For the past two decades Americans have been getting laid off because their jobs are being transferred offshore. “Advances in technology and low-cost telecommunications now mean that a computer programmer, data entry specialist, or help-desk operator answering calls for a U.S. company can work as easily from India or the Philippines as from Iowa--and save parent companies some 30 percent to 70 percent in costs” (Otterman, 2004). This poses the question should the government protect American jobs by imposing stiff penalties on companies that transfer jobs offshore by outsourcing or manufacturing. No, stiffer taxes are not going to significantly effect the number of jobs that are being transferred off shore due to outsourcing. Instead the United States government needs to lower the average tax rate on multinational corporations and fix the loopholes that are currently being used to avoid paying these corporate taxes.
For years American companies have been scrutinized for outsourcing their jobs by off shoring. Even though this has been going on for the past twenty or more years it is being brought to light even more now since our country is in a recession. There are many reasons companies choose to outsource off shore. One of the main reasons is cost savings, many developing countries are more affordable for American companies to operate in because an employee that may cost $50 and hour in America might only cost about $5 an hour in a developing country. Companies are not just off shoring for cost benefits but also for the fact that many other countries have many educated and highly skilled workers who can perform jobs that are needed overseas. Business can also operate 24 hours a day 7 days a week by taking advantage of the offshore workers. When it is 6 p.m. in New York it is 6 a.m. in Singapore. Americans want that 24 hours a day 7 days a week customer service when they are having problems with things like their computer. Outsourcing offshore also makes it a lot easier for companies to sell goods and services in a global market when they are producing them there and can reach their customers more quickly and effectively. Technological possibilities are another reason companies are choosing to offshore American jobs. Since many service jobs do not require face-to-face interaction they are able to perform these jobs from wherever is needed (Popwell, 2010).
Many argue that the government should protect American jobs by imposing stiff penalties on companies that transfer jobs offshore by outsourcing or manufacturing. They claim off shoring has laid off thousands of American workers who will not be able to find other work unless they learn new skills. They also claim that off shoring is a major contributor to the United States 9 percent unemployment rate (United States Department of Labor, 2011). But they are only supporting their claims by the fact that they think companies are only off shoring for cost incentives. Where as stated before there are many other reasons companies outsource offshore and many ways to make up for the job losses.
Those who oppse the government protecting American jobs with stiff penalties for off shoring recognise that yes, cost savings is a big incentive for a company to outsource off shore, but there are also many more reasons that comapanies should opperate on a global scale that out weigh the loss of jobs in America. “Thea Lee, policy director for the AFL-CIO, says much of the economic data supporting the link between overseas investment and domestic job growth fails to distinguish between foreign investment used to serve market demand for U.S. goods and services and foreign investment used to buy cheaper labor abroad” (Wolverson, 2011). So when looking at the total number of American jobs that have been outsourced off shore we also have to stop and think about how many of them were for market demand to better serve us and how many of them really...