Is outsourcing good or bad?

Table of Content

Introduction3

Is outsourcing good or bad3

Conclusion12

References14

Is outsourcing good or bad

Introduction

Americans are being robbed of the American Dream because outsourcing to outside countries was supposed to benefit both Americans and foreign countries as fair trade. The argument has been that outsourcing to foreign countries has not affected our country. There was a household employment survey that said that there are over 1.9 million more American workers that are now employed since the recession (Ted, 2005, 15). They do not take into account that these workers who lost their jobs and found reemployment for usually 80% of their previous pay (Justin, 2004, 22). There is a benefit of outsourcing overseas that is consumers can buy goods and services at lower prices, and sometimes higher-quality products at the same price. Outsourcing also benefits the foreign country by bringing in more work. However, the good intentions are not truly working out for America.

Is outsourcing good or bad

Globalization is having businesses move toward international trade whether it be product or services. Outsourcing overseas in essence forces everyone to compete for the bottom dollar in order to gain business. Nevertheless, globalization eliminates jobs in numerous ways. Big business is out looking for cheap resources, cheap wood, and foreign markets. This is where loss of jobs is inevitable and with the sell-offs of the facilities it only contributes to the biggest of corporations winning and not the smaller of companies because they are buying out the competition instead of building new capacity (Justin, 2004, 22).

It seems that outsourcing has hit its all time high in the United States. (Pianta, 2006) stated that the Commerce Department had announced that the January 2006 trade deficit was $68.5 billion, up from $65.1 billion in December. This chart (below see Table 1), released by the U.S. Bureau of Economics Analysis, on a monthly basis, which are just reports released by the government show a track record of seemingly failed economic policies (Pianta, 2006, 55). They try to keep record of how their efforts are doing but instead of getting better it gets worse.

Table 1U.S. Bureau of Economic Analysis Monthly Trade Statistics Month 2001 Surplus (Deficit)2002 Surplus (Deficit)2003 Surplus (Deficit)2004 Surplus (Deficit)2005 Surplus (Deficit)2006 Surplus (Deficit)2007 Surplus (Deficit)January(35.2)(29.6)(41.4)(43.1)(58.3)(68.5)(59.1)February(29.4)(32.6)(40.4)(42.1)(61.0)(65.7)March(32.7)(31.5)(43.7)(46.0)(55.0)(62.0)April(31.5)(34.0)(42.5)(48.3)(57.0)(63.4)May(28.0)(34.0)(40.8)(46.0)(55.3)(63.8)June(29.5)(35.4)(40.0)(55.8)(58.8)(64.8)July(30.1)(34.1)(40.8)(50.1)(57.9)(68.0)August(28.4)(36.2)(40.2)(53.5)(59.0)(69.9)September(30.8)(36.6)(41.3)(51.6)(66.1)(64.3)October(30.8)(35.0)(41.5)(55.5)(68.9)(58.9)November (29.7)(39.7)(40.0)(60.3)(64.2)(58.2)December(26.6)(43.2)(44.0)(56.4)(65.7)(62.1)Note: From the Off-Shoring: An Elusive Phenomenon, by (Pianta, 2006, 55)

(Schaefer, 2007, 74) stated that he had found that the growth in the trade deficit had resulted in 1.5 million job opportunities being lost. A shift has been taking place with an increasing number of skilled Information Technology (IT) jobs be lost. However, data from Business Employment Dynamics (BED) indicates that the gross job losses and gains have averaged between 7 million and 8 million, with the gains exceeding the loss. The studies do not include the costs of displaced workers. They do not include benefits lost, pay cuts, training, or even relocation.

It can be difficult and costly for workers and communities to adjust to job shifts caused by off shoring. For workers, these problems include their reemployment experiences, ...