Why does outsourcing jobs become a major issue???

Answer 1

It takes jobs away from American workers. Companies use outsourcing because they can pay foreign workers less than American workers to do the same job.

Answer 2

Because it is a complex issue that is very easy to portray as simple and bad. Almost every single economist will tell you that "not outsourcing" is much worse than outsourcing. In fact, if a country never outsources, its economy crumbles (similar to what happened to the Iron Bloc, or the Smoot-Howley tariff before the Great Depression).

Politicians have used this phenomenon as a campaign issue. Please, never, ever believe politicians.

They use a simple argument, that makes sense to the common person. People in other countries can work for less than us, so companies seeking to maximize profit will relocate jobs there.

It makes sense, right? But, as Galileo proved, don't believe Aristotle just because he makes sense. Look at what is actually happening.

In real life, jobs DO shift from country to country (in fact, studies show that jobs tend to shift to rich countries much more easily than poor countries: in economics, this is called a "flight to quality). However, is wage the only reason for it? The answer is no.

We go back to the politician's formula of outsourcing...lower wages = greater profit. Is this a valid formula? Well, that would depend on output, right? If you pay workers 50% less, but they produce 75% less, then you are losing money.

In fact, this is the case. Wages are sticky to productivity, and many companies with itchy trigger fingers who relocated because of lower wages are now (or have already) moved back, because the low wage workers were no where near as productive as their American counterparts.

There is an equalizer, however, and that is technology. In fact, a study by Harvard University found that only 2% of the job losses in the last American recession (the first few years of the Bush admin) were caused by outsourcing. It was actually advances in technology that made many jobs obsolete. This is a good thing, according to economists. Normal people might wonder whether we should value technology above jobs, but once again, economists will point out that technology that costs jobs tends to add more back.

So, I hope I have shed some light on the question. Outsourcing is an issue because it is useful in the sense of the sophist. Such issues have many names, but I like "phantom issues." I don't know if such a post will be well received, because phantom issues in general are rarely known to be phantom issues, and my experience on these forums has indicated that most participants believe the dream, you know?

Answer 3

In recent years, because it is now affected white collar jobs/professions and those jobs are going to another country vs. being kept in the US.

Manufacturing outsourcing has been going on for 20+ years.

That said, over time it can be a good thing assuming the countries we outsource to begin to buy more of our goods and services. It has already been shown that there are quite a few new middle class Indians now-- with money to spend.

Correction-- I was think more about Offshoring type of outsourcing.

Onshore type of outsourcing can be a good thing in that companies which provide those jobs do so as their Core competency.

Answer 4

It is a benefit to the companies as the cost of employees is dramatically reduced, and working standards are automatically cut down to almost next to none.

This is something that is being done worldwide.
While it may infact help the people that are being outsorced and their economically weaker nation, it is ensuring a destruction of labour economy domestically.

By outsorcing workers from a cheaper country, it leaves no room for more expensive domestic workers ( eventhough they may be paid minimum wge they are still more expensive). Ultimately that leads to high unemployment rate, and in turn creates a low consumer confidence, which can further destroy the economy.

Another problem that it creates is "sub-standard" performance whre the work carried out will not be as of strict guidelines and quality as if it was performed by a domestic worker who is obliged to have some degree on self emposed quality check.

As long as the countries allow their people to be outsorced to richer companies for next to nothing and bare rights, this problem will persist to occur. It is a major problem with globalization.

Answer 5

because employers have a social responsibility to provide a good standard of life to their employees (in theory) not just a paycheck...therefore, there should be access to health care benefits, retirement plans, etc., etc. But all that costs money, so people get fired and replaced by "contractor" who are outsourced from other companies or do the jobs freelance. They usually get a little bit more money to do the job than a full time employee, but they end up saving money on retirement pay, health insurance premiums, etc, etc. Before you know it, no one will have a retirement plan...it's yet another way that the middle class gap is closing in on America...

Answer 6

it's good for the companies, bad for america. And it's funny that Clinton approved a republican sponsored break in outsourcing jobs, and the cons are complaining that Clinton didn't stop them from doing the wrong thing! Personal accountability!

Answer 7

I think that outsourcing should be illegal, they are being traitors to their own country in the name of the almighty dollar!!!! Hence putting hardworking americans out of jobs.

Answer 8

1. Because it takes billions of dollars out of our economy.
2. It takes jobs from Americans/immigrants.
3. All the profit it creates goes right into the hands of greedy corporations.

Answer 9

while it does increase the profits of some companies and increase the management team and profits it puts Americans out of work .
Lets see we have around 75,000,000.people who do not read and write .I know it is hard for you to accept this if you have an education and work in an office .Or have graduated from high school and gone to college .I have met plenty in my line of work and our jails are full of them .So by removing jobs that only require phisical labor you are reducing the available jobs for people to work in .

Answer 10

Because it takes away local jobs by giving it to people in other countries who can work for less.