Outsourcing of American Jobs Hurts The United States Economy

Topics: United States, Tax, Barack Obama Pages: 10 (3404 words) Published: November 22, 2013

Management
14 November 2013
Outsourcing of American Jobs Hurts the United States Economy Introduction:
Over the past few decades the United States has increased its use of outsourcing as a means to positively impact the economy, due to the apparent economic benefit this action has on the bottom-line for companies. In general, outsourcing is the movement of business operations and process to any location based outside the home country. The practice of outsourcing was introduced due to the perceived notion that it positively impacts the economy, saves money for companies, opens up opportunities for greater entrepreneurship, reduces regulations tied to company operations and leads to more Americans holding higher level jobs. However, one may also derive that the outsourcing of American jobs to foreign countries and workers has an immediate impact on the United States economy, which costs thousands of American jobs and negatively impacts the economy. The thesis statement of this paper is that the United States Government should take action now to protect its citizens by halting the outsourcing of American jobs. Outsourcing and the U.S.

As a strong capitalistic venture, outsourcing was aggressively introduced in the United States in the 1980s. In many situations outsourcing not only goes to a different country, but to a different continent. Furthermore, the process of outsourcing can be carried out through a third-party service, which in most cases is also located in an offshore country or managed through setting up a wholly owned subsidiary in an offshore location (Oshri 27-28). Therefore, outsourcing does not only move operations and process out of the country, but the United States has accepted the outsourcing of customer service, administration and information technology.

Since its introduction, outsourcing has been a fierce subject of debate between economists, manufactures and politicians alike. While it was the United States’ promotion of capitalism that promoted the onset of outsourcing, it is now the very same topic that Americans feel is endangering the nation’s economic development. During the most recent Presidential elections, the topic of outsourcing has been discussed as a high priority. Specifically, during the 2012 Presidential election campaign President Barack Obama and Governor Mitt Romney, agreed that outsourcing was unpatriotic, but they had varying views when it came to the subject (Binswanger). The candidates focused on the fact that for over fifteen years, multinational companies in the United States have taken advantage of lower trade barriers to shift production and jobs to lower wage countries. During the campaign, President Obama proposed giving tax breaks to American manufacturers that would bring back jobs from overseas or produce products domestically. He also was a proponent for companies having to pay more taxes on their overseas earning. Currently, companies doing business overseas do not pay taxes on overseas profits unless they bring the earnings back to the United States. Obama continues to argues that the availability to pay no taxes encourages outsourcing, while Republicans argue that Obama’s plan would raise taxes and encourage American companies to move their headquarters overseas. Throughout the 2012 campaign, Governor Romney proposed cutting corporate taxes and reducing regulations to make the United States a more attractive place to do business, in contrast to Obama’s approach (Rugaber). Although this action would encourage domestic production, it overlooks the main issue of positively impacting the economy. Taxes are the basic foundation of our nation’s economy and if they are cut our economy still struggles. Even before the 2012 Presidential election campaign, the debate over the benefits and disadvantages of outsourcing were brought to a public poll by Zogby International, in 2004. This poll revealed that 71% of Americans believed outsourcing...

Cited: Bardhan, Ashok, Dwight Jafee and Cynthia Kroll. Globalization and a High Tech Economy. Springer, 2004. Print.
Coontz, George. “Opinion: The Benefits and Costs of Outsourcing Jobs.” The Park Place Economist: Vol. 12. 2008. Web. 9 November 2013.
“Detroit Bankruptcy.” Wikipedia: The Free Encyclopedia
Oshri, Ilan. Offshoring Strategies: Evolving Captive Center Models. Cambridge; The MIT Press, 2011. Print.
Pirraglia, William
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