How does outsourcing 'benefit' US citizens? Do the benefits exceed the costs?

Answer 1

Everyone so far seems to say that it doesn't benefit the US. I'll provide a point-counterpoint.

To all the other users: the costs of outsourcing are readily recognizable in terms of jobs lost by Americans. This I recognize. Don't construe any of the following as either an endorsement or a condemnation of outsourcing.
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Outsourcing is basically competition for jobs throughout the world rather than just competition in the domestic economy. In other words, I must compete against the Chinese for the same job offered by a domestic company.

The benefits:
Many businesses could not offer robust, manpower-fueled services because the cost of hiring employees prohibited implementation. For example a home-run business could not have a 24-hour call center because the cost of hiring multiple employees to man the phones was simply too great. Now, however, many outsourced call centers offer 24-hour call center services to businesses at the same cost of hiring one american to answer phones only 8 hours a day. This means that Ma-and-Pa businesses can compete with larger companies by leveraging outsourced resources.

We are currently in a transition phase where outsourcing is removing jobs, and, at the same time, small businesses have not taken full advantage of the benefits of outsourcing (in part to the negative stereotype of outsourcing).

In the long run, the benefits will exceed the costs. Eventually, increased communication and trade will lead to more stable governments, better cross-cultural understanding, and greater innovation. For a very good, albeit lengthy, analysis pick up a copy of "The World is Flat" by Thomas Friedman.

Answer 2

OUTSOURCING is not meant to benefit US citizens. It takes their jobs and steal money out of the US economy while fattening the pockets of the companies that outsource.

The wisest thing a person can do is not buy anything that has been outsourced by an American company. The claim that the other country can do it cheaper is a lie: If it were true, you would have to pay less for it in the store. The 3 - 9 % savings that you are getting is no reason for your friends, family, and neighbors to fall into destitute. If you feel that is them, and not you, remember that YOU are the one that have to pull them out of the muck and mire that is created by the greed of the outsources.

Answer 3

Because of the cost factor outsourcing benefits US or any other economy. In economic terms this is a form of comparative advantage. When a company is benefited by outsourcing, it indirectly benefits the nation in which the company is located. It is true that outsourcing works against the interests of the natives. But that disadvantage is compensated by the overall economic growth of the nation. The cry against the loss of job opportunity by the natives is similar to the voice leveled by workers in various parts of the world against the introduction of sewing machine(Europe), tractor(India), and computer (many nations).

Answer 4

I'm convinced that outsourcing doesn't benefit US citizens. Of course, people in the countries that we are outsourcing to, along with managers of the companies that are doing the outsourcing, would like you to believe that everyone benefits. That isn't true. It puts Americans out of jobs.

Answer 5

There is no benefit for the US whatsoever. Only some big companies benefit from "outsourcing."

Answer 6

If the outsourcing go outside of US, then the answer is;

1. Good for the company, less cost, higher earnings, higher GNP.
2. Increase unemployment rate, a bad indicator for US economy
3. Higher unemployment rate, less purchasing power for the citizen, less consumer goods spent, less economic activities. Bad for the overall economy
4. Affected socio-economy, lower standard of living.
5. Higher spending on government social security
6. Possible higher rate of crime cases.

Answer 7

Good answers! No benefit for us American citizens -- just the big rich decision makers and their big companies. Anyone that believes outsourcing is good for us is believing the b.s. propoganda.

Answer 8

only the rich benefit