TRENTON-One of every eight jobs in New Jersey is potentially vulnerable to being lost in the current wave of employers sending service jobs overseas-with office, computer and math jobs most at risk.

That is a key finding of Perspective on Offshoring and New Jersey, a new report by New Jersey Policy Perspective, written by NJPP Policy Analyst Susan J. Bottino. NJPP is a nonpartisan, nonprofit organization that conducts research on state issues.

The report calls for a much higher level of government involvement to ease the impact of offshoring on working people and their families.

"A nation accustomed to the disappearance of manufacturing jobs is now confronting the reality of highly skilled and educated workers potentially being as vulnerable as their blue collar brethren to their jobs going overseas," the report says. "People who thought their training and career choice would keep them safe are finding out otherwise."

The new trend in offshoring affects such areas as software programming, data entry, call centers and other service-oriented work. This is happening because technology has evolved to where many jobs can be done anyplace, opening up labor markets in countries where workers are paid far less than in the U.S.

"Jobs have always been created and destroyed-nothing new about that," said NJPP President Jon Shure. "But in the past, the new was at least as good as the old. Too often today, people who lose jobs are getting new ones with lower pay and fewer benefits. People who were told they'd be okay if they got the right skills and training are finding it's not so. In the end this is about whether we're going to have an economy where everyone has a chance-and how to achieve it."

In New Jersey, 492,000 jobs have the potential to be outsourced overseas. The information comes from an analysis conducted for NJPP by University of California-Berkeley Prof. Cynthia A. Kroll, who has done work on the issue on the national level. Using the most recent comprehensive federal Bureau of Labor Statistics data, from 2002, Dr. Kroll found that New Jersey workers are slightly more vulnerable than in the nation as a whole to losing jobs to offshoring. This reflects that New Jersey is home to a higher concentration of service and information-oriented jobs.

Indeed, New Jersey's successful transition away from a manufacturing economy now has the downside of putting a new group of workers in the sights of offshoring. Having a good job with good pay is no guarantee of protection. In fact, on average, the wages of workers whose jobs are vulnerable to offshoring are higher than for other jobs in the state.

While it is unlikely that all potentially offshored jobs will actually be lost, the trend carries other negative impacts. "Even just the threat of jobs being offshored can have a chilling effect on workers," the report says. "When jobs are seen to be at risk, workplace progress and morale suffer as workers are reluctant to push for time off, flexible hours, better pay, health benefits and other aspects critical to their rights and dignity."

"Over the years, the U.S. has responded to the need for government to set rules for the market place to foster competition among businesses along with a rising standard of living," the report says. "Similarly, government has a role to play in offshoring. There must be a substantive public policy role to deal with the problems caused by offshoring. The worker-employer playing field is not level enough to provide solutions without an active role by both state and federal governments." The report calls for several courses of action:

• Promote better paying jobs to replace those lost, through enforcing the right to unionize, increasing the minimum wage and other policies.
• Give consumers a choice of whether to patronize companies engaged in offshoring, by such measures as requiring firms to publicly disclose their practices.
• Require more reporting about offshoring; indeed the requirements today are so weak that it is impossible to tell how many New Jersey jobs have actually been offshored to date-though anecdotal evidence mounts.
• Control the extent to which state governments and the federal government spend tax dollars on companies that hire offshore help.
• Minimize effects of job loss through such steps as reinstating temporary extended unemployment compensation, expanding trade adjustment assistance programs to include service sector workers, establishing supplemental health insurance and wage subsidy programs and both expanding and increasing funding for dislocated worker assistance.
• Increase the focus on training programs and other educational opportunities.

Defenders of offshoring often characterize the practice in terms of what they see as benefits to the U.S. economy in the form of lower prices and higher global competitiveness. But, even if true, that is little consolation to workers unable to support their family. Nor is the economic impact confined to workers directly affected. As much of the research on de-industrialization showed in previous decades, the ripple effect from lost jobs travels widely.

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© 2008 New Jersey Policy Perspective