The warning by a prominent consultancy firm to American companies that they risk extinction if they do not outsource jobs to India is going to stir a political hornet's nest, economists have said.
Boston Consulting Group had asked companies to move to countries like India and China for research and development not only for lower costs but also because of the higher skills and knowledge of their workforce compared to that of America.
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But economists fear the report could help revive "the political clamour for protectionist measures that erupted last year when the media focused public attention on the loss of high-tech jobs to India," the Washington Post reported.
Referring to the authors' "brutal honesty," Catherine L Mann, a fellow at the Institute for International Economics, Washington DC, said: "Maybe because they are from Boston (and not politically sensitive Washington), they don't know what a hornets nest they have stepped into."
But Matthew J Slaughter, a professor at the Tuck School of Business at Dartmouth, New England, pointed out that offshoring can have a positive impact on US job growth, as part of the "churn" in employment that constantly eliminates jobs but also adds them.
Although US multinationals expanded their overseas payrolls by 2.8 million from 1991 to 2001, in moves that often involved factory closures and layoffs in the US, they expanded their US employment levels by nearly 5.5 million, according a study done by Slaughter.
That is because as such firms expand the scale of their operations abroad, they need more personnel at home to handle functions such as marketing, logistics, finance and product design.
"In the 1990's, we were creating and destroying tens of millions of jobs each year," Slaughter said, "and that context is a little forgotten when people say '3 million jobs will be destroyed over 10 years."
Harold L Sirkin, one of the chief authors of the Boston Consulting report, agreed that it should not be interpreted as bad news overall for US living standards.
"This is the same thing as we had when people were worried about how the Japanese were going to take over the world, or the Mexicans were going to take all the US jobs how many times have we heard that refrain?" Sirkin asked.
"This is an economy that has proven time after time to be incredibly resilient and capable of adjusting."
Offshore production, he said, will mean that American companies lower their costs and raise their productivity, and although some jobs will be lost in the process, pouring the surplus money and workers into new industries "means you will create jobs you would not have otherwise."
"Trying to fight the trend, and preserve jobs by making it difficult for firms to lay off workers," he warned, "means you become a zero growth economy," with fewer jobs in the long run."