Outsourcing of American Jobs to Foreign Countries - Research Paper Example

“Offshore outsourcing in the services sector is a major shift in how our economy operates, and it will have serious impacts on the tragedy of economic growth, national security, the distribution of income, and the workforce” (Hira and Hira, 2008, p. 95). This is essentially a way in which jobs that would otherwise have been made available to the Americans are being sold out to people outside America, thus causing hundreds of thousands of Americans to remain unemployed and face the consequences.

There is a lot of literature that suggests that US is bringing the economy of such other countries as China at par with her own by outsourcing jobs to them, thus creating a two-way negative effect on her own economy, firstly by depriving the Americans of jobs and secondly, by making the economy of other countries stronger and her own weaker. This paper discusses the negative implications of outsourcing jobs to other countries by US. Outsourcing is making the American economy weaker and the American citizens unhappier day by day.

Overseas outsourcing is causing loss of jobs for the Americans. “Over 2 million manufacturing jobs have been lost since the official start of the Great Recession and since the 2000, the United States has lost 5.6 million jobs, or about 33% from year 2000” (Oak, 2011). . One company that is conventionally loaded with criticism despite the fact that it is the largest retail brand in the US is Wal-Mart. The very reason for which Wal-Mart is criticized is outsourcing. Wal-Mart is accused of outsourcing the services of vendors to make the products it does business from.

Wal-Mart is enlisted among the biggest importers of China in the US as it imports up to $7.5 billion from China and roughly just as much from its suppliers (Heal, 2008, p. 115). One of the most vocal critics of Wal-Mart is the organized labor, which is primarily the group of unskilled labor which suffers from the effects of outsourcing. “Economist Paul Samuelson, a Nobel Prize winner, wrote in a 2004 paper that the economic effect of outsourcing is similar to allowing mass immigration of workers willing to compete for service jobs at extremely low wages” (Bloomberg Businessweek, 2012).

Outsourcing of American jobs to the foreign countries exposes the American entrepreneurs to a lot of risks. In the capacity of the importers of services of the foreign vendors, success of the American entrepreneurs is tied to the financial health of those vendors. It is not quite unusual for a foreign vendor to go bankrupt in which case, the American entrepreneur has to bear the consequences. In addition to that, outsourcing endangers the national security interests. One of the main causes of war that happened between the US and Japan in the year 1941 was the Japanese perception that her economic and industrial development was being unjustly hampered by the US as the US had restrained the supply of raw materials and technology into Japan along with restricting the export of goods out of the Empire.

Outsourcing of jobs to other