Outsourcing: Is It Good or Bad?

Only available on StudyMode
  • Download(s) : 315
  • Published : November 13, 2008
Open Document
Text Preview
Sending jobs to lower wage countries, known as offshore outsourcing, is becoming a more popular practice amongst U.S. companies seeking for ways to cut back on operating costs. The idea of outsourcing has become highly emotional because of two dramatically different effects: it leads to layoffs and dislocations for thousands of workers, although most economists say it will strengthen the U.S. economy. Well-educated workers overseas are willing to work for one-tenth of the wages paid to Americans, resulting in companies saving anywhere from 30 to 70% in costs (Council on Foreign Relations, 2004). If people against outsourcing succeed in shutting it down, the consequences could be disastrous, both for the economy and the workers they are trying to defend. The outsourcing of U.S. jobs overseas is part of an economic movement that promises a better life both for Americans and people in developing countries. Since international trade includes moving resources for relative advantage, the wonder of international outsourcing is not new. The U.S. imports goods that would cost higher to produce domestically, and it creates and sells to other countries goods that would cost more for them to create on their own. The immediate consequence resulting from outsourcing jobs is workers in the U.S. can do become unemployed. The problem that causes a debate over outsourcing is even though it promises a better life for all involved; it causes hardships on the American workers when they are laid off. Economists argue that outsourcing is a bad choice because of the workers that are being laid off and displaced. Outsourcing affects lower skilled jobs that include but are not limited to, customer service representatives, telemarketing, document management, medical transcription, tax preparation and financial services (D. Drezner, 2004). Any jobs that require little supervision or perform routine tasks are the most vulnerable to being outsourced. For example, 20 years ago computer...
tracking img