Offshore Outsourcing Essay

1731 words - 7 pages

Abstract This paper will discuss offshore outsourcing and the effects it has on the American worker in a technology environment. We begin with the scope of the problem and how it has changed the economy for better and for worst. Various figures representing miscellaneous data about off shoring will be represented. The topics include the background and nature of offshore outsourcing, reasons for outsourcing, why trading promotes gain, current economic standing from outsourcing, and finally how outsourcing affects wages and employment. In the summary various solutions and ideas are given to propose a change to the industry in hopes that the American worker will be more prosperous from ...view middle of the document...

S. highly dependent on other countries. If those countries decide to cut the cord, there will be no product creating a loss. Many new proposed laws for 2011 are in the workings to minimize these issues, with regards as to how the government would like to handle them. Outsourcing in the near future will be focused on smaller projects while using more suppliers. A reduction in large contracts is the goal for many, which in turn will leave more opportunity for entrepreneurs and even larger organizations. The benefit is, more options will be available and the contracts can be closely manipulated for the good of others. Offshore Outsourcing in Technology with Regards to the American WorkerDisposition of Offshore Outsourcing The United States is one of the largest powers in the world when it comes to offshore outsourcing. However, many economists wonder if it is actually beneficial or destructive to the American workforce. One of the more predominant reasons outsourcing has become popular is due to overall savings of costs. These cost savings have proven to raise overall productivity, and have allowed everyone from small business owners to corporate giants to advance into the next generation of technology. Some economists classify offshore outsourcing as international trade between countries leading to a large profit margin for both parties included. Gregory Mankiw is an American Macroeconomist that served as chairman on President Bush’s Council of Economic Advisors from 2003 to 2005. It is still to be determined what the feelings on outsourcing will become in the future. In the past the contracts have always been quite large, leaving little to no room to negotiate for the average blue-collar worker. A poll was taken in May of 2004 that estimated sixty-nine percent of people in the United States believed that the outsourcing of technology ruins the economy. Only seventeen percent of that poll group alleged it helps the economy. Reasons for Outsourcing When top business professionals are asked, why do you outsource work? The answers are usually held within certain vicinity. Risk reductions can be kept to a minimum by outsourcing because costs can be shared by service providers. For instance, if someone purchases a cellular phone from the local Sprint store, their technical support help line may connect them with someone in India. This practice allows the company to pursue more “high end” technological advances in the industry. This type of scenario creates profit for the company, but usually lacks in the customer service support area. Tax breaks are another main reason companies decide to outsource. Through various Federal Laws, payments on profits that are earned overseas can be deferred; as long as indefinite time guidelines are followed. The taxes for this type of event are to be paid only when the earnings are restored to the United States. These types of laws strongly promote outsourcing, and drive jobs...

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