If the US closes off borders to foreign trade, manufacturing companies would feel a financial strain, causing potential job loss. Manufacturing companies in the US rely on profits from selling products in foreign markets and on many foreign goods to assemble those products. If businesses are not able to import their needed materials, then they would not be able to produce the products, both wanted and needed by both Americans and foreign buyers. Job loss would be inevitable and lead to many of the same problems seen today but on a grander scale. Job loss, homes in foreclosure, and the people who still have jobs would be living from paycheck to paycheck.
Because the firms ¡°cut back and produce less¡± when they experience recessions, they will employ fewer workers. Therefore, the unemployment rate rises. This increase in unemployment caused by recessions and depressions is called cyclical unemployment. Recessions cause social consequences. During the recessions, the unemployed suffers a lot.
Outsourcing Outsourcing is affecting the U.S. economy greatly. Outsourcing is taking away jobs from the American people causing a rise in the unemployment rates. Not only is outsourcing taking away jobs, but it is making it harder to find new jobs. Outsourcing is where an American company will send certain jobs or duties to be done in another country. Outsourcing is also the transfer of the management, and also the day by day execution of an entire business function to an external service provider.
However, this creates a problem in the host country, as there are fewer jobs. This impacts the economy because it increases the unemployment rate. Outsourcing financial services is unethical because it raises concerns relating quality, security and cultural differences. When discussing company activities and controls, the first ethical implication that arises is quality of service. Outsourcing results in low-quality output.
If you are part of the handful of Americans that are self-employed, or you own a business that is dependent on consumer spending, then you are especially vulnerable to the effects of this cycle. People and businesses that fall into this category will find that demand is closely related to movements in GDP, gross domestic product or the broadest quantitative measure of a nation's total economic activity (Investopedia). During a boom, such businesses should enjoy strong demand for their products, assuming that the products are actually wanted by consumers. But during a slump, the business has to suffer a sharp drop in demand (tutor2u). Such events may cause business owners to lose their customers, employees, their businesses, and eventually maybe personal assets such as their homes
The outsourcing of jobs from United States of America is becoming a major threat to the American economy. Despite the substantial benefits of outsourcing, the increase in unemployment and the economy decline causes a major concern to the US government. But economists have cited many points that support outsourcing of jobs based on certain facts. If US companies do not outsource their jobs then foreign firms will produce cheaper goods and sell it to the US market. The demand curve is negatively sloped, so as the price of the substitute goods (3) that are outsourced gets low, the demand for the costlier US goods will come down.
Many times, it is the case where a technological advance or breakthrough makes it possible to replace a previously human job. It is also an all-too-common scenario that outside influences such as sudden shifts in the market or changed government policies force corporate executives to make coinciding decisions regarding their staff and these external changes. The fall in interest rates and energy prices have helped companies control spending in the economic recession, but controlling these costs has taken some of the focus away from there employees and satisfying there wants and needs (Economist Vol. 362). Yet another problem facing the employment of our citizens.
A way to keep the divided checks flowing to the stockholders a little. Government will need to completely close the borders to trade. Economists have recognized that free trade is the better solution, economy was built on a free trade. The economy is not going to get better with people being unemployed and that is only causing an chain reaction in the U.S. economy. In these area does not leave enough jobs for U.S. Americans.
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.
Also, large- scale migration in certain areas of a country might pose a threat to its inhabitants, though it might prove to be beneficial for firms in the long run as they will be able to hire more efficient and competitive workers. However, there can't be zero unemployment in any economy because once an economy reaches full capacity, workers will have to be laid off due to several reasons, such as poor resource allocation, jeopardizing of demand and supply cycle, etc. Therefore it is essential to have a small amount of unemployment in an economy, though higher rates of unemployment will prove to be a threat to society and economy.