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Outsourcing of Jobs Could Affect U.S. Real Estate.(United States)(Brief Article)
About 14 million U.S. jobs are at risk for offshoring, in the sense that they meet the conditions that make them candidates for sending them overseas, according to Dwight M. Jaffee, a finance professor at the University of California at Berkeley.
About 25% of these jobs, or about 3.5 million jobs, are likely to be actually offshored, he believes. Speaking at a panel session on the impact of outsourcing at the Urban Land Institute's fall meeting here, Mr. Jaffee mentioned Dallas as a city that has a high concentration of jobs that are vulnerable to offshoring. Washington, Atlanta, Boston, San Jose and Stamford, Conn., are also on this list, he said.
Based on one estimate of 250 square feet of office space per U.S. office sector worker, this translates into an implied loss of about 875 million square feet of office space in the U.S, or about 6.7% of the total office space of 13 billion square feet in the country, according to Mr. Jaffee.
While this is a significant loss, it is "not off the charts in terms of magnitude," he remarked. Further, this is a gross loss and people who lose their jobs are likely to find employment again, creating only
a short-term impact on the bottom line and making for a "benign story," the way he looks at it.
Bruce Rutherford, managing director, tenant representation, Jones Lang LaSalle, Houston, said that in terms of the global picture for job offshoring, 70% of the offshoring is done by American companies, 20% by Asian companies to other Asian countries, and 10% by the rest of the world (primarily Europe and also South America). He cited a survey on the practice, which found that 25% of companies began offshoring non-manufacturing jobs more than 10 years ago. Another 41% began doing this between three and 10 years ago.
And 57% of the companies surveyed reported that they are offshoring new jobs primarily, rather than replacing U.S. jobs. Another 87% said that they use service providers or partners to assist in offshoring activities. The benefits companies see in offshoring include lower labor costs, lower labor turnover, improved labor quality, the enablement of 24/7 operations, diversification of operations and enablement of "multilingual capability."
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Source: HighBeam Research, Outsourcing of Jobs Could Affect U.S. Real Estate.(United...