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Friday, June 8, 2012

Outsourcing: The Global Phenomenon

Outsourcing has become a topic of discussion that many Americans have strong opinions against. Outsourcing is defined as taking American jobs and giving them to workers overseas in order to reduce labor costs. This seems like a great deal for big corporations, but it also contributes to the growing unemployment rate in the U.S. today. More and more companies have turned to outsourcing which has helped their business grow exponentially. Since outsourcing has been trending in so many companies, more businesses look to outsourcing when trying to expand their business. The major countries to take on such American jobs are China, India, Mexico, and Japan. These countries experience a great deal of exports because of outsourcing, while companies outsourcing increase their profit margins concurrently.

Depending on one's point of view, many positives and negatives can come from outsourcing. The positives often benefit the big companies while the negatives usually constrain American workers. A common question asked when deciding whether or not to outsource, "Why does it work so well?" Outsourcing allows companies to lower costs in all facets, including labor, production, and energy. The problem with lowering costs to earn better profits is that the quality of the work may be compromised. Businesses focus on making money rather than worry about distributing a product or service that will last due to inefficient quality. Americans inevitably lose their jobs to these factory workers overseas, putting them out of work and reducing openings in higher paying jobs. Outsourcing began popular during the Clinton presidency, and in 1994 NAFTA (North American Free Trade Agreement) was also put into place. Clinton deployed this bill to open trade routes between all countries, benefit ting the United States first. Once this went into effect, many companies moved their factories to close bordering Mexico and Canada. Over the years companies have expanded outwards, looking for cheaper labor across the globe in order to profit their company.

China, India, Mexico, and Japan have burst onto the scene for developing American products and services. Producers of clothes, shoes, cars, and many others have moved their factories to outsource a product. Services such as Comcast or Verizon outsource their customer support overseas to lower administrative costs. All countries have the common factor of cheap labor to hang its hat on. Though many blue-collar jobs get shipped overseas, there has been a growth of white-collar jobs also. It is projected that by the year 2015, there will be 3.3 million American white-collar jobs outsourced to different countries. This number has grown immensely over the years and will continue to grow with all the success sustained around these companies. Not is all dandy for companies that outsource, as some run into industry problems. The first problem many companies face when outsourcing is a language barrier. Though this may not come off as a big deal, many companies have problems communi cating goals and techniques to foreign workers. Often the language barrier can cause problems with quality and could cost the company in money, time, and resources. To limit outsourcing, it is important for American jobseekers to strengthen their skills and knowledge so that more jobs are forced to stay in house. Globalization will continue to have a major impact on how American companies run their business and with outsourcing as a viable alternate to American workers; there is no telling how many jobs could end up overseas.

In conclusion, outsourcing has changed the way businesses run in present American society. Many Americans have to fear the worst and often worry if they will lose their job because of cheaper labor offered elsewhere in the world. Competitive markets will always exist in the United States, and for competitors to gain an edge, lowering labor costs by outsourcing are a plausible option. Outsourcing does not just affect blue-collar workers but now affects all workers involved in white-collar and high paying jobs. In order to withhold some of these jobs, it is important for Americans across the country to continue to educate themselves in order to find new innovative ways for companies to save money. By developing skills that foreign workers do not have, American workers will become a commodity again. Over time, it is expected that wage rates will rise because of business cycles, and countries such as China, Mexico, India, and Japan will be relied on less for labor work. Outso urcing will continue to be a topic of discussion politically and economically as companies continue to try and better their own business each day.

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