Question

What are your views on outsourcing? Do you think it hurts or helps the U.S. economy?

Answer 1

Work outsourcing lets U.S. companies make the global marketplace more competitive. This helps them to sell international branches to foreign markets. We keep the labor costs down by recruiting on lower living standards in emerging markets. Which reduces the prices of the products which they send back to the USA. Outsourcing's principal negative effect is that it increases U.S. unemployment. The 14.3 million outsourced jobs are more than double America's 5.9 million unemployed. If all those jobs returned, hiring the 4.3 million who work part-time but would prefer full-time positions would also be enough.

That assumes the jobs could actually go back to the US. Most foreign employees are employed for local publicity, communications and language assistance. It also means that the unemployed here possess the skills required for those positions. Imposing legislation that effectively limit outsourcing of jobs may make U.S. businesses less competitive. If they're forced to hire costly U.S. employees, they'd raise prices and raise consumer costs.The incentive to outsource could even cause those companies to move their entire operation, including headquarters, overseas. Others may not be in a position to compete with higher costs and are forced out of business.

Lots of call centers have been outsourced to India and the Philippines over the past 20 years. That is because English is spoken by the workers there. But the trend is shifting. Unlike outsourcing technology, the wage discrepancy between call center workers in the USA and emerging markets is much smaller. In India, incomes began to catch up to those in the United States, thanks to the Great Depression. Just 15 per cent more than their counterparts in India make average call center staff. As a result some of these workers are returning.

Workers had been replaced by robots in many manufacturing industries. Workers need the training to control the robots in order to get new jobs.Technology innovations are what really allowed U.S. businesses to move call centers to India. If technology is the culprit, then that is the answer as well. As a country, it's made the USA more competitive. Education is the best way to both take advantage of the technologies and create jobs for U.S. citizens, rather than protectionism.