"Is your job headed to India?" Offshore outsourcing - where companies often get the same work done for a fraction of labor's cost here in the U.S. - continues to be a growing trend. But how accurate are the doom-and-gloom predictions about the eventual evisceration of the American job market?

Because offshoring is such a political hot potato, with every imaginable constituency and special interest group rolling out conflicting statistics to score points in debates about globalization, free trade, and protectionism, it's difficult to focus on the ultimate question: is your job in danger? Certainly some concern is justified. After all, a generation of Americans has watched our manufacturing base erode in the wake of cheaper foreign competition It's fair to wonder if the ultimate location of the computer on which a knowledge job is done really matters. We're all connected by broadband, so why not park the PC in the place with the cheapest labor? We've lost our factory jobs, so are we now going to lose our knowledge jobs? Is America eventually destined to become a nation of soybean farmers supplying tofu to China?

Probably not. As you debate these issues with your friends and co-workers, here are some facts you may want to toss into the discussion:

Yes, Offshore Outsourcing is Growing

International consulting firm McKinsey estimates the market for offshoring of  business processes (of all kinds) will rise from $35 billion in 2002 to over $100 billion in 2008. The size of the total business processing market: about $3 trillion.

And IT, in All its Forms, is the Number One Outsourced Service

A recent PricewaterhouseCoopers survey - of 226 of its customers and 66 outsourcing service providers - found that IT is the most frequently outsourced corporate function, and more companies want to do it. A total of 57 percent said they are outsourcing IT services now, and 55 percent said they plan to do more of it. In a February 2007 report, the Brookings Institution said at least 17 percent of computer programming, software engineering, and data entry jobs in certain metropolitan areas could go offshore by 2015.

Offshoring Has Caused Only Blips in Employment Numbers So Far

An April 2007 study from the non-partisan Peterson Institute for International Economics threw some cold water on the offshoring panic. Author Jacob Funk Kirkegaard pulled in numbers from every direction and determined that few American layoffs (in both manufacturing and services) in 2004 and 2005 were actually attributable to offshoring. Of 1 million people laid off, Kirkegaard said, 25 percent were let go due to "contract completion," while 26 percent departed because of downsizing or financial difficulties. He found that only 12 percent of layoffs could be attributed to "movement of work," and two-thirds of that movement was domestic. He summed up his findings by saying, "One cannot escape the conclusion that the heated public and political debate on the issue has been vastly overblown, at least in the United States, and that direct employment impacts are very limited."

In Fact, Domestic Job Churn is Enormous

Always keep in mind that the American job market is much more tumultuous than you may realize. According to the Bureau of Labor Statistics, in the third quarter of 2006 U.S. businesses created 7,364,000 jobs and eliminated 7,345,000 jobs - for an overall gain of 19,000 jobs. Obviously, there's a lot more to talk about behind those huge numbers than offshoring alone.

All Knowledge Jobs Aren't Equal

You work on a computer and a phone. So does a customer support assistant and a mortgage refinancing salesman. It's important to remember that the IT jobs most likely to go offshore are the back-office, data-entry and phone-sales types of positions that don't require the years of expertise you've developed as a programmer, engineer or other professional-level IT expert. Yes, there are plenty of newly minted Indian engineering and computer science graduates out there, but not nearly enough to have a huge impact on the American IT job market. At least not yet.

India Won't Always be Cheap

India needs its own IT experts. The International Labor Organization has found that as the developing world continues to develop and the worldwide demand for engineering, programming, and IT services increases, so will the wages of all those Indian graduates. As that happens, offshoring is destined to lose some of its financial advantages. Currency fluctuations, always scary for international businesspeople, can have a major impact on the bottom-line benefits of offshoring as well. 

Successful Offshoring is Harder Than it Looks

Even if, as Jacob Funk Kirkegaard estimated, 20 percent of all American jobs could theoretically be moved abroad, that doesn't mean they will be. Offshoring can be hard to do, and doing it right means pursuing it slowly and deliberately. Consulting firm A.T. Kearney surveyed IT leaders at 42 Fortune 200 companies in May 2007 and came up with the following complaints (among others) about offshoring:

• Internal resistance to change (90 percent of respondents)
• Cross-border differences of culture and language (80 percent)
• Lack of skills offshore (49 percent)
• Customer complaints (49 percent)
• Political, media, or public backlash (20 percent)

Companies investigating the pros and cons of offshoring clearly fear loss of quality control, service disruptions, communications issues and management challenges. On top of that, note that half the respondents see a lack of skills overseas. All of this means your expert skills and reliability continue to look good to employers, even those who deep-down would love to find an Indian version of you willing to work for 25 percent of your salary.