Susceptibility of Offshoring and Michigan Jobs

by Eric Stokan 12. November 2009 05:01

Our last post made reference to the Bureau of Labor Statistics report on “off shoring.”  This has certainly been a hot topic as we see jobs go overseas because of globalization.  However the Bureau of Labor Statistics report also shows certain types of jobs are more susceptible to being offshored.  In this entry, we first analyze the relationship between these jobs and average salaries.  Then, relying on data from Michigan’s Labor Market Information site, we look at how concentrated Michigan is in each of these occupations and where we are headed.  This will give us a sense of how well positioned we are as more jobs continue to go overseas.

Comparing susceptibility of service jobs moving overseas and the average annual wage of those jobs, results in somewhat positive news about these potential job losses.  There is a moderately strong (-.465), and very significant (<.001) negative correlation between mean annual wages and the BLS susceptibility score.  This implies that the jobs most likely to be sent overseas, according to BLS, are not the highest paying jobs.  Jobs with low susceptibility scores tend to be higher paid, on average.   The Susceptibility Score was measured by BLS by sending a survey to 160 economists who were to rate jobs by these four categories on a 1-4 scale (with 4 being highest): inputs and outputs that can travel easily across long distances, such as electronically over the Internet; work that requires little interaction with other types of workers; work that requires little knowledge of the social or cultural idiosyn­crasies of the target market; and work that is routine in nature.  Those scoring at higher levels are thought to be more susceptible to offshoring (4-16 scale). 

Top 10 Highest Paid

Top 10 Lowest Paid
Occupation Average Salary Susceptibility Occupation Average Salary Susceptibility

Chief Executives

$151,370

6

Telemarketer

$24,430

15

Lawyers

$118,280

10

Switchboard operator

$24,460

14

Engineering managers

$115,610

5

Data entry keyer

$26,350

16

CIS Managers

$113,880

6

Dietetic Tech

$26,680

10

Marketing Managers

$113,400

5

Pharmacy Tech

$27,560

16

Natural Science Managers

$113,170

5

Interviewer

$28,190

12

Sales Managers

$106,790

5

Order Clerk

$28,510

11

Financial Managers

$106,200

7

Craft Artist

$30,110

9

General Managers

$103,780

6

New-accounts clerk

$30,450

12

CIS, Research

$100,640

10

Parts Sales

$30,600

16

Source: Bureau of Labor Statistics 

Utilizing Michigan’s Labor Market Information data, we were interested in matching up Michigan’s anticipated change in occupation between 2006 and 2016 and comparing that to the BLS susceptibility score.  This gives us a proxy for how likely Michigan’s industries will be hit by potential offshoring.  If this relationship was positive, then we would understand that many of the future jobs we anticipate having are at great risk for being lost. 

In fact, there is again a moderately negative (-.349) and significant (<.001) correlation between the direction Michigan appears to be heading in terms of jobs and the susceptibility of those jobs to being at risk of moving overseas.  This may be due to the fact that Michigan’s predictions take into account the Bureau of Labor Statistics data. Therefore, it will be more interesting to see wages of those jobs that are likely to have the largest decline in Michigan. 

Top 10 Jobs Most Likely Lost in Michigan by Susceptibility (2006-2016)

Occupation Average Salary Susceptibility

Telephone Operators

$32,690

16

Computer Operators

$36,080

16

New-accounts Clerks

$28,510

11

Telemarketers

$30,450

12

Word Processors and Typists

$24,430

15

Switchboard Operators

$31,580

16

Credit Authorizers

$24,460

14

Data Entry Keyers

$31,200

13

Tax Preparers

$26,350

16

Computer Programmers

$34,890

15

Source: Michigan Labor Market Information (% decrease in jobs), Bureau of Labor Statistics (Susceptibility score)

If we examine jobs for which susceptibility scores have been calculated what we see is that the top 10 jobs most likely to be lost in Michigan are relatively low paying and highly susceptible to being transferred overseas, according to Michigan Labor Market Information.  The average salary and of these 10 jobs is $33,877; whereas, the average salary of all the jobs listed by the Bureau of Labor Statistics is $62,299.  This difference of $28,422 is positive for Michigan.

So what are the jobs that are expected to come to Michigan by 2016? Interestingly, according to Michigan Labor Market Information, those jobs that are expected to be the most likely to come here (largest % increase from 2006-2016), are expected to yield an average salary of $65,870.  This salary exceeds the average nationally of those likely to be sent overseas ($62,299).  Assuming this picture is accurate, it could mean that there will be an increase of higher paying jobs and a decrease of lower paying jobs in Michigan which would equate to a Michigan with more higher-skilled jobs.   

 

Top 10 Jobs Most Likely to be gained in Michigan by Susceptibility (2006-2016)

Occupation Average Salary Susceptibility

Postsecondary Teachers

$66,211

9

Network System Analysts

$70,760

13

Computer Software Engineers

$85,660

12

Personal Financial Advisors

$89,220

13

Pharmacy Technicians

$27,560

9

Biomedical Engineers

$79,610

16

Customer Service Representatives

$31,040

9

Database Administrators

$70,260

10

Paralegal and Legal Assistants

$47,600

9

Computer Software Engineer

$90,780

8

Source: Michigan Labor Market Information (% decrease in jobs), Bureau of Labor Statistics (Susceptibility score) 

 

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About the Authors

We are the Center for Urban Studies Economic Development Unit.  We have several authors who contribute directly and indirectly to this blog.

Lyke Thompson, Ph.D.

Director of the Center for Urban Studies and Professor in Wayne State University's Political Science Department, has specialized his research on the urban political and economic environment.  A primary focus has been centered on municipal economic development, urban policy, and the determinants of economic growth.

Eric Stokan, MA.

Research assistant at the Center for Urban Studies Economic Development Unit.  Mr. Stokan serves as the lead researcher of the Unit, analyzing economic data using various statistical techniques.  Mr. Stokan is interested in questions concerning municipal economic growth and industry mix as well as determinants of local economic incentive adoption.

Mary Hennessey

Research technician at the Center for Urban Studies Economic Development Unit.  Ms. Hennessey researches the effectiveness of local economic development incentives.  Specifically, she has conducted a thorough investigation of brownfields and is currently working on public transit.