Foreign Labor and Manufacturing

Paper Summary:

This paper examines the economic influences of the lower cost of labor available in developing nations, such as China and India, and its eventual effects on the United States market. Both foreign manufacturing and out-sourcing are considered The paper discusses how US retailers have taken advantage of lower-cost foreign goods, with a specific focus on Wal-Mart. The author concludes that the long-term effects of these practices are not well documented nor are the effects of these changes on the US necessarily as positive as the immediate effects on revenue and profit.

From the Paper:

"Three broad impacts can be expected from the shifting of labor and production costs to developing nations like China: first, the outsourcing of jobs ordinarily filled by American workers, creating higher rates of unemployment in the U.S. The debate regarding this migration of jobs overseas has become an important political topic recently, but also has significant economic implications. In the most positive light, this increased competition for jobs could encourage American workers to obtain new skills and education; conversely, it could lead to high rates of unemployment and reduced spending power among U.S. citizens (Hira and Hira 2005). Although the immediate labor savings for American corporations are financially beneficial in the short run, the long-term impact on spending power among consumers could harm these very same companies' bottom lines; outsourcing potentially harms the long-term economies of corporations in this manner. Additionally, claims that the U.S. workers displaced by outsourcing will be reemployed have been proven unlikely by recent research: the reemployment rate for these workers has been called "abysmal" by some academics (ibid.)."

Sample of Sources Used:

• Hira, Ron and Hira, Anil. Outsourcing America. American Management Association Press, 2005.
• "Is Wal-Mart Good For America?" PBS Frontline special. Hedrick Smith and Rick Young, 2004. Transcript available at http://www.pbs.org/wgbh/pages/frontline/shows/walmart/etc/script.html
• Kolbert, Elizabeth. "The Climate of Man," New Yorker 3-part series, 4/25/05, 5/2/05, 5/9/05.
• Smith, Martin. "North Korea's Nuclear Gamble," PBS Frontline special, 2003. Transcript available at http://www.pbs.org/wgbh/pages/frontline/shows/kim/etc/script.html

More papers on Foreign Labor and Manufacturing:

• Research Paper # 100561 : "Foreign Direct Investment"
• Persuasive Essay # 105795 : "Child Labor in a Global World Market"
• Analytical Essay # 135982 : "China and the US"

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