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Only 1.6 pc US jobs outsourced to India, China

India and China account for only 1.6 per cent of the total employment of US multinationals by way of outsourcing, government figures have revealed, dispelling notions spread by critics of offshoring that the two countries are swallowing American jobs.

Latest figures released by the US Commerce Department show that by contrast, Canada was home to more than three times as many workers for US multinationals as China.

The UK was home to about nine times as many workers as India.

Also, for each job in low or mid-wage countries in 2003, US companies employed more than 10 workers at home.

The author of the report, Raymond Mataloni, said the numbers "don’t provide a lot of support for the notion that massive offshoring is going on." He noted that 74 per cent of all output by multinationals was produced in the US in 2003.

That was down from 78 per cent in 2000 but, viewed over a longer period, it has not changed much. In 1977, multinationals produced 75 per cent of their total output at home.

Joseph Carson, an economist at Alliance Capital Management LP, said that manufacturing employment fell at US plants and their foreign affiliates in 2003.

This suggests that outsourcing is not the only trend at play in multinational behaviour.

The increased use of technology and improved productivity is also damping employment, he said.

From 2000 to 2003, employment by US multinationals rose 1,93,000 or 2.4 per cent, to 8.4 million at affiliates abroad. During that period, US employment by American multinationals declined 2.2 million, or 9.1 per cent, to 21.7 million.

Low and mid-wage nations amounted to a relatively small outpost for US multinationals.
For example, in 2003, they employed 3,44,000 workers in China, up from 2,52,000 in 2000.

They employed 1,31,000 in India, up from 71,000 in 2000. However, combined, India and China amounted to just 1.6 per cent of the total employment of US multinationals. — PTI