Committee on Science and Technology
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Investigations :: July 24, 2006

Globalization and the American Workforce

What's up with the continued offshoring of American jobs?

"Offshoring is moving up the technological food chain with more sophisticated jobs and facilities going overseas. For workers this translates into flat job growth and stagnant wages, which is hard on American families and our communities.  We need to find ways for American workers to compete in the world economy without sacrificing their standard of living."

- Science & Technology Committee Chairman Bart Gordon

Offshoring is a reality.  While many prefer to ignore the issue, U.S. jobs are being lost and U.S. workers are feeling the effects.

Science Democrats are working to bring the truth about offshoring to light. 

A study from the Government Accountability Office - obtained in the 109th Congress - confirms that U.S. jobs continue to be moved "offshore" to lower wage environments.  This study comes on the heels of a report from the Technology Administration within the U.S. Department of Commerce that found much the same.

In continuing its committment to address U.S. competitiveness, Chairman Gordon most recently led Members in a discussion with hearing witnesses about the offshoring of high-tech jobs to developing nations, during a June 12, 2007 hearing.

Members also discussed a recent University of Texas study which found that of the 57 major announcements of locations of global telecom R&D facilities in the past year, more than 60 percent were located in Asia, versus a meager nine percent located in the U.S. At the hearing, Gordon expressed his intent to continue exploring the implications of off-shoring in order to eventually develop the right policies to lead to a strong economic future for our country.

Job losses continue in industrial sectors across the U.S. with little response from the Federal Government, noted U.S. House Science & Technology Committee Chairman Bart Gordon (D-TN).  Gordon and fellow Committee Democrats have sought to highlight this growing problem – known as “offshoring” – in an attempt to insure hard-working Americans are kept in the loop on the state of their jobs.

Democrats’ efforts have centered on obtaining data compiled in 2004 by analysts at the Technology Administration (TA) within the Department of Commerce. That report, entitled An Overview of Workforce Globalization in the U.S. IT Services and Software, U.S. Semiconductor and the U.S. Pharmaceuticals Industries, provided an in-depth analysis of the ongoing loss of U.S. high-tech jobs and represents the most complete analysis to date on offshoring of U.S. jobs.

Until July 24, 2006, the TA analysts' report has never been publicly released.  Here are the executive summary and, for comparison purposes, the twelve-page "six-month assessment" the Department of Commerce released last September.

Cover of the Technology Administration Draft report.  Click to see the executive summary in PDF format.

An Overview of Workforce Globalization in the U.S. IT Services and Software, U.S. Semiconductor and the U.S. Pharmaceuticals Industries

First page of the August 2005 Six-Month Assessment.  Click image to see the full document in PDF format.

Six-Month Assessment of Workforce Globalization in Certain-Knowledge-Based Industries


Democratic Members of the Science Committee have a long-standing interest in using Federal programs and agencies within our jurisdiction to undertake initiatives that prepare Americans for high-technology, high-paying jobs.  In the 1980s, this "offshoring" seemed limited to manufacturing jobs in blue-collar industries such as textiles, steel or metal fabrication.  The U.S. responded by helping create the precursors of the Advanced Technology Program and the Manufacturing Extension Partnership Program at the Department of Commerce.

Recently, however, offshoring has begun to strike at the very high-tech jobs that we believed U.S. workers would move to fill as blue-collar opportunities shifted to other countries.  A Cable News Network report in early March 2006 noted that 500,000 American jobs have migrated to India in recent years.  That number is expected to triple in the next two years as American companies seek to cuts costs and streamline business.  India is but one example of a country that seems to be gaining employment at the expense of American workers.  Over the last six years, the U.S. has lost just under 3 million jobs due to offshoring.

Now, we are witnessing software engineering, computer design, research and development, radiology, architecture and design and other high-value-added positions moving offshore to low-wage markets such as India, China, Ireland, and Brazil.

For the past two years, Science Committee Democrats tried to get specific details and information from Federal experts on this alarming trend.  Our efforts were met with resistance, stonewalled by Federal agencies, and a lack of the Committee's traditional bipartisan cooperation.  The Federal Government did the research, taxpayers paid for the report and the Technology Administration produced its analysis and findings, yet the Administration buried the truth in rhetoric.  Democrats wanted the data, and finally got it.

Brief Timeline of the Report and Informational Requests

  • January, 2004:  The FY2004 Consolidated Appropriations report directed the Technology Administration to undertake a study on "the extent and implications of workforce globalization in knowledge-based industries such as life sciences, information technology, semiconductors and finanacial services."  The report was due by June 23, 2004.  $335,000 was earmarked for this study.
    • No less than five analysts at TA immediately began work on the report in January 2004, ultimately producing a draft almost 200 pages in length.  Just before submitting their drafts to TA management, the analysts were ordered to remove all citations and sourcing in their analytical report.  However, neither the report nor a summary is ever released by Commerce.
  • May, 2005:  Democratic Staff of the Science Committee ask the Commerce Department for the status of the offshoring report and a briefing.  Commerce Legislative Affairs never responded to the request (nor to subsequent requests during the summer).
  • August 3, 2005:  Reps. Gordon, Costello (D-IL) and Wu sent a letter to Secretary Gutierrez asking him to release the report - now more than a year overdue - and also asking questions regarding why the report was so late.  The Secretary did not respond.
  • September 15, 2005:  A report summary, twelve pages in length, was released by Commerce in response to pressure from the Committee letter and from a Freedom of Information Act request filed by the trade publication Manufacturing News.  The summary was fifteen months late.  Staff learned that it was actually composed during August of 2005 and "back-dated" to comply with the Appropriation Committee's direction.
  • October 11, 2005:  Reps. Gordon, Costello and Wu sent a letter to Secretary Gutierrez once again requesting a copy of the original draft report produced by TA analysts.  No response.
  • December 23, 2005:  Dan Caprio, Deputy Assistant Secretary for Technology Policy, denied Democratic Members' request for the original draft report.  His reply thanked them for their "FOIA request."
  • January 26, 2006:  Rep. Gordon asked Chairman Boehlert (R-NY) to sign a document request to the Commerce Department requesting a copy of the draft report and other materials.  Chairman Boehlert declined.
  • February 8, 2006:  Reps. Gordon and Wu wrote to Subcommittee Chairman Ehlers (R-MI) asking that he sign a request for the final draft report.  Chairman Ehlers declined through his staff.
  • March 9, 2006:  Rep. Gordon introduced H.Res. 717, a Resolution of Inquiry directing the Secretary of Commerce to deliver a copy of the final draft TA report to Congress.  The Resolution was referred to the House Science Committee.
  • March 29, 2006:  The Committee defeated the Resolution of Inquiry, but on a tie vote (17-17) failed to report to the House that the Resolution should be defeated.   Chairman Boehlert recessed the markup.
  • April 5, 2006:  The Committee reconvened to complete the markup and reported the Resolution of Inquiry to the House without a recommendation.  At the same time, Chairman Boehlert agreed to request that the Department deliver the report to the Committee.
  • June 12, 2007:  Chairman Gordon continues the discussion on the off-shoring of high-tech jobs to developing nations. During the first hearing on the topic in the 110th Congress, one of the witnesses, Dr. Alan Blinder estimated that more than one in four American jobs are vulnerable to offshoring. More striking is his finding that most American technical jobs in the science, technology, engineering and mathematics (STEM) fields are among the most vulnerable to offshoring.
  • July 26, 2007:  The second hearing in this series was chaired by Rep. Brian Baird (D-WA) and focused how America’s universities are addressing the challenges of globalization - both by establishing campuses overseas and preparing their domestic students to compete in the global marketplace. Witnesses at this hearing also explored the implications for the U.S. science and engineering enterprise.
  • October 4, 2007:  The third hearing in this series was chaired by Rep. David Wu (D-OR).  This hearing explored the factors companies use to locate their research & development (R&D) and science, technology, and engineering intensive facilities. 

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