The Outsourcing Dilemma
Introduction
According to Daniel W. Drezner, Assistant Professor of Political Science at the University of Chicago and author, "Outsourcing actually brings far more benefits than costs, both now and in the long run. If its critics succeed in provoking a new wave of American protectionism, the consequences will be disastrous for the U.S. economy and for the American workers they claim to defend." (Drezner, 2004)
History is in the making as we listen and read about the heated debate on outsourcing from our "somewhat comfortable" suburban lives in the Midwest. Our comfort levels are being challenged, however; as we are made aware of friends, others close by, and the media reporting on those losing their jobs to outsourcing. What gage can be accurately used to measure the true effect of this phenomenon? The truth seems to elude our grasp as we hear those who are passionate speak out on both sides of the issue.
Outsourcing: Its Roots
Lou Dobbs, CNN anchor, known for his anger toward outsourcing believes that outsourcing's origins began with "the collapse of the telecom and communications bubble in 2000." He believes that "moving from the manufacturing offshoring to outsourcing was really a creation of the Internet", stating that "the bandwidth made it all possible." (Fleischer, 2005) Braun Consulting pinpoints the outsourcing industry's beginnings to be quite earlier, going as far back as sixteen years. "After the end of the Cold War more countries began opening up their doors to international trade and the exchange of jobs and services. The trend towards globalization began to increase dramatically." (Braun Consulting News, 2004) Still other sources renounce the idea of outsourcing as a trend or fad revealing this explanation. "In some ways, the beginnings of business process outsourcing (BPO) can be traced back to the Second World War, when engineering and quantitative analysis tools were introduced to improve the manufacture and distribution of war materials." (Jones, 2006) Being aware of the origins of outsourcing's beginnings can help to bring our understanding to a higher level. Until one is able to precisely trace its beginnings, it is almost certain that it would be difficult to predict the effects of outsourcing or where it will take us as individuals, let alone a nation.
Outsourcing: Why?
IBM's chairman and CEO, Sam Palmisano, delivered a hard
Offshoring American jobs have positive and negative consequences to the American community. Some of those consequences of offshoring American jobs include Amer...
In the article Your Local News, Barbara Ehrenreich provides her personal and professional insights into outsourcing, starting with a newspaper in California that has begun outsourcing the writing of even some of its local stories. In the article The Rise of the Rest, Fareed Zakaria looks back on history to see how we arrived at globalizing and he examines the present through myriad examples and data to then consider the globalized future with “the rise of the rest.” Zakaria’s article better helps understand Ehrenreich’s insight about outsourcing. With the help of Zakaria we better understand Ehrenreich’s outlook of outsourcing.
Mankiw and Swagel (2006) argue outsourcing is not as large a phenomenon as the media describes. Their research indicates outsourcing accounts for very little of job loss in the United States, nor has it made a distinct contribution to the slow rebound of the labor market. They go on to propose that increased overseas employment has actually contributed to higher employment in parent United States companies. They reported that while 30,000 jobs were lost per month in 2004, two million job changes per month were happening as well. They reference the Bureau of Labor Statistics when they report that in 2015 there are expected to be 3.4 million jobs outsourced, but 160 million jobs gained here in the United States. They also claim that there is a rise in net US income by 12-14 cents per dollar of outso...
For advocates of global business, the hope is that outsourcing will help lift the United State’s economic growth and development by lowering the input cost of services (i.e. labor and materials) and by opening new markets abroad. Mainstream economists believe that outsourcing will have ...
Both sides can agree that outsourcing can be desirable for a business do to the potential profit. It allows goods to be made cheaper, management to run smoother, and money to be made faster (Salanţă 270). Both sides can also agree, however, that U.S. jobs are lost as a result of outsourcing (Ahmed 192), as well as environmental damage being cause due to corporations taking advantage of loose environmental regulations (Marquis 39). Upon digging deeper into this debate, one can find that both sides present very convincing arguments.
Since the concept of outsourcing was introduced it has been a subject of debate between politicians and citizens of the United States. Remarkably, it was the United States who supported outsourcing and now it is the United States that feels its economic progress is being threatened by outsourcing. One may argue that the financial situations that existed two decades earlier are not the same as they are today, thus the change of time, business priorities of economies have also changed.
This report is extremely credible and qualified, as it was written by an author who is well-versed on the topic. The author was also the Assistant Secretary of the Treasury in the Reagan administration, making him even more authentic source. Throughout the article, the author discusses and examines the words of two other authors, Ron and Anil Hira, who are experts on the subject of American Outsourcing. These authors are also very credible; one is a professor at the Rochester Institute of Technology, and the other is a professor at Simon Fraser University. Additionally, the author refers to many case studies that were taken at different universities in order to justify his claims on why American Outsourcing is bad. The intended audience is
As the problem of job outsourcing becomes more of an issue in politics, elected officials like the President and Congress will no longer be able to ignore the dilemma. The war in Iraq has been at the forefront of the presidential race but the importance of outsourcing American jobs seems to have been slightly overshadowed. If the issue of outsourcing is not watched carefully and a definitive plan hammered out, a trickling down of negative effects may occur within the U.S. economy. However, there is a polarized opinion on the effects of this “phenomenon”.
The U.S. industries have been outsourcing manufacturing for several decades now. U.S. companies thought they were reducing costs by outsourcing development, manufacturing, and process-engineering abilities. Consequently, U.S. corporations’ knowledge, skilled workers, and supply chain, which are the necessities to producing advanced products, have vanished. For example, almost all notebook computers, cell phones, and handheld devices, which were once created in the U.S., are now designed in Asia. When a major U.S. company outsource, it pressures their rivals to do the same thing. They also lose the expertise of process engineering, which would interact with manufacturing on a daily basis. Minor companies and skilled workers go to where the jobs and knowledge networks are no matter where they are geographically in the world. This decline of trade in the U.S. has caused a negative chain reaction to their suppliers of sophisticated materials, tools, production equipment, and components. U.S. industries do not have a way of coming up with new ideas for the next generation of high-tech products...
Weintraub, Daniel. “Outsourcing is Good for America…and California”. The Sacramento Bee. 13 July 2004. Google Search. 5 December 2004
Kibbe, C. (2004, 07 09). Outsourcing: the good, the bad and the inevitable. New Hampshire Business Review, pp. 1A-21A.
Outsourcing has become a very popular issue, and it has reached an all-time climax. Firms are starting to do this a lot more than than in the previous decade. What is outsourcing? Outsourcing is defined as “The procuring of services or products, such as the parts used in manufacturing a motor vehicle, from an outside supplier or manufacturer in order to cut costs.” And it has become a big issue in our country. There are thousands of articles and books written on it, and you can attend numerous classes and speeches on the subject. The use of outsourcing is quite simple really… Either pay an American worker $15 an hour, or pay someone in India to do the same job for $2 an hour. There are lots of other advantages and disadvantages to outsourcing but I will address those later in the essay. So what does an average American really know about outsourcing? Most people would say sending our jobs to another country in order to save money isn’t justified. It would cost a lot of people jobs, which would send them into distress and possibly debt. But that’s not the whole story behind outsourcing. People hear about outsourcing and automatically decide that it is bad for our economy. What about the good things that outsourcing brings to our economy? We are sending jobs to India, their consumers will start making more money, and in return buy more of our goods and services. In this essay I will show you both points of the debate and you can decide for yourself whether or not outsourcing is bad for our country.
Outsourcing has been around for many years. In this paper I will discuss some of the history of outsourcing, the goods things about outsourcing, and the bad things about outsourcing.
[4] Gupta, Sachin. For a global software company, outsourcing began at inception . World Paper. April 19. 2004 http://www.worldpaper.com/2004/april/april4.html
When Americans hear the word “offshore outsourcing”, they automatically assume that Americans are losing their jobs to foreign countries. Most of these jobs that companies outsource such as the garment industry jobs are offshore outsourced because they are labor intensive jobs. According to Timmerman