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Affect Of Off Shore Outsourcing

Submitted by gj1234 on December 23, 2007

Category: Business
Words: 1182 | Pages: 5
Views: 120
Popularity Rank: 87,190
Average Member Grade: N/A (Add a Comment / Grade this Paper)

Off-shoring is affecting the U.S. economy greatly. Off-shoring is taking away jobs from the American people causing a rise in the unemployment rates. Not only is off-shoring taking away jobs, but it is making it harder to find new jobs. It needs to be considered that jobs are not the only thing being shipped out, but Americans' personal information as well.
Off-shore outsourcing is when a company sends work overseas. One main reason is to cut costs and save a certain amount of money by paying less in wages. Off-shoring has become more common since the 1990's. What would a person do if his job was taken away and given to someone else in another country? The most common jobs that are outsourced are manufacturing jobs but many corporations are now moving white collar jobs, mostly Information Technology (IT) jobs, overseas. This is causing the value of the American IT Employee to depreciate and making it harder to compete for these jobs. Universities are starting to train around globalization to make IT students more knowledgeable on global economics. Outsourcing overseas is also causing unemployment rates to climb.
Starting late 1990's, due to Internet bandwidth becoming affordable for transmission of messages containing tables, graphs, images, audio, and video, it has increasingly become feasible to outsource IT Enabled Service to offshore countries (Ahlawat & Ahlawat 2006). Some of these jobs are high waged positions that are provided from some financial services and insurance companies. These employers found that they could cut costs by paying lower wages. The minimum wage in the U.S. is much higher than the going rate of China or India, which are the two major countries that receive off shored work from the U.S.

Off-shore Outsourcing 3

Ahlawat & Ahlawat found that from 1999- 2002, the number of manufacturing plants in the U.S. had declined by 20,000 while U.S. multinationals opened 246 facilities in foreign...

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