By Robert Gavin
Boston Globe Staff
July 26, 2004

Brian Fletcher managed to hold onto a job at AT&T Corp. through the breakup of the company's telephone monopoly, battles with competitors, and regulatory and technological changes that have reshaped the telecommunications industry in the last two decades.

During 21 years with Ma Bell, he shifted from renting phones to selling consumer products to marketing long-distance services. But now, with AT&T giving up its consumer brands to focus exclusively on business customers, Fletcher, 44, worries that his and hundreds of other jobs in AT&T's St. Louis call center will move overseas for cheaper labor as the company restructures.

''This is the first time I feel my job is in jeopardy," said Fletcher, a Missouri delegate to the Democratic National Convention and an official in the Communications Workers of America's local in St. Louis. ''There's really no place left in the company to transfer to."

While AT&T said it doesn't plan to move US jobs overseas, Fletcher's worries show that outsourcing is likely to remain a potent issue in the presidential campaign, and an issue that is felt personally by some of the delegates in town this week.

Despite evidence that the nation is heading into an expansion, and studies that show that relatively few jobs are going overseas, workers from factory laborers to software engineers remain uneasy about their futures as globalization and technology reshape the economy.

These anxieties, political and economic analysts say, help explain why President Bush's approval ratings have lagged, even though the nation has enjoyed 10 consecutive months of employment growth and added more than 1 million jobs since March. Democrats, including their presumptive nominee, Senator John F. Kerry of Massachusetts, have tried to capitalize on this anxiety, blasting the president's economic policies as creating too few jobs, and doing little to improve the economic security of middle-class Americans.

During the primaries, Kerry branded US firms that send jobs overseas as ''Benedict Arnold" companies and criticized tax policies he says provide incentives for them to do so. His running mate, North Carolina Senator John Edwards, vaulted to national prominence by charging Bush with doing too little to protect US jobs.

The president, however, has criticized his challengers for favoring protectionist policies that will raise prices for US consumers and businesses and harm the economy. He says his tax and free trade policies will create strong economic growth, more jobs, and greater prosperity.

In the long term, many economists say, free trade -- including outsourcing -- produces these benefits by promoting the kind of competition that lowers costs and sparks innovation and ultimately leads to new products and jobs. A study for the Information Technology Association of America by Global Insight, a Waltham economics consulting firm, found that the benefits from outsourcing would create more than 300,000 net new jobs by 2008.

Nariman Behravesh, Global Insight's chief economist, noted that similar anxieties dominated the political debate in the 1980s, when many Americans feared the best jobs were heading to Japan. Instead, new technologies were developed, sparking the '90s boom.

''It means lower prices for goods, lower inflation, better profit margins, and in the end, higher wages."

Economists say that only a small portion -- perhaps 2 to 3 percent -- of the 2.7 million jobs lost in the recent downturn can be attributed to outsourcing. They say a far greater proportion of the job losses are due to technology-driven gains in productivity, which allow companies to expand output without adding workers.

Still, many US companies have boosted productivity, and slashed payrolls, to meet foreign competition. Also, political and economic analysts say, it's no comfort to laid-off workers that they've lost jobs to productivity rather than outsourcing.

Laurens County, S.C., is only beginning to rebound from the disappearance of its textile industry, said Lumus Byrd, 62, a retired business owner, and a South Carolina delegate to the Democratic Convention. Over the past few years, Byrd said, three mills have shut down, throwing hundreds out of work and contributing to an unemployment rate that peaked during the recent recession at more than 10 percent.

''Many believed in their hearts that textiles would always be here," said Byrd, ''and many have had to take jobs that pay lesser money."

The county, however, has begun to diversify, with plastics maker Sterilite Corp. of Townsend, Mass., opening a plant in Clinton, S.C. Initially, the company is hiring about 200 workers. Byrd said that some 1,500 applied.

Whether the cause is productivity or outsourcing, many of the jobs lost in the last recession will never come back, said John Silvia, chief economist at Wachovia Corp. in Charlotte, N.C. The days when workers are laid off by their company in a downturn, and recalled when the economy rebounds are gone, Silvia said. Instead, workers often have to find jobs in new industries.

Consequently, Silvia said, public policy must extend beyond monetary and tax measures designed to stimulate the economy, and include training and education to help, for example, factory workers become nurses.

''You're not going to restore a lot of these jobs, they're gone," said Silvia. ''The response can't be the same as in the '60s and '70s."

Silvia and other economists concede these can be wrenching transitions, and often mean, at least initially, pay cuts. This, of course, adds to worker anxiety.

''They used to say, get your foot in the door at the phone company and you have a job for life," said Fletcher, the AT&T worker and union official in St. Louis. ''Very few people feel comfortable that they are going to retire and live as comfortably as our parents."

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