Outsourcing and the US Economy Essay

Everybody has their own worries and opinions, so they choose to care about different things. Barbara Ehrenreich puts it this way, “The world may be flat, as New York Times columnist Thomas Friedman has written, but I always liked to think that I was standing on a bit of a hill” (608). The truth about outsourcing flies over the heads of many Americans, but hits Ehrenreich right in the face. She writes this article because it’s a journalist’s job is to take in new information that may be hard to understand or meant to be kept on the down low and convey it in a way that’s appealing to many. She implicitly blames CEOs and other high class positions for some of the more outrageous and negative outsourcing situations. Zakaria directly addresses this problem stating: “There is a growing gap between America’s worldly business elite and cosmopolitan class, on the other hand, and the majority of the American people, on the other” (622). America’s worldly business elite and cosmopolitan class are the ones that understand and control outsourcing, while the rest of Americans stay uninformed and are the real victims of outsourcing. Zakaria describes “the rise of the rest” as the third major tectonic power shift. His theory, which makes perfect sense, implies that these power shifts are a natural occurrence. According to Zakaria, the third shift shouldn’t hurt America and Americans shouldn’t feel threatened or worried by it. The thing that Americans should be worried about is the growing gap of power that exists between the elite business class and the rest of Americans. Because the higher class only looks out for themselves and only seeks profit for the firms that they control, many negative things are happening to the lower class, the biggest being the outsourcing of their jobs. This gap in power is what Zakaria thinks could hurt America and make it impossible to adapt to the more globalized world. Americans need

Outsourcing emerged on the financial arena during the 1980s and has since then been spreading. Outsourcing production was furthered with the process of globalization which provided a new component leading to the strengthening of resources, skill and labor specializations across the world. The process of outsourcing is using the skill and abilities of a third-party to accommodate society on the foundation of labor. As stated earlier, it was during the 1980s that the process kicked off mainly due to the efforts of corporations when they began to hire labor forces across the world. Even though outsourcing has come out from its developing stages, there are still following effects on the US economy.

It ends up putting our country farther into its trillions of dollars in debt. “Eight of the biggest U.S. technology companies added a combined $69 billion to their stockpiled offshore profits over the past year, even as some corporations in other industries felt pressure to bring cash back home (U.S)”. Eight of the top technology companies,including Microsoft, Apple and Google, now account for more than a fifth of the $2.10 trillion in profits that U.S. companies are holding overseas. “The amount of unrepatriated foreign profits reached $2.4 trillion, according to Citizens for Tax Justice, allowing companies to avoid up to $695 billion in taxes

“Outsourcing refers to the practice of contracting workers outside of a company or business for work duties or services previously performed by company employees or “in-house”. This practice is also often referred to as offshoring due to the increasingly prevalent use of “non-U.S.” service providers for these outsourced duties. However, strictly speaking, outsourcing can and does refer to the use of contracted labor provided by individuals outside of an organization, but still within the U.S.; whereas when these same services are provided outside the U.S., it is both outsourcing and offshoring.”

The phenomenon has created major suffering for many American and as this outsourcing continues to spread, Americans will demand action (R. Hira 2008, p-95). The book also adds that scholars Ralph Goory and William Baumol have shown that even when the basic model of the economics are used trade does not make both the trading partners better off. The trading in one country will have a negative impact while trading in other country will have a positive impact. The country with negative impact will definitely affect its economy. United States economy being the world’s largest economy; historically, it has maintained a stable GDP growth, a low unemployment rate, a high level of research and capital investment funded by both national, and because of increasing saving rates, increasingly by foreign investors. But offshore outsourcing has increased the unemployment rate dramatically in the decade. And so the economy worsened day by day.

The U.S. economy has seen many hardships within the last decade. The economy has suffered from a recession that is still threatening to cripple some Americans and unemployment has been at an all time high. People have lost homes and jobs and many businesses have gone bankrupt simply trying to survive. However, in the midst of this economic crisis some companies have managed to survive. Many companies, approximately 36% of them, have found a way to avoid economic collapse by cutting costs (Job Outsourcing Statistics, 2014). One of the most popular cost reducing strategies of our time is called outsourcing.

It is believed that offshoring will have minimal effects on the employment rate in America due to the theory that when jobs are moved to other countries, the workers who have become unemployed will find employment as new opportunities are created. In reality, the adjustment will be difficult as proven by data collected by the Bureau of Labor Statistics Displaced Workers Survey in the year 2004. A survey showed that workers who were laid off between the years 2001 and 2003 remained unemployed at the beginning of 2004. It was also recorded that 43 percent of those who managed to find work earned the same pay as they did prior to being laid off, but the remaining 22 percent did not. These facts rely on the rate at which

A large majority of the American people are against outsourcing because it leads to fewer jobs, unemployment, and the negative impact it has on our economy. Moving a company to a place with cheaper labor and such causes thousands to lose their jobs and it also leads to less jobs that Americans can have. Outsourcing is only good for big businesses, not the people who work there or the smaller businesses around. It also has a negative impact on our economy. Although you are producing things at a cheaper price and selling it on the cheap doesn't mean people are able to buy it. If you get rid of jobs and cause unemployment, less people can purchase things and circulate our money. Our economy is built on the fact that people are able to purchase products. When that goes away

     The exporting of American jobs is an issue that is important and will become increasingly so as more and more white collar jobs are shipped overseas. American companies in the past few decades have been sending American jobs overseas paying residents of other countries pennies on the dollar what they had paid American workers to do. This saves the companies millions of dollars on labor costs but costs Americans precious jobs.

Not only is this outsourcing causing companies to lose their best employees, but also the consumers that buy their products. "Employees displaced by foreigners and left unemployed or in lower paid work have

For starters, the rise of Cooperate America has led to a hot button issue in every single election: the loss of jobs. For example, Nike pays 75,000 workers to manufacture their shoes, but those are all outsourced jobs. As such, the only positions left are a few thousand

Economic theory and past history point to the fact the trade provides net economic gains but if it also redistributes wealth, affects worker employment the short run and wages in the long run. It is easy to find literature that tells of the growth of the American economy with the increased use of outsourcing. It is however a different story when one asks the question who is reaping the benefit of the new lower

Many businesses in United States manufacture their product overseas. This involves manufacturing products outside United States where the labor cost is cheaper. Because of cheap labor, it is often more economical for a U.S. company to manufacture overseas and pay the shipping costs than to manufacture in the United States. For a company, the savings may be substantial. However, there are negative impacts on U.S. employment, as many jobs in the United States are being outsourced and replaced by overseas positions. The manufacturers outsource production projects to save time, money or resources. The manufacturing is outsourced so as to remain competitive and maintain a steady work flow. Without outsourcing, manufacturing costs could escalate to the point at which no product would sell and all employees would have no work. Outsourcing comes

is the attempt of this paper to explain outsourcing , it's pro's and con's and

For decades, American citizens have been complaining about how outsourcing has ruined their lives and that it is only going to harm America and its economy. Unfortunately, jobs are going to be lost and the unemployment rate may rise due to globalization. However, the benefits of globalization are infinite. People in other parts of the world will achieve a greater life than they ever thought possible due to the factories built in their countries. Due to the poverty in third world countries, these factories will provide a great source of income for the citizens of third world countries. People in America will benefit from the stable economy; prices of America’s goods will stay relatively the same. Despite the misinformed Americans opinions