Outsourcing the U.S.

Paper Summary:

The increasing trend of outsourcing jobs from the United States in recent years has assumed alarming proportions. Most projections indicate that the present trend is going to accelerate in future. This paper points out that the issue has invited greater attention recently as more and more categories of white collar jobs are now being outsourced by the U.S. companies, while in the past only lower paid industrial jobs were affected. It explains that some economists, including officials of the present U.S. administration, have shrugged off the phenomenon as part of economic globalization and believe that it would prove beneficial for the U.S. economy in the long term. Others are of the view that the negative impact of outsourcing far outweighs its positive effect. In this essay, the writer highlights the negative effects of outsourcing on the U.S. economy, as well as outlining the current and future trends in out-sourcing.

From the Paper:

"The trend of relocating jobs to other countries is not a new development in the United States as manufacturing jobs have declined ever since American companies started to establish factories abroad to take advantage of lower cost structures and wages. The decline in manufacturing jobs, however, was compensated for by greater job opportunities in the service sector. Since most jobs in the service sector were higher paid 'white-collar' jobs, losing the relatively low-paid manufacturing jobs to overseas competitors was considered a bearable set back. Moreover, the rate of jobs lost due to outsourcing in the manufacturing sector was relatively gradual and the US economy had time to make the necessary adjustments. Also, according to the long-accepted theory of comparative advantage, everyone gains as long as each country specializes in what it does best. The Americans, it seemed for a while, were the best in more skilled jobs. With rapid advances in information and communication technology and the availability of highly skilled and motivated workforce in far-flung countries such as India, who were prepared to work at a fraction of the salaries in the US, things started to change."

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