Outsourcing. Good or Bad?

In the articles “The outsourcing Boogeyman”, and “The Future of Outsourcing” a positive picture of outsourcing due to globalization is painted. They presented a view of how outsourcing actually increases jobs in both foreign countries and in America itself. Many corporations are using outsourcing in one of their business sectors to increase productivity. The articles also explain how outsourcing is actually increasing better positions in the Unites States as well as helping companies expand their businesses. Inc today’s society, growth is mandatory to survive and compete. The critics of unemployment say that outsourcing is the cause, but the technology advances have more impact on jobs than the outsourcing.

In both of the “Bogeyman” and “Future” articles, the companies that are using the outsourcing are producing more goods with fewer costs. This allows the bottom line profit to be greater. With more profits, corporations are able to put more money in other sectors within the business, thus creating more American positions. The other piece of the puzzle is that some positions cannot be outsourced. For example, you can’t get a hot meal for dinner from China. Some services will always be local. The other advantage to outsourcing that the articles address is that more final products will be exported to other countries now that their citizens will have the financial means of purchasing the product. This money allows for greater supply of products and a larger workforce. The demand for a product increases; therefore, the supply increases. The only way supply increases are through a larger, more productive workforce.

Like protectionists, some economists and consumers do not look at the whole picture. In a recent USA TODAY article, outsourced labor sometimes creates products and services that do follow the same stick rules that toys made in the United States follow. I chose this article, because it illustrated that people are “scared” of foreign markets instead of working to understand them. The article explained that much of the problem was in the initial design (U.S. workforce) of the toys instead of the outsourcing issues.

After studying economics in both high school and these first few weeks of college, I have a much different viewpoint on outsourcing. I have always looked at outsourcing on its media hype, “It is taking American jobs!” These articles and this class have helped me recognize that outsourcing, along with other economic strategies, can be an asset as well as a liability. The idea that a Penske truck can have a document sent via an 800 number in 30 minutes from outsourcing creates a more efficient workforce in the United States. This increases our workers productivity as well as our wages. Competition is the key to surviving. A company needs to us the resources they have to become more efficient. For example, a restaurant Reading can concentrate on cooking better food and serving their customers, instead of operating a back office for paperwork and payroll. The chef/owner can outsource financials and do what he loves most, cook! By becoming a better chef and having his payroll outsourced, there is now a chance that someone from India could have the financial means to visit his restaurant in the United States.

I now understand that an open economy triggers economic growth. I have seen the under layers of outsourcing. Outsourcing to me is outgoing and growing. It may take a few years, but ultimately our international economy will hit an equilibrium that is good for our foreign neighbors and the United States, After all, isn’t our ultimate goal as humanitarians to solve the world’s problems? By expanding with our neighbors, some of their economic issues we need to support will be supported by their own economies.