Offshoring - Essay Example

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Article Summary Abstract: The problem under study is the root cause and remedies for low income and income inequality related issues arising mainly from offshoring. The idea is to recommend measures for improvement. The paper written by Alan Blinder focuses on the existing problems associated from offshoring in the US labor market and its various reasons, implications and solutions…
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Download file to see previous pages The work of Robert Reich focuses on different reasons of growing poor and rich discriminations in the US. This paper identifies various reasons and discuses their further reasons and consequences. It then tries to evaluate some policies which are needed to prevent the unexpected situation of income inequality. And the last paper, Roger LeRoy Miller, Daniel K. Benjamin and Douglass Cecil Northfocuses on the various facts and figures of prevalence of poverty in the US and suggests several policies which are needed to be implemented by the government to restrict the situation. The problem of low income and income inequality mainly arises from offshoring and calls for appropriate policies from the side of the government Blinder: The main purpose of his work is to relate the concept of offshoring with the US labor market and to understand its problems and possible solutions and effects. The key question of this paper is how to prepare the future labor force of US in the face of rapid offshoring of US companies. Over the last few years the demand for labour has shifted from technologically low skilled, less educated people to high skilled and well educated people. This led to income inequalities in the US.Hence, policies were needed to be applied. In the 1990s, the United State Congress has used the policy of raising the minimum wage and has increased the Earned Income Tax Credit (Blinder, 2009, p. 9). With the combination of the tight labour market, these policies have raised disposable income of the average workers and have improved their living conditions. But the basic assumption behind this success was that there was not any labour migration during this time of policy evaluation. The major future challenge for the US is “offshoring”. In the US, service sector offshoring has not been that much significantly higher; only 1% of the total services jobs have been offshored so far (Blinder, 2009, p. 10). There can be three basic reasons for more increment in the offshoring of services jobs. First, there are more absolute numbers of services jobs compared to that of manufacturing jobs. Second, technological advancements are more related with the growth of services jobs. Hence, recent developments in technologies have caused this difference in the growth paths. And finally, the labor market of India and China are more consistent with the technologies related to services jobs.The author has distinguished between two types of facts that are responsible for offshoring – personal and impersonal reasons. This is the most important information that the author has pointed out and this is the key idea of the whole paper. In this context the author suggested few points that are needed to be considered while preparing the future labor force of the US- putting more emphasis on education of children, focusing on one link (like technology) at a time and differentiating between novel differences with the traditional differences in jobs.One of the possible implications of these policies is that there would be huge income differences, not in terms of educational level, but also in terms of the skills that workers have. But in the future education will not become constrained. For public jobs, increases in the salary scales can work well in this regard. Again, some o the jobs are lacking proper training ...Download file to see next pagesRead More
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