Outsourcing Argumentative Analysis

When someone thinks of decreasing job availability in the U.S. it is more than often they focus on outsourcing and off-shoring of U.S. jobs. My motivation as a possible future job seeker in IT or retail is analyzing the prevailing topic of outsourcing and off-shoring manufacturing jobs from the U.S. and to answer, the possibility of retrieving and keeping jobs in the U.S. to decrease the number of those unemployed in retail and IT. In Omid Nodoushani’s and Joseph McKnight’s article, “Insourcing Strategy: A Response to Outsourcing and Off-Shoring on the United States” the authors advocate the implementation of the insourcing strategy within retail and IT industries which counters outsourcing and off-shoring by seeking to keep jobs and manufacturing
in the United States. Focusing on Wal-Mart and Dell Inc. as examples of retail and IT industries that use outsourcing and offshoring, Nodoushani and McKnight explain some of the advantages and drawbacks of industries using the cost cutting methods. Retail Company Wal-Mart is known for their production of goods at low prices, but only due to outsource manufacturing to China (Nodoushani and McKnight 164). Economists are unsure if Wal-Mart’s outsourcing is damaging or supporting the U.S economy because Wal-Mart also has a history striving to purchase as much as they can from U.S. suppliers. Additionally, Dell Inc. had taken a risk to cut costs of manufacturing by possibly sacrificing its customer contact and customer relationships due to moving its general workload overseas (164). Both Dell Inc. and Wal-Mart are major industries in manufacturing and they will have a large effect on the U.S. economy either by continuing outsourcing and off-shoring or to begin insourcing. The authors move from their examples of industries in the U.S. that outsource and off-shore jobs into the strategy of insourcing and how insourcing affects an industries choice to keep jobs in the U.S. According to Nodoushani and McKnight, industries should consider insourcing as there is a growing quality of American manufacturing, smaller cost of American manufacturing and a growing cost in income expectation in the outsourced and off-shored locations like India and China due to their growing quality of living (165). The authors acknowledge the conflicting point that while there are increasing reasons to insource, a company must also take into consideration the decision drawbacks of reversing outsourcing and off-shoring as outsourcing returns a simple function like research back to the company, but reversing off-shoring requires the movement back of physical assets (Nodoushani and McKnight 166). The ultimate decision for companies to decide whether to insource or outsource and off-shore is if the increasing cost of outsourcing consistently outweighs their benefits of outsourcing. Nodoushani and McKnight end their support by including the feasibility of the insourcing strategy by providing a legal view and labor union agreement.
The authors discuss that there is no legal, valid ban on outsourcing as federal powers more than likely value the stakeholder’s interests and the freedom to act to support the U.S. (Nodoushani and McKnight 166). In addition to the legal view of outsourcing, legislation has been pushed by major cities like New York and Washington to promote industries to keep jobs in the U.S. through denying tax breaks, loss of tax incentives and repayment and cessation of subsidies (165). The authors provide information of more flexible unions and industries working together to create pay and productivity benefitting both the industry and worker. Therefore, the authors argue that in response to the support of government for insourcing industries, the retail and IT industries able to notice the better quality of American manufacturing and flexible unions are making the decision to insource easier (Nodoushani and McKnight 167-168). Legally outsourcing is allowed, but legislations are being passed to influence industries to insource and even though bringing back jobs from overseas can be difficult for industries, but the relations with labor unions allows for an easier movement back toward equilibrium of the demand and supply for jobs in retail and IT
industries. Omid Nodoushani’s and Joseph McKnight’s article “Insourcing Strategy: A Response to Outsourcing and Off-Shoring on the United States” argues that outsourcing and off-shoring are used by major industries in the U.S. to cut costs of labor and production and the effects to the economy derive from unemployment due to the decrease of available jobs. The insourcing strategy looks to return the outsourced and off-shore jobs back into the U.S. and supports protecting jobs that one day can be outsourced. Feasibility of insourcing is possible as the benefits of keeping labor and manufacturing domestic outweighs the benefits of outsourcing and off-shoring. The American economy can improve as industries stop relying on foreign labor and manufacturing to decrease the number of unemployed in IT and retail industries as well as work with labor unions to create jobs with wages beneficial to both the employee and employer.