Where Has My Job Gone?

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Where Has My Job Gone? With the implementation of minimum wage and rising production costs in the United States, many companies have found themselves looking for a way to save money on production. Clothing manufacturers such as Nike have used labor forces in other countries, mainly in Asia to produce their products. These countries can offer similar quality labor for a cheaper cost on wages. The lower or non existent minimum wage laws in foreign countries allow companies like Nike to cut production costs drastically, while still being able to produce quality products. Similar trends are starting to creep into software companies. They are finding a workforce able to do similar work as the American workers, but for less pay. These companies are outsourcing their work. Outsourcing is simply the transfer of operational responsibility of either business processes or infrastructure management to an external service provider. [1] The majority of these jobs end up in India due to their low wages and high level education. Why would companies outsource? Companies look to outsourcing software because of the many benefits it provides. Most noticeably is the savings on costs it can provide. The lower costs over in Asia, especially India, help to reduce and control costs. The production costs are lower because of the lower wages of the workers in India. The average yearly salaries for IT programmers were $5,880 in 2002 compared to the $63,331 US programmers were making. [2] The difference is that labor in India costs about 9% of the costs of the US labor. Furthermore, by outsourcing software work to India, companies can use their existing personnel for different projects. The US workers can be put on tasks that c... ... middle of paper ... ...r, 2003. The International Herald Tribune Online. 16 March 2014. <http://www.iht.com/articles/112489.html>. [7] ”Advantage of Outsourcing to India.” VT Consulting. 16 March 2014. <http://www.vtconstng.com/oadv.htm>. [8] Rayen, Ranjeet. “ITPL to become role model for Bangladesh’s hi-tech park.” 19 June 2001. GlobalOutsourcing.org. 16 March 2014. <http://www.globaloutsourcing.org/resourceCenter/readContent.asp?ContentID=168&SectionID=5&SectionName=Country+Focus&SubsectionID=34&SubsectionName=Asia%2DPacific>. [9] Pink, Daniel. February 2004 “The New Face of the Silicon Age.” Wired. Issue 12.02. 16 March 2014. <http://www.wired.com/wired/archive/12.02/india.html?pg=2&topic=&topic_set=>. [10] Adam Smith. An Enquiry into the Nature and Causes of the Wealth of Nations (1776), reprint, ed. Edwin Cannan (New York: Modern Library), 1937, p. 14.

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