Question

What is meant by structural unemployment? Is there a relation between outsourcing and structural unemployment? Have you in your personal or professional life been affected by outsourcing of jobs? How were you affected?

Answer 1

STRUCTURAL UNEMPLOYMENT.

Structural unemployment occurs when there is a fundamental shift in the economy.It is a situation where there are jobs available and the workers are willing to work too,but the workers do not posses the required job skills to do the work.In other words structural unemployment arises when there is a mismatch between the skills of the unemployed workers and the skills required to perform jobs that are available in the economy.

There are many factors which give rise to structural unemployment.Usually structural unemployment occurs when there is a change in technology and the workers are unable to match up wit the new technological change and hence loose jobs as the do not posses the required skills to do the available jobs and the skills that they possess are outdated.

Another aspect which gives rise to structural unemployment is geographical barriers.In such a situation there are jobs available for workers but they are at far off geographical areas,where the workers are not willing to locate in order to get the job.

Wage is another factor giving rise to structural unemployment when there is a huge amount of cheap labor available the workers are offered jobs at lower wages,which they do not take as the amount of wage is lower as per their expectations.

Another rising reason for structural unemployment in the modern time is offshore outsourcing.It is a practice which enables companies to lower their cost by obtaining cheap labor in another country.Offshore outsourcing has caused the complete disappearance of certain industries from the US economy.

So there is a strong connection between offshore outsourcing and structural employment,as outsourcing to other countries makes jobs disappear from one economy and provides the same jobs to another economy.It is a cost cutting technique used by many companies which enable them to increase their profits.

The outsourcing trend has been followed by some of the biggest companies of the world,namely IBM,FedEx,Lennovo

I have not been a victim of offshore outsourcing personally,however i have heard of people living in the US who have lost their jobs to outsourcing.

There was a distant cousin aged 43 years old who worked as a computer programmer in a US firm,he was forced to leave his job as his employers had outsourced his job.So he was basically asked to leave his job for apparently no fault of his,He was good at his job,that is what he had done through out his professional life but he was jobless all of a sudden because of the outsourcing decision taken by the firm,as they were cost cutting and maximizing their profits.Not only him but it left a large number of his colleagues jobless too.Such situations affect personal lives too.People are either forced to remain unemployed which many cant afford as they have a family to look after ,or to take up any job that comes their way.Many of them are forced to work at jobs far below their standards or skills.