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Outsourcing and Unemployment

Outsourcing is the transfer of the operational responsibility for certain services to a third party. Jobs in the service industry used to be thought safe, but that is no longer true. With the introduction of new technology and the ability to access information all over the world, companies now have the opportunity to outsource these jobs to other countries.

Outsourcing has occurred in the manufacturing industries for several decades, but it affected only the low-skilled jobs, or blue-collar workers. People did not complain about this outsourcing because they saw the benefits of this type of trade in the form of lower prices for the goods the purchased. Those in the service sector were strong supporters of open trade because they benefited from the cheap goods. People fear that the latest trend of outsourcing service jobs to other countries will take high-paying jobs away from American workers. People are concerned about unemployment rates increasing and wage rates declining.

Thousands of jobs are lost each year in the United States and workers are losing skills and opportunities due to outsourcing. Many displaced workers spent years and money to acquire their current level of skill. What about assembly line workers with jobs requiring little or no training at all? When assembly line workers lose their jobs, there is no place for them. They either remain unemployed or take lower wage jobs, unless they are willing to spend time and money learning new skills. Full-time employment also seems to be becoming a thing of the past.

Industries such as consumer electronics, small appliances, and toys; just to name a few have been lost due to corporations outsourcing to other countries economies. In fact, China and India graduate more than 5 times more engineers than the United States because of the demand of qualified and educated individuals required in positions created by outsourcing overseas.

However, there are some benefits to outsourcing as well. Because of Outsourcing, we get lower prices on the products we purchase. Outsourcing raises the country’s standard of living, and benefits low income people and seniors living on fixed income. Also, some predict, as the population ages (Baby Boomers), there will be fewer workers to fill the jobs, so we’ll need to outsource even more to stay well as a country.

Since there are skilled people in the poor nations, and their daily costs are much lower than ours, we can pay them enough and still economize (Huws 214 - 219). Since we are creating jobs in those countries, they can generate work for many more as the money flows into the national economy and will return dividends through Globalization (Blinder 8 - 13). Through creating jobs in other countries, we are helping to close the gap between the poorest and the richest countries, and bringing security to the world.

When you break it all down there are positives and negatives to outsourcing. It also contributes to the crisis by allowing the loss of capital, and if the government does not do anything about that, it ultimately could contribute to the downfall of the United States as a worldwide capital power. This should serve as an example to the world, that in order to grow as a country the country needs to use the manpower resources first inside their country. Unfortunately some unscrupulous big American anti-American companies work against the United States by sending the jobs overseas cheating the United States of the money that would have been otherwise recycled into the economy.

Works Cited
Blinder, Alan. Will your job be exported. 8 - 13. Print.
Burkholder, Nicholas C. Outsourcing: The Definitive View, Applications and Implications. Hoboken, N.J: Wiley, 2006. Print.
Duncan, Douglas G., and Tiffany G. Rowan. "Outsourcing and the Bottom Line." Mortgage Banking 1 Feb. 1997. Print.
Huws, Ursula. Fixed, Footloose, or Fractured: Work, Identity, and the Spatial Division of Labor in the Twenty–First Century. Monthly Review (2006): 214 - 19. Print.