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Outsourcing Of American Jobs Hurts The U.S. Economy

Outsourcing is a growing business practice among modern corporations. The idea of outsourcing is for the organizations to benefit from shared expertise, skills, reduced labor, and productions costs. Apparently, outsourcing is a strategy used by organizations to access foreign markets. Organizations that seek competitiveness in respective industries have resorted to outsourcing non-value adding activities. In this regard, the organizations outsource functions to experts located in foreign countries at a reduced cost. There are concerns that the current market factors have promoted outsourcing in the United States. The cost of manufacturing is high and does not allow competitiveness as evidenced from other economies. Although outsourcing is now a global phenomenon with significant benefits, lost jobs are a disadvantage to the economy.

As mentioned earlier, the firms in the United States are outsourcing industrials jobs to organizations based in China, Mexico, Brazil, Indian and other fast developing countries. The cost of productions and labor in such countries is lower compared to the standardized minimum wages in the United States. Therefore, it is logical to outsource operations irrespective of the increasing unemployment in the United States.

Outsourcing industrial jobs as a strategy of matching the growing demand for consumer goods in other countries does not compensate the lack of income among domestic workers. From this perspective, the national economy requires a stable source of income for local workers. However, lost job opportunities for American workers translate into reduced consumption rate.

According to Jones, the current market regulations do not protect the economy from adverse outsourcing effects. In this context, foreign investors have access to millions of American consumers without adequate regulations. For example, the Unite States does not subscribe to a Valued-Added Tax (VAT) policy. From this perspective, the country continues to suffer from lost revenue and trade disadvantage.

In conclusion, it is important to acknowledge that most of the outsourced jobs are semi-skilled in nature. In this regard, manufacturing, service and technological industries lead in outsourcing of American jobs. Individuals, families and communities that depend on these firms suffer from limited job replacements. For years, the economy of the United States has remained under the threat of unemployment and social problems such as poverty. For example, unemployment in the United States is attributed to the increased individual debts, illiteracy, high cost of health and poverty. Therefore, outsourcing has an adverse impact on the economy as the government tries to provide quality education, accessible health care and affordable housing amenities.