilled workers in the United States find that their jobs are at risk. In recent years, software programmers, mechanical engineers, and accountants have lost their jobs to foreign workers. Even radiologists in India are reading the X-rays of American patients. With such developments, many people wonder whose job is safe?

"I'm not a statistic"

Vince Kosmac, of Orlando, Florida, knows the problem only too well. After several U.S. steel plants outsourced jobs to Brazil and other countries in the 1980s, Kosmac lost his trucking job. He then earned a degree in computer science. "The conventional wisdom was, 'Nobody can take your education away from you,'" he told Time magazine. "Guess what? They took my education away." After working for nearly 20 years as a programmer, Kosmac lost his job to an overseas worker.

"Here I am, 47 years old," he says. "I've got a house. I've got a child with cerebral palsy. I've got two cars. What do I do--push the pause button on my life? I'm not a statistic."

Stories like Kosmac's have made outsourcing one of the hottest topics in this year's presidential campaign. Democratic candidates John Kerry and John Edwards have repeatedly talked about Americans' job anxieties.

"We will repeal the tax loopholes and benefits that reward Benedict Arnold CEOs and companies for shipping American jobs overseas," Senator Kerry said after winning the Wisconsin primary. "Instead, we will provide new incentives [motives] for good companies that create and keep good jobs here in America."

In response to outsourcing, congressional Democrats introduced the USA Jobs Protection Act. The legislation would prevent companies from hiring foreign workers when American workers are available for the same job. And President George W. Bush, who has been criticized for not creating more jobs, recently signed a bill into law that prevents certain federal contracts from being outsourced overseas.

But many economists say that outsourcing may not be such a bad thing. A recent study by the McKinsey Global Institute, an economics think tank, found that for evely dollar spent on a business process outsourced to India, the United States gains at least $1.12. Diana Farrell, the institute's director, says that sending X-rays to India, for example, reduces the cost of health care here and frees up money for medical research.

It is important, Farrell adds, to put the job loss in perspective. While the U.S. has lost 2 million jobs to global trade over the past two decades, it has added 35 million new jobs in just 10 years.

Nonetheless, the process can be painful, as unemployed workers struggle to put food on their families' tables. What do you think? Is outsourcing good--or bad--for the U.S.?

Your Turn

Think About It

1. Should the U.S. government help workers who lose their jobs overseas? How?

2. How have people in your area been affected by outsourcing?

Words to Know

* Outsourcing: the practice of hiring an outside company, often overseas, to do work that might otherwise have been performed by one's own staff.

* Telecommunications: systems used in transmitting messages electronically.

The Wage Gap

The average salaries U.S. companies
pay to workers in the U.S. and India.

SOFTWARE PROGRAMMER
U.S. $66,100   India $10,000

MECHANICAL ENGINEER
U.S. $55,600   India $5,900

INFO. TECH. MANAGER
U.S. $55,000   India $8,500

ACCOUNTANT
U.S. $41,000   India $5,000

FINANCIAL OPERATIONS
U.S. $37,625   India $5,500

OBJECTIVES

Students should understand

* Many Americans have lost their jobs because of offshore "outsourcing," a practice of shipping work overseas where labor and resources are cheaper;

* U.S. job growth and outsourcing have become volatile political issues in this year's presidential campaign.

TEACHING STRATEGY

Ask students: "What effects do imported goods have on jobs and job creation in your community?"

BACKGROUND

Offshore outsourcing transformed U.S. manufacturing in the 1970s and 1980s. Now, with advances in Internet technology and telecommunications, many highly skilled workers in the U.S. are losing their jobs to lower-paid workers in India, China, Malaysia, and Russia.

THINKING SKILLS

MAKING INFERENCES: What was the meaning of Senator Kerry's comment about "Benedict Arnold CEOs"? (Kerry compared CEOs whose companies outsource to Benedict Arnold, one of the most famous traitors in U.S. history. The Senator believes that those CEOs and companies are betraying the interests of U.S. workers.)

CAUSE AND EFFECT: According to one study, how does outsourcing to India benefit the U.S.? (The U.S. economy gains at least $1.12 for every dollar spent on work outsourced to India. Those earnings can strengthen the finances of a U.S. company, lead to greater investment at home, and stimulate U.S. job growth.)

ACTIVITY

HOME PRODUCT INVENTORY: Instruct students to conduct an inventory of a room in their home. Where were the items manufactured? How are they used? How valuable are they to family members? Students should note on a world map where the items were produced.

STANDARDS

SOCIAL STUDIES, GRADES 5-8

* Production, distribution, and consumption: How millions of U.S. jobs are being shipped overseas to countries that have cheaper labor costs and resources, resulting in both unemployment for some Americans and U.S. economic gains.

* Science, technology, and society: How a revolution in computer technology and telecommunications has enabled many jobs to be exported overseas.

RESOURCES

PRINT

* Burgess, John, World Trade (Chelsea House, 2001). Grades 6-8.

WEB SITES

* Junior Achievement www.ja.org/

* Global Economy www.pbs.org/wgbh/ commandingheights/lo/index.htm

Write the letter of the correct answer on the line provided.

-- 1. Why do some U.S. companies outsource jobs?

A. Companies outsource jobs overseas to benefit from cheaper labor and resources.

B. The U.S. government provides low-interest loans to any business that hires foreign laborers.

C. Both A and B are correct.

-- 2. Many U.S. jobs have been outsourced to countries on which continents?

A. Europe and South America

B. Africa and Asia

C. Asia and South America

-- 3. What does Vince Kosmac mean when he claims that outsourcing "took my education away"?

A. His job loss prevented him from paying his college tuition.

B. He had earned a college degree in computer science, an area in which many jobs are now being outsourced.

C. He cannot afford to go back to school.

-- 4. According to some economists, how does outsourcing benefit the U.S.?

A. It frees up funding for other areas, such as medical research.

B. Outsourcing helps foster U.S. economic growth.

C. Both A and B are correct.

-- 5. How will the Democrats' Jobs Protection Act help stop outsourcing?

A. The legislation prevents companies from hiring foreign workers when workers in the U.S. are available for the same jobs.

B. The act calls for heavy fines against companies that outsource.

C. Companies that outsource will have to provide health benefits for foreign workers.