Effects Of Outsourcing On The Economy

Outsourcing and the U.S. Economy
Outsourcing jobs has been a topic of great debate for the past several years here in the United States. Those who are against outsourcing stated that it would have a negative effect on the U.S. economy because we would lose our competitive advantage to other countries and hundreds of Americans would lose their jobs, which include not only low-skilled workers but also semi-skilled and skilled workers, and in the end this does not leave enough jobs for the American people. American economists and policymakers that have favored outsourcing seem to have been misled because they believed the United States would be successful if we specialized in research and innovation, and let developing countries do the manufacturing.
According to Harvard Professors Willy Shih and Gary Pisano, “for the first time in our history, the U.S. economy has been unable to provide a rising standard of living for the majority of its people". Furthermore, outsourcing manufacturing has devastated the United States’ ability to invent the products and medical advances of the future. Nonetheless, the biggest threat to our future that we face now is the fact that the social wealth created by innovation will go to the outsourced country. In 1980, the United States produced 42 percent of the world’s supply of semiconductors as of today we only produce 14 percent. Moreover, the 8 percent that the U.S. semiconductor firms spent on research and development moved to the outsourced countries. The United States once held the first place as a research and development intensive economy and now we have moved down the ranks to number eight. The National Science Foundation reported that in 2008, $58 billion, one-fifth, of total research and development spending by U.S. firms took place
The countries that currently compose the Eurozone are Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain. In order to join the Eurozone, European Union countries had to qualify by meeting the terms of the 1991 Maastricht Treaty in terms of budget deficits, inflation, interest rates and other monetary requirements. The European Union countries that declined to join the Eurozone are: the United Kingdom, Sweden and Denmark. Monetary policy of the Eurozone is the responsibility of the European Central Bank which is governed by a president and a board of the heads of national central banks. The Eurozone is largest trading area in the world and one point in time challenged the U.S. Dollar for global supremacy, but large deficits and sovereign debt by many of the countries exposed the Eurozone’s vulnerability. Furthermore, the Eurozone’s sovereign debt crisis demonstrated the interdependence of the European Union and also the lack of leadership in order to respond to the problem with a strong fiscal and monetary policy. Germany and France considered the most stable economies called on the weaker countries to embrace strict austerity measures which caused much popular unrest bringing down both the government in Italy and