How Outsourcing Is Affecting America’s Economy and Future College Graduates
How Outsourcing Is Affecting America’s Economy And Future College Graduates
11/26/12
Macro-Economics Group Project
By: Jessica Klein
How Outsourcing Is Affecting America’s Economy And Future College Graduates
Introduction
Recently, there have been many debates over the important issue on how companies and governments in the past decades have been increasingly sourcing a wide range of tasks to offshore sites. A group member of ours is an overseas buyer for his company. He is fortunate enough to experience what that is like firsthand. As a buyer, he is required to travel to different countries where large labor and talent pools are available at lower costs to try to procure goods and services at the lowest price, in order to help his company reach higher profits. Many Americans believe that outsourcing is one of the main reasons that the unemployment rate has been increasing in the United States, so they complain and publicly criticize the companies and governments who outsource jobs abroad. Also many U.S. workers (from white- collar well educated individuals to semi-skilled workers) have become more concerned about the security of their jobs due to increasing global economic integration since the early 2000s.
In many circumstances a product can be made here in the United States by a worker making fifteen dollars an hour plus benefits; or companies can find the same product somewhere else made where a worker is paid four dollars an hour, with no benefits. Which one would be more of a logical move? After all, it is the bottom line companies are chasing here. Why wouldn’t companies want to take jobs overseas? Which leads us to what outsourcing really does to the U.S. economy. Is it really hurting the economy? If so, why are so many companies considering offshore outsourcing to be beneficial? What should we as students do to prepare for the future if outsourcing continues to grow? Below will contain an analysis of the advantages, and
11/26/12
Macro-Economics Group Project
By: Jessica Klein
How Outsourcing Is Affecting America’s Economy And Future College Graduates
Introduction
Recently, there have been many debates over the important issue on how companies and governments in the past decades have been increasingly sourcing a wide range of tasks to offshore sites. A group member of ours is an overseas buyer for his company. He is fortunate enough to experience what that is like firsthand. As a buyer, he is required to travel to different countries where large labor and talent pools are available at lower costs to try to procure goods and services at the lowest price, in order to help his company reach higher profits. Many Americans believe that outsourcing is one of the main reasons that the unemployment rate has been increasing in the United States, so they complain and publicly criticize the companies and governments who outsource jobs abroad. Also many U.S. workers (from white- collar well educated individuals to semi-skilled workers) have become more concerned about the security of their jobs due to increasing global economic integration since the early 2000s.
In many circumstances a product can be made here in the United States by a worker making fifteen dollars an hour plus benefits; or companies can find the same product somewhere else made where a worker is paid four dollars an hour, with no benefits. Which one would be more of a logical move? After all, it is the bottom line companies are chasing here. Why wouldn’t companies want to take jobs overseas? Which leads us to what outsourcing really does to the U.S. economy. Is it really hurting the economy? If so, why are so many companies considering offshore outsourcing to be beneficial? What should we as students do to prepare for the future if outsourcing continues to grow? Below will contain an analysis of the advantages, and
References: Amiti, Mary, and Shang-Jin Wei, 2005. “Fear of Service Outsourcing: Is it Justified?” Economic Policy, April, pp. 308-348.Print Amiti, Mary, and Shang-Jin Wei, 2006 U.S. Department of Labor, Bureau of Labor Statistics Retrieved July 28, 2012 http://www.bls.gov/news.release/pdf/cewbd.pdf.