Widely cited figures predict that by 2015, roughly 3.3 million US business-processing jobs will have moved abroad.1 As of July 2003, around 400,000 jobs already had. Other research suggests that the number of US service jobs lost to offshoring will accelerate at a rate of 30 to 40 percent annually during the next five years.2 Vast wage differentials are prompting companies to move their labor-intensive service jobs to countries with low labor costs: for instance, software developers, who cost $60 an hour in the United States, the world's biggest offshorer, cost only $6 an hour in India, the biggest market for offshored services (see Vivek Agrawal, Diana Farrell, and Jaana K. Remes, "Offshoring and beyond," The McKinsey Quarterly, 2003 Number 4 Global directions, pp. 24–35).
Such projections have caused alarm in the United States. In February 2003, the cover of Business Week asked, "Is your job next?" In June, the US House of Representatives' Committee on Small Business held a hearing on "The globalization of white-collar jobs: Can America lose these jobs and still prosper?" Several US states are considering legislation to prohibit or severely restrict their state governments from contracting with companies that...