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Effects of outsourcing in america
Negative effects of offshoring
Effects of outsourcing in america
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This report analyses how American Companies started offshoring or moving white collar and blue collar positions to other countries with low pay since the 1960’s. Also, the purpose of this report is to highlight the advantages and disadvantages of offshoring jobs to countries with low pay. This report will analyze how the consumers, communities, and corporations are beneficiated and/or affected.
In the 1960’s American Companies started offshoring job positions to Asian countries, and Hispanic countries. American Companies started offshoring American Jobs because their business was more profitable in other countries, so in order for the companies to be closer to those countries American Companies started hiring employees in those countries. Furthermore, as American companies realized how much money they could save by offshoring jobs to other countries with low income they started offshoring more jobs with the purpose of saving money. As American companies offshored white and blue collar positions, their profit incremented and they were able to invest more money in their products. The objectives of this report are the following:
• To identify what positions are offshored more often.
• How offshoring jobs affects and/or beneficiates the consumers.
• How offshoring jobs affects and/or beneficiates the communities.
• How offshoring jobs affects and/or beneficiates the corporations.
By offshoring American jobs companies will be able to profit from those positions. In contrast, employees will be affected and probably will need to gain more training in order to find another job.
Offshoring American jobs have positive and negative consequences to the American community. Some of those consequences of offshoring American jobs include Amer...
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...hored, individuals, families, and communities suffer the negative economic consequences due to limited job availability. Most people who work in these industry sectors are blue collars, who are not professional or academically qualified to work in other fields, as a result their job choices are limited, especially when the main industry in that community is to work in the stage of manufacturing. When there is massive unemployment within a single community the loss of manufacturing jobs can threaten consumers, creating other problems in the society that result in economic costs. Such problems may spiral into the loss of one's car or home, personal debt, and the lack of economical means to afford a child's education, thus continuing the cycle of economic poverty. These aforementioned consequences are indirect and important economic effects of offshoring American jobs.
But First, Training Foreign Replacements” by Julia Preston covers only a few relevant topics dealing with international marketing. The main topic covered in the article reveals to be the main concern dealing with outsourcing. Outsourcing is a subcontracting process to a third-party company. According to our text Global Marketing, outsourcing is defined more specifically as the "shifting jobs or work assignments to another company to cut costs. When the work moves abroad to a low-wage country such as India or China" (Keegan & Green). Outsourcing reveals to be rather complex, impacting companies and businesses in different ways, both positively and negatively. The article mainly focuses on the issue of outsourcing in terms of the temporary visas known as H-1B, which are visas for immigrants that possess advanced science or computer skills. The article discusses how the company outsources from a firm based in India in order “to be more current and nimble” and “reduce costs when possible due to wage weaknesses in wage regulations” (Preston, Web). On the other hand, outsourcing negatively affects the Disney employees, or cast members, by causing American workers to lose their jobs or career opportunities and be replaced by temporary visa highly skilled technical immigrants for lower pay. Outsourcing is sometimes referred to as
Offshoring affects Canadian workers in two major ways. First, when businesses decide to offshore certain functions, jobs are essentially transferred to other countries. Layoffs, and in some cases mass layoffs, occur due to the elimination of local jobs, causing discontent among the local community.
U.S. Labor History Unionism can be described as "a continuous association of wage-earners for the purpose of maintaining or improving the conditions of their employment" (Smelser). This means that a group of workers can unite to gain more power and leverage in bargaining. The bargaining process may include many aspects but usually consists of wages, benefits, terms and conditions of employment. The notion of union came about in the 1700's. In the beginning, as it is today, workers united to "defend the autonomy and dignity of the craftsman against the growing power of the company" (Montgomery).
Recently outsourcing has been in the news, especially during political election years. It seems to be a phenomenon that is causing much concern among the population. But exactly how is outsourcing effecting both workers and businesses? And is it as big of a problem as politicians describe?
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”.
Many businesses hire low skilled workers for low wage, but many Americans are not willing to work for low wage. Moreover, many businesses want to keep their costs in a very low price, to achieve the high profit margin. They get their employees from other countries and moving production over the world. Many workers in the United States come from halfway across the world. Low-paid workers are used to produce and export raw material. Companies use cheap raw materials to produce products and invest to other countries with high profits. “People in the south still produced items for export to north--but now they export manufactured food as well as raw materials” (Chomsky 5). The New England was the first one to try out with new business in the U.S. southeast in the beginning of 21th century to find lower cost. “The New England textile industry was one of the first to experiment with plant relocation, shifting its production to the U.S southeast starting at the very beginning of twentieth century in search of lower costs” (Chomsky 5). The relocation program was very successful by the end of the
Froma Harrop’s essay New Threat to Skilled U.S. Workers is a detailed and factual essay about the mystery of job-outsourcing. She also mentioned the long-term effects of the issue on our economy. Harrop’s audience for her essay leans towards skilled U.S. workers who are unaware that many jobs are moving overseas, but includes young college students as well. At the beginning of the essay Harrop immediately starts with an account from Alan Blinder, a Princeton economist. She describes his great displeasure after hearing how enthusiastic U.S. executives were while discussing job-outsourcing. Another pertinent piece of information included in Blinder’s account was his prediction that a great amount of jobs would be lost in the near future. “We speak of computer programing, book-keeping, graphic design and other careers once thought firmly planted in American soil” (Harrop 130) Harrop’s use of other sources helps give more credibility to the essay; however, it can decrease the complexity. Aft...
Slaughter said it’s a common perception that hiring overseas means fewer jobs in the United States. Not so, he said. While job losses are certainly true for some companies, statistics have shown that, generally, increased hires abroad also have complementary increases here.” (Kibbe, 2004)
Companies are relocated some or all of their workforce to other countries where labor and material are cheaper. This has been bad for America, but the American companies are using it as a way of making more money by reducing their overhead. For America it is bad, because of the loss of jobs for people and loss of taxes paid by the company to the government.
As esteemed journalist Tom Piatak wisely puts it, “The trickle of outsourcing threatens to become a flood.” His words speak the truth as outsourcing has left United States’ workers jobless, and it continues to increase the unemployment rate every year. During February of 2009, American workers lost a record 651,000 jobs alone, increasing the unemployment rate to 8.1 percent, the highest it has been in 25 years (Katel). Multinational corporations, hoping to cut down costs and stay profitable in the market, outsource by exporting American jobs to third-world countries such as China and India. It may seem noble that outsourcing provides third-world countries with job opportunities, but the United States’ markets and industries are greatly affected. Outsourcing is harmful to the United States’ economy because it paves the way for job losses, decreases product consumption, and widens the gap between the rich and the poor.
American prosperity was built on the backs of middle class families with one or both parents working in the manufacturing and living their American dream. When companies moved big portion of their manufacturing to China these workers had to be displaced to different jobs that were created as a result of the higher profits companies earned and invested back in the economy. The new jobs often needed training, but were better paid, and at the same time consumers enjoyed the price cuts in the products they were buying. Economists call it win-win situation where more jobs are created in the U.S., the economy benefits from the companies’ higher profits and people from developing countries have a chance for better life. However the lives of the families of the workers that lost their jobs to offshoring have changed irreversibly. U.S. companies more than d...
Large corporations seeking the extra dollar to pocket are willing to spend whatever it takes to reduce the cost of production and increase profit margins. Doing whatever it takes in some instances can help men moving operations overseas to developing countries who are glad to be working. These developing countries unemployment rates are extremely high, so any job that pays is great to have. Americans lose jobs to foreign workers because the American economy is one of the largest in the world and its citizens enjoy great standards of living, when juxtaposed with a city of the same size in Taiwan. Labor costs play a huge and crucial role in corporations, which in turn pay the profits to the corporate giants who run, manage, and own the businesses.
We say that we are heading toward a more global economy because of the fact that competition in today’s markets is global. This means that corporations in the United States can compete in foreign markets and vice versa, therefore U.S. corporations and foreign corporations become interdependent and thrive off each other. This can have a good impact on the United States because it allows U.S. corporations to seek materials and labor outside of the U.S. in countries such as China, India, and Mexico, where workers are paid a lot less money than U.S. workers, thus allowing them to sell their products for significantly cheaper than if they were produced in the U.S.; however, the tradeoff is that many American workers in the industrial sector lose jobs due to this shift of labor to overseas. In the long run this will be beneficial for the U.S. and although some percentage of workers are losing work, new jobs in the services sector, in fields such as computer technology, telecommunications, and language skills are opening up and experiencing growth because of this change.
We are all better off when these companies use low wage workers here than we would be if they go off shore to get the workers. We are certainly better off than if they had to close. Every job that is kept here, even if it is a lower wage job, creates more jobs. A manufacturing job creates 3 or more additional jobs in our economy, service jobs create at lease one more. The workers are spending their paychecks to feed, clothe and shelter their families. They are buying things and helping to keep factories, stores and restaurants open. And don't forget, they are paying taxes.
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