Offshorability Threatens Pennsylvania Jobs

by David Price (July 2010)

UNIVERSITY PARK, Pa. -- A comprehensive new report details the significant potential that Pennsylvanians face for having their jobs moved out of the United States, or offshored.

The report by researchers from the Institute for Research in Training and Development in Penn State's College of Education indicates that one-quarter of all Pennsylvanians employed in service-producing occupations during 2009 were susceptible to having their jobs offshored, and Pennsylvanians employed in service-producing industries are at a higher risk of having their jobs offshored than similar workers throughout the United States.

“Jobs susceptible to being offshored have work inputs or outputs easily transmitted or transported, do not require local face-to-face work, do not require knowledge of regional cultural idiosyncrasies, or involve routine or scriptable work,” notes David Passmore, director of the Institute and professor of workforce education and development in Penn State's College of Education. Passmore conducted this research with Rose Baker, assistant professor of workforce education and development in the College, and Ki Seok Jeon, a doctoral candidate in the Workforce Education and Development program.

The report, titled Susceptibility of Pennsylvania Service-Producing Occupations to Offshoring, examines 160 service-producing occupations in Pennsylvania for their potential to be offshored. It was recently presented at the Pennsylvania Workforce Investment Board Symposium and is available online—with supporting materials and resources for employees and researchers—at http://PA-IRTD-Offshore.notlong.com.

Overall, Pennsylvanians were more likely to work in jobs with the highest risk for offshoring and were less likely to work in jobs with relatively low risk for offshoring than were workers in the service-producing sector throughout the country. At highest risk among Pennsylvania's service-producing workers were those in lower paying positions.

The potential for offshoring could have broad implications for the Commonwealth's education systems. Notable among the jobs with greater potential for offshoring are educators, as the rise in distance education and online learning has demonstrated that educators' jobs have an increased potential for offshoring.

Conversely, offshoring can affect the demand for education and training. People who lose their jobs due to offshoring may need to be retrained in order to find new work at a comparable wage, and they are eligible to obtain educational benefits through consolidated Trade Adjustment Assistance (TAA) program, which came into effect at the end of 2002. This program offers many benefits for workers whose jobs were offshored, including an additional 26 weeks of income support for workers enrolled in training (to a maximum of 78 weeks after unemployment benefits are exhausted). To qualify for TAA, workers must have lost a job a result of an increase in foreign imports or through the relocation of the production facility to a country with whom the U.S. has a free trade agreement.

Also of note is the lack of geographic predictability for offshoring of jobs in Pennsylvania. The report notes, "The number and concentration of jobs susceptible to offshoring in service-producing occupations was widely dispersed among Pennsylvania counties."