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The Implications of American Outsourcing - Essay Example

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Outsourcing, which is commonly defined as a distribution of jobs outside of a company's core of operations, especially in relation to labor allotment in other countries, has initiated a lot of controversy both among American employees and Corporate heads. Employees fear that such a trend puts their jobs at risk, while Corporate proponents argue that outsourcing significantly cuts costs, which will eventually be passed on to the consumer when purchasing goods…
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The Implications of American Outsourcing
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Download file to see previous pages Over the years the American economy has taken a drastic turn for the worse, especially in the realm of job sustainability. In a study conducted by the University of California, "14 million white-collar jobs are vulnerable to being outsourced offshore" (Roberts, 2005). These include jobs requiring a high-level of skill including "information technology, accounting, architecture, advanced engineering design, news reporting, stock analysis, and medical and legal services" (Roberts, 2005). According to another study done by EconEdlink, America's unemployment rate has increased alarmingly since 2001, after having experienced a period of substantial lows throughout the mid-90s. After that the unemployment rate remained somewhat steady, with a spiked increase between 2003 and 2004 followed by occasional yet not extremely noteworthy decreases. (See Figure 1 & 2 for a visual depiction of this phenomenon).
How can outsourcing be justified in the face of such figures To make matters worse, many of the persons displaced by outsourcing are those who have spent a great deal of time, money and energy at colleges or other academic institutions trying to acquire specialized skills. When education can no longer offer assurance for an individual's financial future, "the value of the investment in training, and in the individual, to promote growth in America's society, and economy, is diminished" (Torrance, 2006). In fact, it is not too uncommon to hear IT graduates mumble about how there are so few jobs available because the jobs they were trained to do are now being exported (Torrance, 2006). Consequently, professional workers affected by outsourcing must consider either negotiating lower wages or changing their vocation completely. The former option seems unrealistic especially considering "businesses who are outsourcing can set a minimum wage in developing countries that would never be accepted as a minimum wage in America" (Torrance, 2006). The latter option only exists as long as there are industries that are willing to do business primarily in the United States. If other companies also believe outsourcing will improve their profitability, then where can the American worker turn
Outsourcing proponents argue that even though outsourcing may take a few jobs away initially, in the long run it will put more money in America's pocket by lowering the cost of consumer goods and services. It will help create a sector of jobs more reliant on management and creativity than a fulfillment of 'worker-ant' responsibilities. All of this could be true as long as some form of employment remains available for Americans to earn money for spending. However, if everyone outsources it will get to the point that reduced costs won't matter because Americans simply won't have the money to ...Download file to see next pagesRead More
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