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News Release

Contact: Chris McManes
Senior Public Relations Coordinator
Phone: + 1 202 785 0017, ext. 8356
E-Mail: c.mcmanes@ieee.org

Offshoring Is Major Cause of Technical Unemployment,
IEEE-USA Survey Reveals

WASHINGTON (08 March 2005)  Offshoring is the second-highest cause of unemployment among U.S. technical professionals, according to the 2004 IEEE-USA Unemployment Survey released today.

The leading cause of unemployment, cited by 62 percent of U.S. IEEE members who reported being laid off, was a business downturn. Fifteen percent reported that their jobs were transferred offshore, while 10 percent pegged merger or acquisition as the cause of their layoff.

A correlation between results of the Unemployment Survey and the 2004 IEEE-USA Salary & Fringe Benefit Survey, which showed the first median income decline for U.S. IEEE members in 31 years, revealed that people in industries reporting the largest drop in income also reported the highest percentage of unemployment because of offshoring. The following chart illustrates this:

Industry % Drop in Income % Offshoring Displacement
Electrical/Electronic Manufacturing 2.5 16.2
Computers 2.4 17.4
Communications 1.8 15.2

“This data supports our contention that offshoring not only contributes significantly to U.S. high-tech unemployment, but also suppresses wages,” IEEE-USA President Gerard Alphonse said. “Our concerns extend beyond job loss and depressed incomes to threats to our nation’s innovation infrastructure. Because innovation tends to follow jobs, key drivers of our economic prosperity could be lost.”

The 2004 Unemployment Survey was sent to 5,329 U.S. IEEE members who reported being laid off at some point in the 2003-04 membership year. This represents an 80.3 percent increase in members reporting unemployment over the 2002 survey. Dr. Laura Langbein, a professor of public affairs at The American University in Washington, D.C., analyzed and reported the results, which are posted at www.ieeeusa.org/careers/pdf/EmploymentSurvey2004Report.pdf.

Other findings reveal that 37 percent of the 988 respondents said they considered leaving engineering entirely, and 41 percent said they would not recommend the profession to their children.

“Another trend is that employers are providing much less service for laid-off workers than they did before,” Langbein wrote. “Severance was provided in only 54 percent of the cases (compared with 90 percent in 2002) and extended benefits in only 27 percent of the cases (compared with 48 percent in 2002).”

IEEE-USA is an organizational unit of the IEEE. It was created in 1973 to advance the public good and promote the careers and public policy interests of the more than 220,000 technology professionals who are U.S. members of the IEEE. The IEEE is the world's largest technical professional society. For more information, go to www.ieeeusa.org.

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