Order Code RL32292
CRS Report for Congress
Received through the CRS Web
Offshoring (a.k.a. Offshore Outsourcing)
and Job Insecurity Among U.S. Workers
Updated January 27, 2006
Linda Levine
Specialist in Labor Economics
Domestic Social Policy Division
Congressional Research Service ˜ The Library of Congress

Offshoring (a.k.a. Offshore Outsourcing) and
Job Insecurity Among U.S. Workers
Summary
Offshoring or offshore outsourcing is the term now being applied to describe the
nascent practice among U.S. companies of contracting out the jobs of white-collar
workers in service sector industries to firms located beyond our borders. The term
is equally applicable to U.S. employers’ long-standing practice of outsourcing blue-
collar workers’ manufacturing jobs to other nations. As often is the case with a
potential trend, however, few facts are available. No regularly collected series
currently provides data on the number of workers who have lost jobs to offshoring.
The outsourcing of service sector jobs to specialized U.S. firms began in
response to the early 1980s recessions. Employers increased their focus on the
company’s core mission and contracted out peripheral activities to other U.S.
businesses. The 2001 recession prompted employers to achieve further efficiencies
by utilizing now widely disseminated technologies that permit low cost, good quality,
and high speed transmission of voice and data communications to extend offshore
outsourcing to white-collar service sector jobs. Events also transpired during the
intervening decade that enhanced other countries’ ability to export services.
Despite the labor market’s turnaround, the state of mind that continues to prevail
in the U.S. workforce is one that characterized an earlier “jobless recovery” when
white-collar workers first became aware that their jobs had become more insecure.
White-collar workers, who are the majority of all U.S. workers and of service sector
employment, again are anxious about the permanency of their jobs. Although
offshore outsourcing likely accounted for a very small share of the cutback in overall
employment that continued after the November 2001 end of the latest recession, it
appears to have had a greater adverse impact on certain areas (e.g., professional-
technical employees in communications and in business services industries).
Some believe we have seen just the tip of the offshoring iceberg, with perhaps14
million jobs having characteristics that make them susceptible to overseas relocation.
Perhaps the most often cited projection of job loss due to offshore outsourcing is 3.4
million service sector positions by 2015. If true, the cumulative figure might equal
just 2% of U.S. employment in a single year (2015). Other observers expect that
various reasons will lead companies to lose enthusiasm for the business practice (e.g.,
poor quality of work, less than anticipated cost savings, and customer dissatisfaction)
and consequently, use it more strategically.
Congress has a longstanding interest in assisting workers who lose jobs through
no fault of their own. In addition to unemployment benefits, policymakers
traditionally have provided extra help through the Trade Adjustment Assistance
(TAA) program to workers who lose jobs due to international trade. TAA generally
does not apply to trade-induced layoffs in the service sector, however. Laws already
exist to help workers undertake additional education and training (e.g., the
Workforce Investment Act) should that be necessary for their reemployment. The
most commonly suggested new proposal involves provision of wage insurance to
displaced workers. This report will be updated as warranted.

Contents
The Development of Offshore and Domestic Outsourcing . . . . . . . . . . . . . . . . . . 3
Current and Future Prospects for Offshoring Jobs . . . . . . . . . . . . . . . . . . . . . . . . . 5
Reasons for Worker Anxiety . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
How Many Jobs Are We Talking About? . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
The tip of the iceberg . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Overblown fears . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Job Insecurity Since the 1980s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Increased Displacement of White-Collar Workers
Precedes Offshoring of Service Sector Jobs . . . . . . . . . . . . . . . . . . . . 11
1980s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1990s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2001 recession and “jobless recovery” . . . . . . . . . . . . . . . . . . . . . . . . 14
Reemployment Prospects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Wage Prospects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Federal Assistance for Workers Displaced by Offshoring . . . . . . . . . . . . . . . . . . 18
Current Federal Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
The Most Often Mentioned New Proposal . . . . . . . . . . . . . . . . . . . . . . . . . 19
List of Tables
Table 1. Cumulative Number of U.S. Service Sector Jobs
Projected to Shift Offshore by Occupational Group . . . . . . . . . . . . . . . . . . . 8
Table 2. Displacement Rates by Industry and Occupation of Lost Job,
1981-1982 and 1991-1992 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Table 3. Displacement Rates by Industry and Occupation of Lost Job,
1989-1990 and 1999-2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Table 4. Displaced Workers by Occupation of Job Lost in
the 2001-2002 Period and Employment Status in January 2004 . . . . . . . . . 15
Table 5. Workers Displaced From and Reemployed in Full-Time Wage
and Salary Jobs, by Earnings on Pre- and Post-Displacement Jobs . . . . . . . 17

Offshoring (a.k.a. Offshore Outsourcing) and
Job Insecurity Among U.S. Workers
Offshoring, also known as offshore outsourcing, is the term now being used to
describe the nascent practice among companies located in the United States of
contracting out the performance of service sector activities (e.g., call center
operations) to businesses located beyond U.S. borders. The term is equally
applicable to U.S. firms’ outsourcing goods production (e.g., textiles) to other
countries, which has been occurring for decades. It commonly is assumed that the
work sent overseas was being or could have been performed by U.S. workers.
As is often the case with an emerging trend, little concrete information is
available about the offshoring of U.S. jobs. Instead, we have anecdotal accounts
conveyed by the media and estimates of presumably knowledgeable persons that are
similarly reported. No regularly collected series currently provides data on the
number of U.S. workers who have lost their jobs due to overseas outsourcing
.1
We are not even certain about what constitutes offshoring. Is it only contracting
out work to non-U.S. companies located abroad? What about U.S. corporations
moving jobs to their own subsidiaries in foreign countries? Is offshoring the
purchase of services from U.S.-based outsourcing firms that, in turn, have access to
labor overseas through partnerships with foreign companies or through their own
facilities located abroad? Does it include foreign-owned businesses with U.S. offices
from which services are provided to U.S. companies through a combination of
employees living in the United States (e.g., U.S. citizens and legal permanent
residents as well as persons with H-1B, professional specialty, visas) and workers
living in the foreign firm’s home country?
In addition to uncertainty about the size and definition of offshore outsourcing,
uncertainty surrounds its short- and long-run labor market implications. For
example:
! Some observers blame offshoring for the recent “jobless recovery,”
while others counter that the historical link between economic
growth and job creation remains intact.2 Unlike many earlier cycles,
permanent rather than temporary layoffs dominated the 2001
1 For more information see CRS Report RL30799, Unemployment Through Layoffs: What
Are the Reasons?
, by Linda Levine; and U.S. Government Accountability Office,
International Trade: Current Government Data Provide Limited Insight into Offshoring of
Services
, GAO-04-932, Sept. 2004.
2 See for example Erika Kinetz, “Who Wins and Who Loses as Jobs Move Overseas?,” New
York Times
, Dec. 7, 2003.

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recession and initial recovery. This might be related to firms seeing
the recession as an opportunity to cut payroll costs and improve
efficiency through operational changes that include outsourcing jobs
to other U.S. industries and to other countries. Some economists
found that a larger than usual share of laidoff workers were not
rehired by their former employers as a result of this perceived
structural change. Many of these displaced workers thus had to
undertake the time-consuming task of finding new jobs at other
companies or in other industries.3 Other economists estimated that
the 2001 recession had about the same effect on all major industry
groups, and therefore an unusually large number of workers should
not have had to search for jobs in other industries.4 Their contention
that the pace of job growth would accelerate as it eventually had
following all past recessions has proved true. Estimates of the net
job loss (gross job gains minus gross job losses) in the past few years
that might have been due to offshoring range from 3% to 10%.5
! Further, while acknowledging that offshoring and other forms of
globalization (e.g., direct investment and other capital flows) can
cause painful dislocations for workers, most economists agree that
it benefits the nation as a whole by enabling U.S. companies that
import goods and services to sell their products to consumers at
lower prices, providing consumers with more choices, and by
expanding markets for U.S. firms.6 Others dispute the degree to
which U.S. consumers actually benefit, suggesting that the
shareholders of companies engaged in offshoring might instead gain
through increased dividends. These individuals also believe that
outsourcing jobs overseas has different implications for the United
States than outsourcing to other industries within our borders that
are regulated by U.S. laws.7
! Still others wonder whether offshoring will result in college
graduates facing a dwindling supply of entry-level jobs that
traditionally have served as stepping stones to secure, high-skilled
positions. As to the overseas movement of more skilled jobs, they
3 Erica L. Groshen and Simon Potter, “Has Structural Change Contributed to a Jobless
Recovery,” Current Issues in Economics and Finance, Federal Reserve Bank of New York,
Aug. 2003.
4 Ellen R. Rissman, “Can Sectoral Labor Reallocation Explain the Jobless Recovery?,”
Chicago Fed Letter, Dec. 2003.
5 The 10% figure appears in Jyoti Thottam, “Is Your Job Going Abroad?,” Time, Mar. 1,
2004 (Hereafter cited as Thottam, Is Your Job Going Abroad?). The 3% figure was
developed by William Dickens, Senior Fellow, Economic Studies, The Brookings
Institution, and presented during a Mar. 3, 2004 Brookings forum on offshoring.
6 Lynn A. Karoly and Constantijn W.A. Panis, The 21st Century at Work, prepared by the
RAND Corporation for the U.S. Department of Labor, 2004. (Hereafter cited as Karoly and
Panis, The 21st Century at Work.)
7 John Sullivan, “Forum Reveals Divisions Over Effects of Exporting U.S. Jobs to Other
Countries,” Daily Labor Report, Dec. 12, 2003.

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question the adequacy of the government’s safety net to meet the
needs of already well educated and well paid workers who lose their
jobs to offshore outsourcing (e.g., financial analysts, income tax
preparers, and X-ray technicians).8
This report does not attempt to sort through all these issues, some of which are
addressed in other CRS Reports.9 Instead, it begins by examining the antecedents of
offshoring service sector activities and then synthesizing the voluminous writings in
recent years about the business practice. The reemployment and earnings
experiences of displaced workers are then analyzed, focusing specifically on evidence
of a rise in job insecurity among white-collar workers in the service sector. The
report closes with discussion of existing federal legislation and proposals meant to
ameliorate the impact of offshore outsourcing on U.S. workers.
The Development of Offshore and
Domestic Outsourcing
The overseas relocation of manufacturing work predates by decades the current
wave of offshoring service sector jobs. Major U.S. companies, initially responding
to heightened competition from Japanese and European multinational corporations,
opened facilities abroad during the 1970s and 1980s that turned out goods formerly
produced by comparatively well paid, often unionized U.S. factory workers (e.g.,
assembly-line workers in the automotive industry).
Additionally, U.S. companies reacted to the back-to-back recessions of the early
1980s by focusing on their core missions and contracting out activities that
specialized domestic enterprises could perform more efficiently (e.g., janitorial
services). Firms restructured their operations by outsourcing jobs to:
! temporary help supply agencies,
! professional and business services establishments (e.g., accounting
firms), and
! independent contractors.
These kind of work arrangements are referred to as contingent or alternative, as in
arrangements that differ from traditional jobs (i.e., those with an implicit or explicit
offer of job security).10 U.S. demand for employment (including temporary help)
8 Christopher Koch, “Backlash,” CIO Magazine, Sept. 1, 2003.
9 CRS Report RL32484, Foreign Outsourcing: Economic Implications and Policy
Responses
, by Craig Elwell; CRS Report RS21883, Outsourcing and Insourcing Jobs in the
U.S. Economy: An Overview of Evidence Based on Foreign Investment Data
, by James
Jackson; CRS Report RL32047, The “Jobless Recovery” from the 2001 Recession: A
Comparison to Earlier Recoveries and Possible Explanations
, by Marc Labonte and Linda
Levine; and CRS Report RL32194, Job Loss: Causes and Policy Implications, by Marc
Labonte.
10 For more information on alternative work arrangements see CRS Report RL30072,
(continued...)

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services continued to increase during the 1990s. It is projected to be one of the
fastest growing industries in the current decade,11 thus strongly indicating that
domestic outsourcing of formerly in-house functions is a permanent reorganization
of how work is performed.
The latest recession, which ended in November 2001, prompted employers to
achieve further efficiencies by taking advantage of technological innovations that
minimize the importance of physical distance between companies. The now
widespread dissemination of technologies that enable relatively low cost, good
quality, and high speed transmission of voice and data communications has enabled
U.S. firms to extend offshoring beyond the factory jobs of blue-collar workers to the
services jobs of white-collar workers (e.g., computer programmers and call center
operators). Service sector jobs at risk of being offshored thus are both those held by
information technology (IT) workers and technology-enabled workers
.
Events that transpired during the intervening decade of the 1990s enhanced the
ability of other countries to export services — particularly IT services — to the
United States and other developed countries (e.g., the United Kingdom). One such
event was the Y2K crisis: U.S. firms, in response to a tight supply of computer
programmers in the late 1990s, turned to companies principally located in India to
make the code fixes needed to avert problems with computer systems by the time
2000 arrived; the domestic firms that utilized these programmers reportedly were
pleased with the quality of their work.12 Another event was the educational systems
of foreign nations graduating an abundant supply of well educated, sometimes
English speaking individuals. In some cases, the number of persons with IT and
accounting skills exceeded the immediate needs of their local economies (e.g., China,
Eastern Europe, India, and the Philippines).13 And, because English is the language
of the computer industry regardless of country, IT services can be provided by a wide
array of non-English speaking, comparatively low wage nations (e.g., Argentina,
Brazil, Bulgaria, China, the Czech Republic, Hungary, Jordan, Lithuania, Mexico,
Slovenia, Russia, and Ukraine).
10 (...continued)
Temporary Workers as Members of the Contingent Labor Force, by Linda Levine; and CRS
Report RL32387, Self-Employment as a Contributor to Job Growth and as an Alternative
Work Arrangement
, by Linda Levine.
11 Jay M. Berman, “Industry Output and Employment Projections to 2012,” Monthly Labor
Review
, Feb. 2004.
12 Jeffrey Marshall, “Outsourcing Overseas: Savings Road Leads to India,” Financial
Executive
, Sept. 2002.
13 Pete Engardio, Aaron Bernstein, and Manjeef Kripalani, “The New Global Job Shift,”
Business Week, Feb. 3, 2003 (Hereafter cited as Engardio, et al., The New Global Job Shift.);
Larry Greenemeier, “Offshore Outsourcing Grows to Global Proportions — U.S. Companies
Extend Their Search Beyond India for IT Help Overseas,” InformationWeek, Feb. 11, 2002;
and Drew Robb, “Offshore Outsourcing Nears Critical Mass — The IT Talent Shortage in
the United States is Driving More Companies to Use Overseas Developers,”
InformationWeek, June 12, 2000.

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Current and Future Prospects for Offshoring Jobs
Reasons for Worker Anxiety
The current wave of offshore outsourcing has caused considerable anxiety
among both employed and unemployed workers. The seemingly greater publicity
generated by the extension of offshoring from manufacturing to service sector
industries is the case for the following reasons:
White-collar workers comprise the majority of all U.S. workers and most white-
collar workers are employed in the service sector, which accounts for the vast
majority of total U.S. employment. In other words, many more people today believe
their jobs are at risk of being exported. Compounding their fear is the prospect of
having to find new positions in a sluggish labor market.
Domestic outsourcing and offshore outsourcing result in job losses for those
employees who no longer are required to produce the goods and services that their
employers decided to purchase. Some displaced workers must seek jobs in other
fields because the domestic firms that specialize in providing outsourced functions
do so more efficiently than their former employers. Others who lose their jobs to
domestic outsourcing can continue to perform similar work — perhaps for lower
wages and fewer benefits — by finding jobs in the industries now supplying goods
and services to their ex-employers (e.g., as workers on the payrolls of temporary help
agencies rather than manufacturers).14 Thus, a key difference between domestic and
offshore outsourcing
is that none of the jobs that are contracted out remain available
to U.S. workers when employers send the work to companies located overseas.15
The loss of service sector jobs to offshoring has led people to ask what field is
going to be the next generator of jobs for U.S. workers, and more particularly, of
good jobs. The question is unanswerable. Candidates that have been put forth (e.g.,
nanotechnology and biotechnology) are unlikely, at present, to provide as many new
jobs as appear to be moving abroad; further, life sciences jobs have themselves begun
to be sent overseas.16 Although U.S. workers have been encouraged to focus on
upgrading their skills to be capable of performing the high-level, high-paying jobs
14 For information on the statistical exaggeration of the employment decline in
manufacturing because workers still are engaged in goods production despite being
categorized in the employment services industry see Council of Economic Advisors,
Economic Report of the President (Washington, D.C.: GPO), Feb. 2004.
15 However, offshoring likely creates other jobs for U.S. workers (e.g., those who develop
the contracts for outsourced activities and those who oversee their performance). In
addition, if the overseas firms and workers who perform these contracted activities
subsequently purchase U.S. products and make investments in the United States, their
actions will create jobs in the United States.
16 Andrew Pollack, “Medical Companies Joining Offshore Trend,” New York Times, Feb.
24, 2005.

CRS-6
that are expected to be created by further U.S. technological innovation,17 an oft-
posed question in response to this advice is: in what occupations? The acquisition
of IT skills had been the mantra for several years; however, these are among the jobs
that appear newly at risk of being exported.
How Many Jobs Are We Talking About?
People also have questioned whether we now are seeing the initial leakage of
service sector jobs from the United States, with many more to follow in an expanding
range of white-collar occupations. The query has elicited very different replies.
The tip of the iceberg. Offshoring of white-collar jobs initially involved
“simple service work, like processing credit-card receipts, and mind-numbing digital
toil, like writing software code.”18 It more recently has expanded to such functions
as providing help desk support to U.S. customers, processing home loans of U.S.
mortgage applicants, interpreting CT scans of U.S. hospital patients, preparing
corporate financial analyses for U.S. investors, and developing computer-generated
blueprints for industrial plants and residential housing in the United States. Surveys
of U.S. companies show they appear increasingly willing to send overseas a wide
variety of more complex IT functions such as application design and development,
IT infrastructure management, and packaged application implementation.19
Some observers foresee substantial increases in offshoring because of U.S.
employers’ satisfaction with overseas service providers20 and because of the 45%-
55% cost savings it arguably generates.21 For example, the average M.B.A.
employed in India’s financial services industry in 2003 reportedly earned 14% of the
salary of comparably employed U.S. workers, while IT professionals earned 13% as
much and call center staff earned 7% as much as their U.S. counterparts.22
One study estimated that some 14 million jobs, or 11% of total U.S.
employment in 2001, have attributes that could allow them to be sent overseas (e.g.,
no in-person customer servicing required; IT-enabled work process that can be
accomplished via telecommuting; fairly wide gap between job’s pay in the United
States compared to similar job in destination country; and destination country has
17 Clare Ansberry, “Why U.S. Manufacturing Won’t Die,” Wall Street Journal, July 3, 2003;
and Steve Lohr, “Many New Causes for Old Problem of Jobs Lost Abroad,” New York
Times
, Feb. 15, 2004.
18 Engardio et al., The New Global Job Shift, p. 50.
19 Jeff Moad, “Offshore Job Competition to Increase,” eWeek, Jan. 31, 2003; and Jaikumar
Vijayan, “Companies Expected to Boost Offshore Outsourcing,” Computerworld, Feb. 17,
2003.
20 “New Study Finds Companies are Satisfied with Offshore Outsourcing of IT, Business
Process and Contact Center Services,” Business Wire, Feb. 4, 2004.
21 McKinsey Global Institute, Offshoring: Is It a Win-Win Game?, Aug. 2003. (Hereafter
cited as McKinsey Global Institute, Offshoring: Is It a Win-Win Game?)
22 Saritha Rai, “Financial Firms Hasten Their Move to Outsourcing,” New York Times, Aug.
18, 2004.

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few language, institutional, and cultural barriers).23 The researchers who developed
this estimate note, however, that while these jobs are susceptible to offshoring it is
an outer limit – that is, not all jobs in the occupational groups are truly at risk of
being offshored
. The occupational groups identified as being susceptible to
offshoring include office support (e.g., data entry keyers), business and financial
support, computer and math professionals, paralegals and legal assistants, and
diagnostic support services.
Forrester Research, Inc. is the source of perhaps the first and most commonly
cited statistics on offshoring. According to a 2004 update of its original projection,
a total of 3.4 million service sector jobs might move abroad by 2015.24 This is a
cumulative figure, and one that spans a much longer period than many feel
comfortable making projections over. Although 3.4 million sounds large in an
absolute sense, it might represent only 2% of total U.S. employment in a single year
— 2015, the last year of the projection period.25
Forrester’s update reflects its assessment that the overseas movement of jobs
will occur at a greater rate in the near term than initially anticipated. As shown in
Table 1, 830,000 white-collar service sector jobs might have relocated offshore
between 2003 and 2005; with almost 400,000 more of these jobs expected to be sent
abroad in the three following years, the total for the 2003-2008 period could reach
1.2 million. Computer occupations might represent one of every five white-collar
service sector positions outsourced overseas through 2008.
23 Ashok Deo Bardhan and Cynthia A. Kroll, “The New Wave of Outsourcing,” Fisher
Center Research Report
, Institute of Business and Economic Research, University of
California-Berkeley, fall 2003. (Hereafter cited as Bardhan and Kroll, The New Wave of
Outsourcing
.)
24 John C. McCarthy, Near-Term Growth of Offshoring Accelerating, Forrester Research,
Inc., May 14, 2004. (Hereafter cited as McCarthy, Near-Term Growth of Offshoring
Accelerating
.)
25 Congressional Research Service estimate based upon extension to 2015 of the U.S. Bureau
of Labor Statistics’ employment projection through 2012, producing an employment
estimate of 171,710,000. Forrester’s figure of 3.4 million was then divided by this rough
approximation of employment for the same year.

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Table 1. Cumulative Number of U.S. Service Sector Jobs
Projected to Shift Offshore by Occupational Group
(numbers in thousands)
Occupational group
2003
2004
2005
2006
2007
2008
Administrative support
146
256
410
475
541
616
Computer
102
143
181
203
228
247
Business and financial
30
55
91
105
120
136
operations
Management
3.5
15
34
42
48
64
Sales
11
22
38
47
55
67
Architecture
14
27
46
54
61
70
Legal
6
12
20
23
26
29
Life sciences
.3
2
4
5.5
6.5
9
Art, design and related
2.5
4.5
8
9
10
11
Total
315
540
830
960
1,100
1,200
Source: Adapted by CRS from John C. McCarthy, Near-Term Growth of Offshoring Accelerating,
Forrester Research, Inc., May 14, 2004.
Note: Statistics are shown only through 2008, the period during which Forrester provides data in one-
year intervals. By 2010, Forrester estimates a total of 1.7 million will have gone offshore for a two-
year increase of one-half million. Over the next five years, Forrester estimates another 1.7 million jobs
will be transferred to other countries for a grand total of 3.4 million by 2015.
Reports of the impact of offshore outsourcing on IT jobs vary in terms of the
number relocated, the timing of the movements, and the presentation of data. For
example, Gartner Inc. announced in mid-2003 that it expected 10% of IT jobs at IT
companies in the United States and 5% of IT jobs at other U.S. companies to be sent
overseas by the end of 2004. It further speculated that, by 2005, employers would
have rehired less than 40% of the workers whose jobs they had offshored.26
Subsequently, in early 2005, Gartner reported that less than 5% of IT jobs in the
United States and in other developed countries already have been sent overseas. It
believes the proportion could climb to 30% by 2015, but the firm does not expect
offshoring to cause a net loss of IT jobs in the United States. While not disputing the
30% claim, some other organizations think it will take longer to reach the figure: 20
to 25 years rather than 10 years.27 In a 2005 study sponsored by the Information
Technology Association of America (ITAA), Global Insight estimated that actual and
26 Diane Morello, U.S. Offshore Outsourcing Leads to Structural Changes and Big Impact,
Gartner Inc., July 23, 2003.
27 Paul McDougall, “Gartner Preducts Huge Increase in Offshore Outsourcing By 2015,”
InformationWeek, Mar. 31, 2005.

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potential software and IT services jobs lost as a result of offshoring between 2000
and 2003 numbered fewer than 112,000. Although it projected a net gain in
aggregate U.S. employment associated with sending more IT work overseas, one
industry group is expected to suffer net job losses: publishing, software, and
communications might have 34,044 fewer jobs in 2005, and 60,658 fewer jobs in
2010, due to this business practice.28 Global Insight projected that offshoring also
could prompt job losses in the professional, consulting, and business services group;
unlike in publishing et al, however, it estimated that more software and IT services
jobs would be created than lost in professional, consulting, and business services.
Overblown fears. Other observers assert that there are limits to the business
practice because U.S. companies will not want to lose close oversight of high skilled
jobs dealing with activities that are essential to their core operations. It has been
suggested that what might occur is overzealous pursuit of offshoring followed by
retrenchment, during which time U.S. employers will learn the types of jobs best
suited to the practice and how to manage a globally dispersed workforce.29 Indeed,
a study released by Deloitte Consulting in 2005 concluded that
outsourcing will lose “holy grail” status. In the future, companies will not
outsource because it is the latest management fad, and “it is the thing to do. ...
Organizations will carefully define core, strategic, and “thought-leadership”
functions and will keep those inhouse to retain knowledge, confidentiality, and
control over key functions. Some organizations will decide to outsource only
short-term.... Many organizations will also engage in large scale re-insourcing
thereby further eroding the outsourcing market.30
Both Dell and Lehman Brothers, for example, returned some inquiry help
services and call center work to the United States due to customer dissatisfaction.31
Other U.S. firms have had to employ IT service providers located in the United States
to fix software produced abroad. Even when imported services are not flawed, some
employers have overestimated the cost savings from outsourcing because a service’s
purchase price is affected by more than inter-country wage differentials (e.g., travel
and managerial oversight costs).32 META Group noted that firms often calculate
labor cost savings by making a “person-to-person comparison (e.g., a full-time
equivalent in India will cost 40% less)” and ignoring “hidden costs and differences
in operating models” that bring down savings to perhaps 15%-20% in the first year
28 Global Insight, Executive Summary: The Comprehensive Impact of Offshore Software and
IT Services Outsourcing on the U.S. Economy and the IT Industry
, Oct. 2005.
29 Sharon Gaudin, “Nearly 1 Million IT Jobs Moving Offshore,” Datamation, Nov. 19, 2002.
30 Deloitte Consulting, Calling A Change in the Outsourcing Market: The Realities for the
World’s Largest Organizations
, Apr. 2005, p. 25.
31 Khozem Merchant, “Tough Call for the US Cost-Cutters,” Financial Times, Dec. 22,
2003.
32 Olga Kharif, “The Hidden Costs of IT Outsourcing,” BusinessWeek online, Oct. 27, 2003;
and Ryan B. Patrick, “Signs of Offshore Backlash Growing,” Computerworld, Jan. 8, 2004.

CRS-10
of offshoring.33 Perhaps reflecting these shortcomings of offshoring, the share of IT
employers that prematurely terminated contracts with overseas IT service providers
rose from 21% in 2004 to 51% in 2005.34
At least two factors that could have put the brakes on the offshoring have failed
to do so, however. Offshore providers of IT services, for example, were able to allay
U.S. outsourcers’ fears about security shortly after the terrorist attacks of September
11, 2001.35 Despite 9/11, U.S. airline carriers have continued their “increased
outsourcing of maintenance jobs overseas — to places like Singapore, Brazil, the
Dominican Republic — not only for international aircraft but even for planes on
purely domestic routes.”36 In addition, concern periodically has arisen among U.S.
outsourcers over unrest in some regions (e.g., disputes between India and Pakistan
as well as in the Middle East). Global providers of software services have responded
by placing more of their clients’ work in a variety of countries, including the “near-
shore” markets of Canada and Mexico.37 Some individual U.S. employers also
believe that moving work to nearby Canada, which has fewer cultural differences
with the United States than India or the Philippines for example, likely reduces its
customers’ potential antipathy to offshoring.38
In summary, most studies find the extent of job losses from services offshoring
relatively small in the aggregate, but somewhat concentrated in a few industries
and occupations. The job losses stem from both a direct impact of offshoring,
which displaces some workers, plus an indirect impact through the productivity
enhancements that it provides. However, there are still unanswered empirical
questions, including the just-mentioned productivity effect. Indeed, offshoring
could raise productivity directly or indirectly by displacing low-wage [low-
skilled] jobs and creating high-wage ones, but it could also do just the opposite
[i.e., result in displacement of high-skilled workers who accept jobs paying lower
wages than they previously earned].39
33 “Offshore Outsourcing Cost-Savings Perceptions Differ from Realities,” Business Wire,
Jan. 13, 2004.
34 “Study Points to Employer Dissatisfaction, Interest in China as Trends in IT Outsourcing,”
Daily Labor Report, June 14, 2005.
35 Julie Gallagher, “Redefining the Business Case for Offshore Outsourcing,” Insurance &
Technology
, Apr. 2002.
36 Al Kamen, “In the Loop,” Washington Post, Feb. 27, 2004, p. A21.
37 “Gartner Dataquest Says IT Outsourcing Industry to Advance with Increased Demand in
Offshore Outsourcing,” Business Wire, Jan. 30, 2003.
38 Ian Austen, “Canada, the Closer Country for Outsourcing Work,” New York Times, Nov.
30, 2004.
39 Robert W. Bednarzik, “Restructuring Information Technology: Is Offshoring a Concern?”
Monthly Labor Review, Aug. 2005.

CRS-11
Job Insecurity Since the 1980s
The state of mind that now prevails is one that characterized the initial years of
the 1990s, when another “jobless recovery” was taking place and stories of worker
anxiety over job insecurity abounded in the media. A month hardly went by without
at least one major U.S. company announcing a layoff that involved thousands of
employees.40 The leading explanation for the heightened feeling of worker anxiety
in that period was “corporate downsizing” (i.e., a net decrease in a firm’s
employment) that often involved internal company restructuring through flattening
the organizational pyramid (i.e., eliminating layers of middle management jobs).
Increased Displacement of White-Collar Workers
Precedes Offshoring of Service Sector Jobs

Data from the Displaced Worker Supplement (DWS) to the Current Population
Survey supports the impression that the nature of permanent job loss has changed.
Generally speaking, long-tenured white-collar workers in some service sector
industries have become more susceptible to displacement. But, blue-collar workers
continue to be at the greatest risk of layoff.41 (See the box below for a description of
the displaced worker population.)
1980s. The risk of job loss among
manufacturing industry workers improved
The U.S. Bureau of Labor Statistics
from 1981-1982 to 1991-1992 (two
(BLS) defines displaced workers as
comparable periods). As the economy
persons at least 20 years old who had
worked for their employers at least
recovered from the severe 1981-1982
three years before losing their jobs
recession, the chance of losing a
because of plant or company closings
manufacturing job decreased. During the
and moves, insufficient work for them
milder 1990-1991 recession, the
to do, or abolishment of their
displacement rate42 among manufacturing
positions and shifts. The definition is
workers rose to 7.1% but did not reach its
intended to identify workers who had
1981-1982 level of 8.2%. (See top panel of
some attachment to their employers,
Table 2.) In contrast, the job security of
were terminated through no fault of
most other workers worsened or stayed
their own, and who did not expect to
about the same. The incidence of
be recalled to their former jobs.
permanent layoffs in finance, insurance, and
real estate quadrupled to 5.5%. While the
displacement rate also climbed (but less steeply) in wholesale/retail trade,
40 For more information see CRS Report RL30799, Unemployment Through Layoffs, by
Linda Levine.
41 Little attention typically is paid to the displacement of workers in service occupations,
who include cooks and servers, cleaners and maintenance workers, hairdressers and child
care workers, and police and firefighters. Workers in service occupations are less likely
than blue-collar and white-collar workers to be affected by offshoring because many of their
jobs require face-to-face interaction with customers.
42 The displacement rate is the number of displaced workers in a particular group divided
by the tenure-adjusted, two-year average estimate of employment for that same group.

CRS-12
construction, and in services, none of the service sector industries was close to
manufacturing’s risk of job loss.
Table 2. Displacement Rates by Industry and Occupation of
Lost Job, 1981-1982 and 1991-1992
Characteristic
1981-1982
1991-1992
All long-tenured workers age 20 and older
3.9
3.9
INDUSTRY
Mining
13.6
7.4
Construction
7.6
8.4
Manufacturing
8.2
7.1
Transportation and public utilities
4.1
4.4
Wholesale and retail trade
3.7
4.7
Finance, insurance, and real estate
1.4
5.5
Services
2.3
2.9
Government
1.2
1.1
Agriculture
5.4
3.8
OCCUPATION
WHITE-COLLAR WORKERS
2.6
3.7
Managerial and professional specialty
2.1
3.6
— Executive, administrative, and managerial
2.5
4.8
— Professional specialty
1.7
2.4
Technical, sales, and administrative support
3.0
3.7
— Technicians and related support
3.3
3.7
— Sales occupations
3.7
3.6
— Administrative support, including clerical
2.5
3.8
BLUE-COLLAR WORKERS
7.3
5.3
SERVICE WORKERS
2.0
2.1
FARMING, FORESTRY, AND FISHING
0.9
1.4
Source: Ryan T. Helwig, “Worker Displacement in 1999-2000,” Monthly Labor Review, June 2004.

CRS-13
The shift in the industrial pattern of displacement translated into a change in its
occupational distribution in light of the predominance of blue-collar workers at
manufacturers and white-collar workers in the service sector. The probability of
permanent layoffs fell among blue-collar workers to 5.3%. It rose to 3.7% among
white-collar workers. (See bottom panel of Table 2.)
White-collar workers whose risk of displacement increased to the greatest extent
were employed in managerial occupations and in administrative support (including
clerical) occupations. The chance of job loss among executives, administrators, and
managers almost doubled to 4.8%. The increased focus of displacement on those
who themselves manage companies had a widespread psychological impact: “When
people on higher rungs of the corporate ladder lose their jobs, it throws fear into the
hearts of thousands of workers” and represents “a corporate vote of no confidence in
any worker’s job security.43 Among those in administrative support jobs, the
displacement rate rose by half to 3.8%. The likelihood of permanent layoffs
increased somewhat, to 2.4%, among professionals as well. These data lend support
to the widespread belief of white-collar workers that their jobs are less secure, but
the change pre-dated any noticeable offshoring of service sector jobs
.
1990s. Displacement rates improved virtually across-the-board during the long
economic expansion of the 1990s. Even when examined against a fairly comparable
period 10 years earlier, the probability of job loss was lower in 1999-2000. (See
Table 3). However, for the first time since the DWS data were collected, the risk of
permanent layoffs among employees of the services industry group (e.g.,
telecommunications firms and providers of computer services to other businesses)
rose to the point that it equaled the average displacement rate
.44
The limited supply of workers available to U.S. employers in the late 1990s was
responsible for the reduced likelihood of being laid off — with the possible exception
of professionals.45 It has been suggested that any offshoring of services that occurred
during this time
can be seen as spinoffs from the US because of tight labor markets, rather than
job transfers out of the US in search of lower labor costs. However, the recent
downturn and ... jobless recovery [2001-2003] have legitimately given rise to the
question whether services outsourcing involves the transfer of US jobs and
occupations to other countries.46
43 Perri Capell, “Endangered Middle Managers,” American Demographics, Jan. 1992, p. 37.
44 Among the approximately 2 million workers displaced in 1999-2000, DWS data show
there were some 69,000 long-tenured workers permanently let go from the computer and
data processing services industry.
45 About 33,000 long-tenured computer systems analysts and scientists as well as some
11,000 long-tenured computer programmers were displaced during the 1999-2000 period
according to DWS data.
46 Bardhan and Kroll, The New Wave of Outsourcing, p. 3.

CRS-14
Table 3. Displacement Rates by Industry and Occupation of
Lost Job, 1989-1990 and 1999-2000
Characteristic
1989-1990
1999-2000
All long-tenured workers age 20 and older
3.1
2.5
INDUSTRY
Mining
10.0
7.5
Construction
5.9
3.3
Manufacturing
5.0
4.7
Transportation and public utilities
3.6
2.7
Wholesale and retail trade
3.9
3.1
Finance, insurance, and real estate
3.5
3.7
Services
2.1
2.5
Government
0.4
0.5
Agriculture
3.2
1.7
OCCUPATION
WHITE-COLLAR WORKERS
2.7
2.4
Managerial and professional specialty
2.3
2.1
— Executive, administrative, and managerial
3.4
2.7
— Professional specialty
1.3
1.6
Technical, sales, and administrative
3.1
2.7
support
— Technicians and related support
3.2
2.7
— Sales occupations
2.9
2.9
— Administration support, including clerical
3.2
2.6
BLUE-COLLAR WORKERS
4.5
3.3
SERVICE WORKERS
1.6
1.4
FARMING, FORESTRY, AND FISHING
1.5
0.5
Source: Ryan T. Helwig, “Worker Displacement in 1999-2000,” Monthly Labor Review, June 2004.
2001 recession and “jobless recovery”. Data covering the the initial
years of the current decade not unexpectedly show an increase in the incidence of
displacement compared to the booming 1990s. In 2001-2002, the displacement rate

CRS-15
was about 4% – which approximated the rate attained during the two earlier periods
that included recessions (see Table 2).
The information industry recorded the highest rate of permanent job loss, at
9.6%. (This round of the DWS introduced a new industrial classification system.
The information industry includes wired telecommunications carriers, radio and
television broadcasting and cable, motion pictures and video, newspapers, and
publishing.) Another industry with a well above-average displacement rate was
professional and business services, at 7.1%. Some IT-intensive industries (e.g.,
computer systems design and related services as well as architectural and engineering
services) lie within this industry group. Both information and professional/business
services previously were classified within the services industry group which, as noted
above, showed an increase in permanent layoffs 2 years earlier. The only industry
outside the service sector with an above-average incidence of displacement in 2001-
2002 was (very cyclically sensitive) manufacturing, at 8.7%.
Reemployment Prospects
In addition to the shift in focus of permanent layoffs toward white-collar service
sector workers, perceptions about “what happens afterwards” exacerbate concern
over job insecurity. If people think there are other jobs available that will pay them
as much as their current jobs, anxiety about displacement likely will be less intense
than if they think their chance for reemployment in comparable jobs is slim.
Table 4. Displaced Workers by Occupation of Job Lost in the
2001-2002 Period and Employment Status in January 2004
Employment status
(percent distribution)
Not in
the
Total
Em-
Unem- labor
Occupation of job lost
(in 000s)
Total
ployed ployed force
Total
3,223
100
74
10
15
White-collar workers
1,869
100
77
9
14
Management, professional, and related occupations
1,072
100
77
9
13
— Management, business, and financial operations
572
100
77
9
13
— Professional and related
501
100
77
10
13
Sales and office occupations
797
100
77
9
15
— Sales and related
351
100
84
6
10
— Office and administrative support
446
100
72
11
17
Blue-collar workers
1,126
100
69
13
17
Service workers
199
100
70
7
23
Source: Unpublished data from the DWS.
Note: The occupational classification system changed with this round of the DWS. Percentages may
not add to 100 due to rounding.

CRS-16
Despite variance in the size of the majority depending upon the
strength/weakness of the labor market, most displaced workers have been able to find
new employment. As shown above in Table 4, almost 3 out of 4 workers displaced
in 2001-2002 again had jobs in January 2004. In addition, white-collar workers who
lose their jobs have proved to be more successful than others in obtaining new
positions. Their reemployment rate most recently was 77%, as against 69% for blue-
collar workers. The issue for most displaced workers, then, is not so much a lack of
jobs per se as it is the quality of their new jobs vis-a-vis their former jobs
.
Wage Prospects
Job quality commonly is measured in terms of earnings levels. Of employees
displaced from full-time jobs in 2001-2002, 40% who were reemployed full-time in
January 2004 were earning at least as much as they had in their pre-displacement
positions. (See Table 5.) This marks a departure from the usual pattern of a small
majority (52%-61%) of full-time job losers subsequently getting full-time jobs paying
as much or more than they previously earned.
Reemployed professionals typically have been among those who fared the best
when pre- and post-displacement earnings are compared. The occupations in which
displaced professionals become reemployed provides a partial explanation for this
finding: as most of these workers typically had obtained new jobs within the same
occupational group,47 they tended to retain the reward for experience (tenure) in their
field that they would have lost had they switched occupations. In January 2004, one-
half of professionals reemployed full-time in wage and salary jobs earned at least as
much as they had in their pre-displacement jobs.
Although trade-related job loss among IT and IT-enabled professionals is such
a new phenomenon that its consequences have not been much researched, some
surmise from earlier studies of worker displacement that offshoring may prove to be
less “costly in terms of unemployment and permanent wage loss as earlier waves of
blue-collar, trade-related, job displacement were.”48 Their speculation is based upon
the studies’ findings that more educated workers usually have an easier time finding
new jobs and generally incur smaller wage declines.
Others argue, however, that offshoring will exert downward pressure on the
wages of higher skilled workers. Additionally, studies typically estimate that trade
has had a fairly small effect on the U.S. wage structure (e.g., by depressing the
relative wages of low skilled workers), but “if trade in services that involve more
highly skilled jobs continues to grow, trade will affect a larger share of the
workforce, so the effect on the wage structure could become larger over time.”49
47 “Displaced Professional Workers Most Likely to Return to the Same Occupation,”
Monthly Labor Review, Oct. 1999.
48 Karoly and Panis, The 21st Century at Work, pp. 172-173.
49 Ibid., p. 177.

CRS-17
Table 5. Workers Displaced From and Reemployed in
Full-Time Wage and Salary Jobs, by Earnings on
Pre- and Post-Displacement Jobs
Reemployed in full-time wage and salary
job
(percent distribution)
Earnings compared to those on
job lost (percent distribution)
At least
Total
Below
equal
At
who
At least
but
but
least
reported
20%
within
within
20%
Occupation of job lost
earnings below
20%
20%
above
Total
100
38
22
23
17
White-collar workers
100
36
24
23
17
Managerial, professional and related occupations
100
33
24
29
14
— Management, business, and financial operations
100
38
25
21
16
— Professional and related
100
28
23
39
11
Sales and office occupations
100
39
22
16
22
— Sales and related
100
41
24
12
22
— Office and administrative support
100
38
21
18
22
Blue-collar workers
100
44
20
21
15
Service workers
100
18
24
29
28
Source: Unpublished data from the DWS.
Note: The occupational classification system changed with this round of the DWS. Percentages may
not add to 100 due to rounding.
While the latest available DWS data reveal that the wage prospects of
professionals continue to exceed those of blue-collar workers, relatively fewer
professional and related workers than service workers earned at least as much in their
new compared to former positions (50% and 57%, respectively). Both the offshoring
of IT as well as other professional jobs and the lack of susceptibility of service
occupations (e.g., health aides, child care providers, and police officers) to offshore
outsourcing might have contributed to this atypical pattern. It also might partly
reflect changes to the occupational classification system in this round of the DWS
(e.g., unlike in the past, technicians are now combined with professionals).
Those full-time employees displaced from management and related occupations
as well as from blue-collar occupations continued to experience poor wage prospects.
Fewer than two in five reemployed managers and blue-collar workers were able to
obtain post-displacement jobs that paid at least as well as their pre-displacement
positions. Differences in the degree of earnings loss by occupation may have to do

CRS-18
with the nature of the skills — general or specific — that members of occupational
groups typically possess. An analysis of white-collar displacement found evidence
to “suggest that managers experience `larger earnings losses than otherwise
equivalent white-collar workers,”50 which accords with the idea that a fairly large
portion of the skills that managers and blue-collar workers possess are job- or
industry-specific. Because skills of this nature are not readily transferable from one
job to the next, managers and blue-collar workers appear less able than others to
command wages on their new jobs that are comparable to their past earnings levels.51
An above-average share of displaced blue-collar workers find new jobs in service
occupations (e.g., janitorial and maintenance positions as well as food preparation
and serving jobs) — usually the lowest paying of all occupational groups.52
Federal Assistance for
Workers Displaced by Offshoring
Congress has demonstrated a longstanding interest in assisting workers who
have lost jobs through no fault of their own (e.g., it has provided regular and, from
time to time, extended unemployment insurance benefits). The following discussion
is limited to proposals meant to mitigate the adverse impact of offshore outsourcing
on U.S. workers.
Current Federal Law
When displacement is expected to be caused by government action, such as
enactment of international trade agreements, Congress has created special programs
to help these individuals. The Trade Adjustment Assistance (TAA) program was
initiated in 1962 and is now authorized by the Trade Act of 1974 (P.L. 93-618) as
amended. Generally speaking, the program offers an additional period of income
support once workers displaced by the importation of articles or shift in goods
production outside the United States have exhausted their regular and extended
unemployment benefits and have met a job training requirement. These workers also
are eligible to receive search and relocation allowances, as well as tax credits to make
obtaining health insurance more affordable. TAA is a vehicle that policymakers have
shown interest in utilizing to assist workers in the service sector who lose their jobs
to offshoring.
50 Lori G. Kletzer, “White-Collar Job Displacement,” Proceedings of the 47th Annual
Meeting, Industrial Relations Research Association
, 1995, p. 105.
51 According to Derek Neal, “Industry-Specific Human Capital: Evidence from Displaced
Workers,” Journal of Labor Economics, vol. 13, no. 4, Oct. 1995, workers who switch
industries upon reemployment (e.g., due to the long-term employment decline at
manufacturers) incur larger wage costs than workers able to remain in their pre-displacement
industries.
52 Ryan Helwig, “Worker Displacement in a Strong Labor Market,” Monthly Labor Review,
June 2001.

CRS-19
The Worker Adjustment and Retraining Notification Act (WARN) also was
enacted to help workers laid off through no fault of their own to more quickly find
new employment. P.L. 100-379, enacted in 1988, requires employers to provide
written notice of mass layoffs and plant closings to workers or their representatives,
state dislocated worker units, and the chief elected official of a unit of local
government at least 60 days before the event. The advance notice requirement
applies to employers, closings, and layoffs of a certain size. Some Members
proposed extending WARN to explicitly cover offshoring that results in job losses.53
Education and training frequently are mentioned as ways not only to enable
displaced workers to obtain new jobs but also to empower individuals to take
advantage of technology’s effects on the world of work. At present, the Workforce
Investment Act (WIA, P.L. 105-220) provides services targeted at “dislocated
workers” who include job losers unlikely to be recalled to work in their former
industries and occupations. Unlike TAA, training for dislocated workers through
WIA is not an entitlement.54 Tax incentives also are in place to encourage people to
utilize their own resources to expand and improve their skill sets.55 However, some
individuals who lose their jobs to offshoring might not think they need to undertake
retraining or skill upgrading because, for example, they expect hiring of experienced
workers with IT qualifications to pick up once firms resume substantial computer-
related spending. Others, while acknowledging their need to retrain, may be stymied
by the widening range of work that appears susceptible to international trade
competition.
The Most Often Mentioned New Proposal
Offshore outsourcing generally was not being discussed when Kletzer and Litan
suggested in early 2001 that “wage insurance” be provided to mitigate the adverse
impact of involuntary worker displacement. They propose that for those long-time
full-time employees who become unemployed through no fault of their own and who
subsequently accept full-time jobs paying less than their pre-displacement wages,
government provide a subsidy through the federal-state Unemployment Insurance
system equal to a portion of the wage loss for up to two years following
reemployment.56 Such a program, they contend, would reduce worker anxiety over
trade liberalization, among other factors that can result in job loss (e.g., technological
innovation), and would help speed reemployment of dislocated workers.
At a 2004 briefing on offshore outsourcing, Catherine Mann of the Institute for
International Economics pointed to the wage insurance program in the Trade Act of
53 For more information, see CRS Report RL31250, The Worker Adjustment and Retraining
Notification Act
(WARN), by Linda Levine.
54 For further information, see CRS Report 97-536, Job Training Under the Workforce
Investment Act (WIA): An Overview
, by Ann Lordeman.
55 For more information, see CRS Report RL31129, Higher Education Tax Credits and
Deduction
, by Adam Stoll, James B. Stedman, and Linda Levine.
56 Lori G. Kletzer and Robert E. Litan, A Prescription to Relieve Worker Anxiety, Institute
for International Economics, Policy Brief 01-2, Feb. 2001.

CRS-20
2002 as model for serving a broader eligible population.57 The existing
demonstration program is available only to some older workers who lose their jobs
due to international trade.58
The McKinsey Global Institute put forth a wage insurance proposal that has
private sector rather than government funding. It recommends that, as part of a
severance package, businesses purchase insurance for displaced workers to cover
their lost wages during the median period of unemployment for their occupational
group and provide them with a portion of any wage loss incurred upon reemployment
in full-time jobs.59
crsphpgw
57 Fawn H. Johnson, “Expanded Wage Insurance Programs Would Calm Outsourcing Fears,
Analysts Say,” Daily Labor Report, Apr. 5, 2004.
58 For more information see CRS Report RL33054, Older Displaced Workers in the Context
of an Aging and Slowly Growing Population
, by Linda Levine.
59 McKinsey Global Institute, Offshoring: Is It a Win-Win Game?.