New Data Confirms Trend of Outsourcing Jobs Outside of US with Offshoring Affects Unemployment

Adding to the debate over whether globalization negatively affects the U.S. economy, new data from the U.S. Commerce Department shows that multinational corporations in the United States – familiar big brand-name companies which employ nearly 20 percent of all American workers – reduced their domestic workforce by 2.9 million jobs during the last decade while at the same time increasing their overseas workforce by 2.4 million jobs, the Wall Street Journal reports in the article ‘Big U.S. Firms Shift Hiring Abroad.’

A crucial part of the country’s economy, U.S. multinational companies employed 21.1 million people in the United States in 2009 and 10.3 million outside of the country, and also accounted for 23 percent of the country’s private-sector output. According to the Wall Street Journal, this current trend of “offshoring” – outsourcing jobs overseas and outside of the United States – reveals the growing importance of foreign countries and the “vulnerability” of the U.S. economy when unemployment remains high.

The current trend of offshoring is a noticeable change from the decade of 1990s when U.S. multinationals added 4.4 million jobs in the U.S. along with 2.7 million jobs abroad, WSJ reports, and since U.S. multinationals are more exposed to global trends, the actions of these companies often foretell the direction where the economy is headed. However, some companies are bucking the offshoring trend of outsourcing overseas and outside of the U.S. by keeping jobs, and personal information, stateside.

Employment Screening Resources (ESR) – a San Francisco Bay-area background check provider accredited by The National Association of Professional Background Screeners (NAPBS®) – does not outsource sensitive data to countries outside the United States and beyond the reach of U.S. laws. For reasons of privacy and quality control, ESR performs work involving Personally Identifiable Information (PII) of consumers – names, birth dates, addresses, Social Security numbers, and financial data – in the U.S.

In September 2010, former Governor Arnold Schwarzenegger signed into law California Senate Bill 909 (S.B. 909) which appears to be the first law in the United States to regulate the offshoring of the PII of U.S. consumers collected for background checks. S.B. 909 amends the California Investigative Consumer Reporting Agencies Act (ICRA) that regulates background checks in California and requires that a consumer must be notified as part of a disclosure before the background check of the web address for “information about the investigative reporting agency’s privacy practices, including whether the consumer’s personal information will be sent outside the United States or its territories.”

In addition, S.B. 909 – which takes effect January 1, 2012 – also requires the following:

  • A background check company’s privacy policy must contain “information describing its privacy practices with respect to its preparation and processing of investigative consumer reports.”
  • Background check companies in California (and firms that do business in California) must have a statement in their privacy policy entitled “Personal Information Disclosure: United States or Overseas” that indicates whether the personal information will be transferred to third parties outside the United States or its territories through the process of offshoring.
  • “Third parties” including, but not being limited to, a contractor, foreign affiliate, wholly owned entity, or an employee of the investigative consumer reporting agency also require contact information  of the investigative consumer reporting agency representatives who can assist a consumer with additional information regarding the agency’s privacy practices or policies in the event of a compromise of his or her information.
  • In the event a consumer is harmed by virtue of a background check company negligently sending data offshore, SB-909 provides for damages to the consumer.

Employment Screening Resources (ESR) is a member of ConcernedCRAs, a group of Consumer Reporting Agencies (CRAs) that oppose the practice of offshoring the PII of U.S. citizens outside the country to be processed beyond U.S. privacy laws. ESR was also the third U.S. background screening firm to become “Safe Harbor” Certified for data privacy protection.

About Employment Screening Resources (ESR): Founded in 1996 in the San Francisco Bay area with a mission to help employers and employees maintain safe workplaces, Employment Screening Resources (ESR) wrote the book on background checks with ‘The Safe Hiring Manual’ by ESR founder and President Lester Rosen. ESR is Accredited by The National Association of Professional Background Screeners (NAPBS®) and is a Designated E-Verify Employer Agent helping U.S. businesses maintain legal workforces. For more information about Employment Screening Resources, visit or email ESR News Editor Thomas Ahearn at