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Friday, June 22, 2012

Outsourcing of Jobs having Negative and Positive Effects

Growing up in a small town, people were not really worried about outsourcing of jobs because most people worked at distribution centers in surrounding areas, local businesses of various sorts, and many even at the school district. Most of the men in the town worked at the local cement plant that had many contracts from all over the Northeastern United States.

Even when I was in high school in the late 90s early 2000 I never heard my teachers tell me about outsourcing of jobs being a problem. Many of my fellow students were not aware of it either when picking their majors they wanted to pursue at the universities they planned on attending. Some of the people that recently graduated from school with four year degrees cannot even find jobs in those professions.

It wasn't until I was near high school graduation that I heard of outsourcing of jobs and job security. I planned on attending the Pennsylvania State Police Academy after I met the minimum requirement to start the process of gaining acceptance into the academy. I was told that this was an excellent profession to pursue because it was a job that was guaranteed to remain in the United States since no matter how the economy was; we as American citizens needed people to enforce the law.

Today's world has changed drastically from when I was in High School. Now that I have become interested in the business world and currently pursuing my B.S. in Accounting, I have heard and read many articles of how outsourcing of jobs is hurting many Americans. But this has been the case for awhile. This outsourcing of jobs can be looked at with an example of the production of a Barbie doll and how certain parts of this product being outsourced to other countries.

The Barbie doll production is started with the raw materials such as the plastic and the hair coming from Taiwan and Japan. This is then shipped to Indonesia and Malaysia for assembly of the Barbie dolls. The mold and paint that are used for the dolls are made in the United States. The clothing on the other hand is outsourced to China. All of these finishing products for the Barbie doll are then shipped to Indonesia and Malaysia to complete the assembly process (Grossman and Helpman).

As you see above, most of the labor that is used comes from the Asian region. This area is known for its labor being the cheapest labor in the world. Many United States companies follow this model of getting its parts or even assembling of their products in these parts of the world to reduce costs to offer a cheaper product. If most of the products that we buy in the United States were to be made here, many Americans would not be able to afford them due to how high our standard of living is and how the wages have increased here in the United States.

Along with how United States companies produce products in the Asian labor force the same can be said with our own continent. With the North American Free Trade Agreement implemented in 1994, this removed a lot of the trade barriers that were in place with the countries of Canada and Mexico (Dept. of Agriculture). This first started with agricultural goods coming in from Mexico and Canada but now NAFTA became fully implemented in 2008, a lot of products are now being made mostly in Mexico.

This is why manufacturing jobs that were once in the United States are being shipped just below the boarder in Mexico. An example of this would be that of a Whirlpool factory that is located in Mt. Vernon, Indiana (Stuffman). The factory employed around 1,200 workers. They have recently shut down operations and moved it into Mexico. With the loss of jobs for those 1,200 people, they have lost their decent wages, benefits, and their quality of life. For most of them, they have lost the rest of their lives because many of them will not be able to retire anytime soon and also will not be able to find a job that will pay well (Stuffman). Most will be stuck working at poverty-line jobs.

With all of the American jobs being outsourced to other countries, it is up to us as a nation to develop the quality employment that is needed for Americans to maintain a basis of living. Even though it is not a good thing when jobs do leave the United States, We have to look at it as being able to afford a lot of the products we do have in our homes. It is up to us as a nation to develop jobs that will not be outsourced out of the United States.


Grossman, Gene M. and Helpman, Elhana. "Outsourcing in a Global Economy." The Review of Economic Studies,Vol 72, No. 1 (Jan. 2005), 135-159. JSTOR. Web. 8 November 2010.

Acuff, Stewart. "Corporate America Offshoring More Jobs in Economic Crisis." The Huffinton Post. Web. 6 November 2010.

United States. Dept. of Agriculture. Foreign Agriculture Services. "North American Free Trade Agreement." Web. 6 November 2010.

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