However, large companies aren’t the only ones guilty of our sourcing. While they may do it on a large scale and take the most jobs away from us in the United States, small companies outsource jobs too. Gene Marks, a writer from Huffington po and a self-proclaimed “outsource-aholic” says, “Outsourcing is a quick high and a way to feel… profitable.” He owns a small business and uses outsourcing for a number of reasons. It may be no secret that sending jobs overseas ensues cheaper production than the goods in the United States, but why? Gene Marks, does it becaus... ... middle of paper ... ...m by taking away jobs from our communities it is supposed to help us in the long run.
Other countries that are suitable to perform the jobs needed may demand less money to finish the jobs. The main purpose of this paper is to explain why businesses should outsource to other countries that can do the work they need at a cheaper cost. Many Americans blame outsourcing for the current unemployment rates, even though the amount of Americans on financial assistance programs that are currently unemployed and are not looking for a job is high. This paper is intended for those that blame outsourcing on the unemployment rates and for American businesses that want to provide quality goods at a reasonable cost for American consumers. This paper will inform the audience on the benefits of why businesses should outsource.
Unfortunately, low labor and environmental-protection costs are a comparative advantage. Economist say that the United States should to take advantage of countries with governments that exploit labor and environment cost, because they offer lower total costs for manufacturing. Although, trade will show increases, but so does our country’s trade deficit as imports rise and exports fall. Factories here close, people here get laid off, wage pressures here increase and overall demand in our economy
The issue on outsourcing jobs is not only jobs being taken away from Americans but its hurting our economy. There are many other smaller issues that are created when jobs are outsourced. Items such as containers that the items are shipped in, it is cheaper to build a new container where the item is being built than it is to ship the empty container back. That creates a smaller issue of having thousands of unused containers lying around. (Winkipeida, 2013) The larger issues with outsourcing are jobs for American’s being shipped overseas and American citizens being left with out jobs.
By sending low skilled jobs overseas, the overall prices of items decline tremendously. Some Americans will be left without a job for a short period, but it is through outsourcing that the global economy becomes most efficient.
While Bernie Sanders disagrees with American outsourcing, I cannot. Sanders’ argument focuses generally on American jobs, claiming that “We have been losing millions of jobs as a direct result of our disastrous trade policies … We must do everything possible to stop companies from outsourcing jobs” (44). While perhaps low-skill manufacturing jobs are gone, macroeconomics proves that the increased economic efficiency outweighs the initial unemployment. The outsourcing of low-skill labor allows national economic focus on high skill labor outputs. This situation allows the for price of exports to go up and keeps the costs of imports low - a favorable condition for the growth of Gross Domestic Product (GDP).
In an effort to compete fairly, production firms left in the developed countries try to reduce their production costs by reducing labor costs and deteriorating work environment conditions, hence resulting to a race to the bottom. Economics have tried to explain this phenomenon, proposing solutions to the controversy. To start with, economic growth differs from nation to nation and thus causing differences in development status. Accordingly, prices differ mostly due to production costs. United States as a nation portrays a clear image of this phenomenon, with the south being less developed as compared to the north.
If we could import fewer items and produce them locally instead, we could reduce the amount of capital that is mo... ... middle of paper ... ...tries where low labor costs give them an advantage over other locations. Because minimum wage is so relatively high in the United States, the costs associated with making things like clothing, electronics, and toys would skyrocket if they were created here. In turn, the price that American consumers pay for them would go up and fewer people would be able to afford them—lowering both the economy and the standard of living for millions of Americans. So what can we do? Buying American-made products would likely help with the immediate recession by creating more jobs.
There are many arguments for and against globalization, some pros and cons include: • Pros of globalization: o Free trade reduces barriers o Promotes global economic growth: creates jobs, and the market becomes more competitive for companies, which lowers prices for consumers. o Information is being shared: technology and becoming culturally aware, companies outsource to each other. • Cons of globalization: o Makes the rich richer and the poor poorer o Large companies can exploit tax havens in other countries o Outsourcing of jobs/exploitation of labor: A major problem for developed countries is that jobs are being lost to lower cost countries. Companies outsource to other countries because it’s cheaper, but they usually ignore safety standards to produce
And the US economy has actully gained from it, in terms of higher productivity. But on the other hand, for many Americans outsourcing posses a real threat. However, in recent years services, which earlier was characterized as non-tradable, are also outsourced. As developed countries, like India and China, are able to offer cheap skilled labour surely there is a great enticement for US firms to move such services abroad, thus shifting jobs abroad. Where will that leave the US and its skilled workers – are they in a sense getting Bangalored?