Benefits of Outsourcing

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December 7th, 2012
Benefits of Outsourcing

In recent years overseas manufacturing has become a topic of debate. In the age of globalization many Unites States based companies have decided to relocate their manufacturing to other countries. According to the U.S Census Bureau we have imported over $364,943.90 (in millions) from China alone in the year 2010. The controversy has even played a part in the upcoming presidential election. A June 2011 republican debate that aired on CNN even asked candidates how they intended to bring manufacturing back to the United States. When looking at face value, relocating jobs overseas seems to be “un-American”; yet there have been many myths and misconceptions behind this controversial issue.

Global trade has entered a new stage after World War II. Countries sell their goods, labor, and raw materials across the global market. Through the removal of tariff barriers the United States has become the strongest economic power. The North American Free Trade Agreement (NAFTA) and the General Agreement on Tariffs and Trade (GATT) has allowed U.S based companies to start offshoring. “Offshoring is the act in which companies move production to another country, producing the same goods, the same way, but at lower costs and taxes.”

One argument made against moving production to other countries is that it takes away jobs from Americans. However, a survey done by the Bureau of Labor Statistics shows this isn’t the case. The survey shows that most layoffs were mostly for domestic reasons; the largest being contract completion which accounted for twenty-five percent of layoffs. Furthermore the survey illustrates that only four percent of jobs are lost in the United States as a direct result of outsourcing. It is true that some jobs are lost as result of outsourcing. However, most people are unaware that American companies tend to create new jobs specific for overseas workers. These are jobs that companies would deem as too...
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