An examination of the impact of outsourcing work as a catalyst to stimulate outsourcing strategies at a local, regional, and national level.
Written in 2008; 1,377 words; 5 sources; APA; $ 46.95
Paper Summary:
The paper reviews currently available research data on the influence of salaries, tax policies, labor statistics, and balance of trade results in determining the net inflow or outflow of goods from regions of the world. The paper concentrates on addressing the impact of lower wage non-unionized countries on the shift of production to their regions and the resulting increase in inflow of products to the higher wage, unionized countries of the world.
Outline:
Questions and Hypotheses
Significance
Summary and Conclusions
From the Paper:
"Any study of the effects of multiple economic factors on the global migration of jobs from one economic region to another requires by definition a multifaceted and combinatorial approach to defining both the research methodology and introduction and deleting of key variables. What emerges from the significant body of research on the combined effects of wages, tax policies, labor statistics and balance of trade results on outsourcing is a framework that defies traditional econometric analysis.
"As a result much of the research completed in this area has taken either a segmentation of companies by their size in sales, or by the industries they participate in. The most ambitious studies, several of which are based in the German economy, look to triangulate the effects of economic variables, company size, and industry classification with the results being comparable to those studies that segment on company size alone.
Beginning with wages and the stratification of labor by skill level, the reciprocal effect of higher wages and greater unionization of the lowest skilled jobs has shown through the analysis of Feenstra and Hanson (1996) and Jones and Kierzkowski (2001). Their collective research illustrates that when unionization and higher wages combine to drive up the cost of completing repetitive, easily transferable processes, organizations in higher-wage countries choose to outsource rather than pay the premium just to have these processes kept in-house. Feenstra and Hanson (1996), in their study of 400 industries, found that the higher the job content complexity in a given industry, the less propensity for outsourcing, while those industries with low job complexity, higher unionization levels and greater a deficit balance of trade being the most impacted by outsourcing of manufacturing jobs at the industry and company-size level. "
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