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Labor Dept.: Outsourcing Smaller Than Thought

While many American workers fear the prospect of seeing their jobs shipped overseas, a new government report indicates that few layoffs can be blamed directly on work being sent abroad.

In the first three months of the year, the jobs of 4,633 U.S. workers were sent to foreign workers, according to a Labor Department report released Thursday.

Those displaced workers, counted for the first time in the new report, were about 2 percent of the 239,361 private-sector, non-farm workers who lost their jobs for at least 31 days from January through March.

The Labor Department (search) figures, however, aren't comprehensive. They include only layoffs at companies employing 50 workers or more, where at least 50 people filed for unemployment benefits during a five-week period and were out of work for more than 30 days. About a third of all mass layoffs extend for more than 30 days, the report said.

Offshoring (search) has affected blue-collar workers in America's factories for years. But the issue has been magnified in a presidential election year with an exodus of white-collar service jobs, particularly in call centers and technical support.

Mark Zandi, chief economist at Economy.com, said the offshoring figures are consistent with other estimates based on broader economic data. That data, he said, suggests an overall first-quarter loss of about 350,000 jobs at an annualized rate.

The report shows the outsourcing of jobs to other countries "is a significant force in our job market," he said. But now that the economy is creating jobs, adding 1.2 million since May, "it's not an overwhelming force," Zandi said.

The Bush administration is sensitive to the issue — it was criticized for an economic report in February stating that offshoring jobs "makes sense," followed by comments from President Bush's economics team supporting that view.

Democrat John Kerry is making job losses under Bush a central issue in his presidential campaign, and has run television ads criticizing Bush for signing his name to an economic report that says sending jobs overseas "makes sense" for America.

Kerry has announced an economic plan that calls for lowering corporate taxes to promote job creation, and eliminating tax incentives that send U.S. jobs overseas. Kerry also supports legislation that would require companies to give employees advance warning before moving their jobs outside the United States.

But economists, including Federal Reserve Chairman Alan Greenspan (search), say the United States must compete in a global economy that also will help create new jobs at home.