Penn State experts: Pennsylvania is more susceptible to job offshoring

University Park, Pa. — The current economic recession may have increased the risk of Pennsylvania jobs being offshored, according to a report from workforce development experts at Penn State.

The researchers, who also studied how susceptible Pennsylvania jobs are to offshoring, said the Commonwealth faces a higher risk of offshoring compared to the rest of the nation.

“The recession is a time when a company really has to tighten its belt and lower costs,” said David Passmore, a professor with the Penn State Workforce Education & Development Initiative. “Before, offshoring was seen as an opportunity to change how companies do business; during a recession it is more of a necessity.”

The study found that one-fourth of all Pennsylvanians employed during 2009, in jobs which provided services, were susceptible to offshoring. In fact, Pennsylvania workers were also more likely to hold those “offshorable” jobs compared to their national counterparts.

In the report, Passmore and his colleagues, Rose Baker and Ki Seok Jeon, said that jobs which are routine and which do not require face-to-face contact or regional knowledge have the greatest potential to be offshored. Among those are call center employees, radiology, payroll, and back office workers.

The study did specify several Pennsylvania counties with the highest degree of susceptibility to offshoring -- meaning the risk of offshoring is at least 10 percent higher than the rest of the state. Those include: Clearfield, Clinton, Fayette, Lawrence, Luzerne, Venango, Adams, Forest, Juniata, Pike, Sullivan and Union counties.

Common reasons for shipping jobs overseas would include: the ability to pay lower wages, avoid employee benefits and have more lax safety or environmental regulations. In a recession, these cost savings make the notion of offshoring all the more appealing, Passmore said.

Some companies in Pennsylvania have already been involved with the offshoring of jobs, according to the report.

In 2004, Earthlink, a nationwide Internet service provider, closed its Harrisburg operations and released 400 workers; their jobs went to workers in India.

In 2003, a Corning Asahi plant which produced television tube glass closed in State College, Pa., and relocated to China.

According to Passmore, the risk of offshoring is widely dispersed across job types, geographical locations and salary levels. “It is something every person in every county needs to worry about,” he added.

To see the full “Offshorability of Pennsylvania Jobs” report, click on online.

The Workforce Education & Development Initiative is part of Penn State Outreach, the largest unified outreach organization in American higher education. Penn State Outreach serves more than 5 million people each year, delivering more than 2,000 programs to people in all 67 Pennsylvania counties, all 50 states and 114 countries worldwide.

Credit: Penn StateCreative Commons

Last Updated November 19, 2010