OUTSOURCING IN AMERICA

Megan Hennessy College of Dupage Elizabeth Anderson English 1101 12 December 2013

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Outsourcing in America Outsourcing is one of the largest problems America is facing today, even though not every American may know it. It is a controversial and real subject that everyone should understand the importance of. Outsourcing affects every American and the question of why America chooses to outsource the production of products to other countries and what benefits and disadvantages that causes for the US economy is the ultimate question. Outsourcing has an impact on America and its people; it hurts the economy, creates competition with other countries, puts the United States at risk and strips away opportunities for the present and the future. Outsourcing may have both advantages and disadvantages, but its disadvantages far outweigh its benefits. The main reason companies outsource is to cut costs, save money, and take advantage of tax breaks. Because other countries, such as China, can provide cheap labor, American companies have their products made there and shipped back here to sell. This only creates a short term gain in profits, because by outsourcing America is losing the very industrial base it was built on. If America continues to outsource, soon there will be no labor jobs in America and Americans will rely solely on foreign countries for their production of goods. American companies also do not realize that China and other outsourcing locations profit from outsourcing more, because they make their products in their own country and sell them in the United States, making their profit margins enormous. Also, in place of tariffs, more than 140 nations use a consumption tax called a value-added tax, or a VAT, to penalize imports and subsidize exports in order to meet their WTO obligations. The only developed economy on

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Earth that does not employ a VAT is the United States, and because of it, the United States is at a massive trade disadvantage (Moreland). The purpose of the VAT tax is to generate income tax to the government, similar to a corporate tax; if the U.S government took advantage of this tax, it could make a larger profit from the products made in China. The entire premise of outsourcing also brings up the ethical question, of whether or not it is ethical for U.S companies to make a profit on the poor labor used in many countries that the U.S outsources to. Slavery was outlawed a long time ago, but in some countries today, many people are still forced to work long, brutal hours in factories and sweat shops in order to produce the high end products Americans buy every day. Even small children are among the poor laborers used to produce products. Companies and most Americans know these facts, and yet they do nothing about it because without this cheap labor being available, products would have to be made elsewhere for a higher price and then sold at a massive increase. It is comical that many Americans detest the thought of foreign made products and basically attach the slogan Buy American to everything they say; but if it was not for all of these foreign made products, the cost of living in America would be higher and every product they buy would suddenly become much more expensive. The sheer loss of jobs and opportunities from American outsourcing is staggering. Outsourcing has caused over 830,000 American jobs to be exported to foreign countries (Hira), while leaving thousands of people unemployed and potentially putting millions more at risk for the coming years. Companies say that outsourcing will allow higher end jobs to come to the United States, but economists have yet to prove this theory. The Department of Labor reports that more than one in three workers who are displaced remains unemployed, and many

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of those who are lucky enough to find jobs take major pay cuts (Roberts). Outsourcing America even says that some people are forced to train their replacements before being laid off. The majority of jobs being outsourced today are in the fields of customer service, all areas of technology, and all areas of research, science, manufacturing and development of new products. Clearly, not all jobs being outsourced are labor jobs, but numerous white collar jobs as well. The government thinks that it is smart to outsource because it establishes a place for the U.S in foreign markets and is supposed to initiate free trade, but if foreign countries end up with all the benefits then it really is not a free trade. The government also expects Americans to spend money and keep the economy going, but if their jobs keep being taken away, then there is no way they can contribute to the economy. Outsourcing damages the economy more than contributes to it and it needs to be put under control before it is too late. The competition is heating up for world markets. As of now Americas biggest competitors are India and China. The majority of U.S jobs that are outsourced go to India, because of their cheap labor and advance in technology skills. The U.S entrusts jobs that are of utmost importance to India very often, typically research and development in micro technology; this is only a problem because it takes the edge away from America to be the best and have an advantage over all other countries. America prides itself on being the biggest superpower in the world, and it is, largely due to its influence and military power. However, what good is Americas might in todays technological world if one day the U.S is attacked by intelligence rather than forces? The U.S government needs to consider the consequences of giving away everything the U.S has, in exchange for short term profits. In the long run, America will benefit more from keeping its operations closer to home and out of the hands of

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competitors. If the United States gives all of its secrets to foreign countries, they could possibly use that against the U.S; which means our national security is threatened by outsourcing. By outsourcing, America is making itself a weaker country and in this unstable economy, that is not what is needed. Also by outsourcing high tech jobs to India that makes careers for students nearly impossible. Outsourcing America, says that university enrollment for technology fields will go down if there are no jobs for future careers; therefore not only are future technology careers for Americans disappearing but also the advancement opportunities for America. Alas it seems America is losing at its own game. The conclusions drawn about outsourcing above do not coincide with everyones opinion, but because they are derived from the facts, they are difficult to challenge. The facts from the book Outsourcing America and other resources hold value in the changes recommended, that should happen in America. Outsourcing is not beneficial in an unstable economy; it creates unhealthy competition with foreign countries, threatens United States national security, and takes away from the future generations to come and those now who are struggling to survive. Americans deserve the jobs that are rightfully theirs and a sense of security in their own country.

Link to photo story: http://photopeach.com/album/q5xuar The photo story demonstrates both sides to the outsourcing argument, even though in my paper I come out as being against outsourcing. In most ways I am against it, but I also understand the greater aspect of what it really means and why we do it. Without outsourcing, the American way of life would be much different.

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References Hira, R., & Hira, A. (2005). Outsourcing America. New York, NY: AMACOM. Moreland, J. (2013, July 18). The Outsourcing of American Jobs Hurts the Economy on Every Level. Retrieved December 12, 2013, from America's Economic Report- Daily website: http://economyincrisis.org/content/the-outsorcing-of-american-jobs-hurts-the-economyon-every-level Roberts, D. P. C. (2010, April 18). The Offshore Outsourcing of American Jobs: A Greater Threat Than Terrorism. Retrieved December 12, 2013, from Global Reseach: Centre for Research on Globalization website: http://www.globalresearch.ca/the-offshoreoutsourcing-of-american-jobs-a-greater-threat-than-terrorism/18725