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Trends in Labor in the United States - Assignment Example

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Globalization has paved the way towards the rise of outsourcing for most corporations. Outsourcing is “the contracting or subcontracting of noncore activities to free up cash, personnel, time and…
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Trends in Labor in the United States
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Trends in Labor in the United s Trends in Labor in the United s One of the major effects of globalization is in the area of employment. Globalization has paved the way towards the rise of outsourcing for most corporations. Outsourcing is “the contracting or subcontracting of noncore activities to free up cash, personnel, time and facilities for activities in which a company holds competitive advantage (BusinessDictionary.com, 2013). There are several reasons why there is a dramatic increase in outsourcing. First, some countries lack the labor expertise in some areas of their business processes; thus, the need to subcontract the job to people who has the proficiency to perform such tasks (Flatworld Solutions Pvt. Ltd., 2013). Another factor that contributes to the growth of outsourcing is the availability of cheaper labor offered by some countries, without sacrificing the quality of the products or services (Flatworld Solutions Pvt. Ltd., 2013). Aside from work expertise and cheap cost of labor that a company can gain from outsourcing, their resources can be focused on the more essential aspects of their business.
Outsourcing presents several advantages and disadvantages for both corporations and the domestic economy. Some of the advantages of outsourcing are the swiftness and expertise of the outsourced labor, the concentration on the crucial business processes rather on the minor ones, the risk sharing between the outsourced vendor and the organization outsourcing and the reduction in the operational and recruitment costs (Flatworld Solutions Pvt. Ltd., 2013). Outsourcing has its drawbacks too. These include the risk of exposing the organization’s confidential information, lack of control with schedules and delivery times, possible hidden costs and a lack of concern for the customers’ needs (Flatworld Solutions Pvt. Ltd., 2013).
A significant effect of outsourcing on the US labor market is the rise in the unemployment rate among Americans. The technological and engineering jobs are mostly diverted to India and China which offers lower wage rates but matched with superior talent (Miah, 2007). The bottom line for most companies is that outsourcing gives better profits. Nationalism is put aside because the business decision makers consider their responsibility to their shareholders the priority (Miah, 2007). The result of this attitude is the American working middle class are up in arms against outsourcing (Miah, 2007).
Another major effect of outsourcing on the US labor market is the weakening of the workers’ bargaining power. Since it is very easy for companies to outsource their labor requirements, workers are sometimes forced to accept lower wage rates and less benefits so that management will not think of outsourcing.
Outsourcing reduces union membership because jobs are transferred from union members to non-union members (Perry, 1997). On the other hand, it may also increase union activism through merger activities and political actions (Perry, 1997). Furthermore, unions try to organize themselves so that wages are standardized in the market and work conditions are not sacrificed despite the threat of outsourcing.
Outsourcing has diminished the chances of Americans with minimal skill jobs, to be employed because these are the jobs that are often outsourced by corporations (Conjecture Corporation, 2013). Recently though, even the middle-class are unable to find work because of outsourcing (Conjecture Corporation, 2013).
References
BusinessDictionary.com. (2013). Outsourcing. Retrieved from businessdictionary.com: http://www.businessdictionary.com/definition/outsourcing.html
Conjecture Corporation. (2013). How does outsourcing affect the U.S. economy? Retrieved from wisegeek.com: http://www.wisegeek.com/how-does-outsourcing-affect-the-us-economy.htm
Flatworld Solutions Pvt. Ltd. (2013). The advantages and disadvantages of outsourcing. Retrieved from flatworldsolutions.com: http://www.flatworldsolutions.com/articles/advantages-disadvantages-outsourcing.php
Miah, M. (2007, August 6). Outsourcing and the unions. Retrieved from globalenvision.org: http://www.globalenvision.org/library/3/1712
Perry, C. R. (1997). Outsourcing and union power. Retrieved from link.springer.com: http://link.springer.com/article/10.1007%2Fs12122-997-1020-9?LI=true Read More
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