GAO says uncle Sam does not know why jobs are disappearing.

The federal government does not have reliable data to monitor the shift of service sector jobs to foreign nations, according to the General Accountability Office. In a report prepared for five democratic members of the House of Representatives, GAO found that U.S. government data provide "some

The best statistics available for analyzing the offshore outsourcing trend are flawed. The Bureau of Labor Statistics' Mass Layoff Survey follows only a small fraction of total layoffs--those from large companies that involve the layoff of more than 50 people over a five-week period. "The survey identifies only a portion of total layoffs because the survey does not cover establishments with fewer than 50 employees," says GAO.

The Current Employment Statistics (CES) indicate that employment in service industries that are subject to international competition has declined at a high rate relative to those that are not subject to global competition. "The average annual rate of decline between March 2001 and June 2004 for computer systems design was 5.7 percent, and 7.9 percent for accounting and bookkeeping, while the overall decline in business support services was 1.2 percent," says GAO. During this period, total nonfarm employment increased by 0.2 percent.

"Selected industries associated with offshoring saw deeper job losses and slower, more volatile recovery," says the GAO assessment. Employment in these sectors is beginning to increase but at a very slow rate. "General employment data do not allow isolating job losses attributable to offshoring."

The Bureau of Labor Statistics is also having to revamp its projections of the labor force due to offshore outsourcing. BLS recently estimated that U.S. employment would grow by 14.8 percent between 2002 and 2012 to 165.3 million jobs. But this estimate is down by 2.4 million jobs from BLS's previous projection made for the period between 2000 and 2010.

The latest growth rate for occupations in areas related to computers are "significantly lower than the rate projected for the period 2000 through 2010," says GAO. "Thirteen of the occupations with the largest projected declines are office and administrative support, none requiring a bachelor's degree."

BLS is implementing changes to capture the impact of offshore outsourcing for its 2014 projections. The agency is developing a list of occupations that face a high risk of offshoring. "The list is intended to alert BLS analysts to systematically seek out better information on offshoring in determining employment trends in these occupations," says GAO. "BLS does not expect to produce quantitative assessments of offshoring."

Rep. John Dingell, who requested the study, says it is "unacceptable that our government is completely unprepared in dealing with this issue."

The report, "International Trade: Current Government Data Provide Limited Insight into Offshoring of Services" (GAO-04-932), is located at: http://www.gao.gov/new.items/d04932.pdf.