Outsourcing A Boon or Bane - 4267 Words

Summary The increasing trend of outsourcing jobs from United States in recent years has created alarming unrest among American people. Politicians also believe that outsourcing has a negative impact on jobs, should this be allowed to continue, a prosperous future of all Americans is dim. These policy makers are exploiting this issue by introducing new protectionist policies. On the contrary, some economists have shrugged of the phenomenon as part of economic growth, as outsourcing benefitted U.S. economy by creating new jobs. In the article, the writer highlights the positive effects of outsourcing on the U.S. economy, as well as politicians’ ignorance on the long run benefits from it. Outsourcing is to move jobs that are currently being†¦show more content†¦productivity growth, the foundation of rising standards of living for everyone. They tend to create high-paying jobs—27.5 million in 2007. Consider that in 2007, the average compensation per worker in these multina tional firms was $65,248—about 20% above the average for all other jobs in the U.S. economy. These firms undertook $665.5 billion in capital investment, which constituted 40.6% of all private-sector nonresidential investment. They exported $731 billion in goods, 62.7% of all U.S. goods exports. And these firms also conducted $240.2 billion in research and development, a remarkable 89.2% of all U.S. private-sector RD. On the other hand: The unemployment rate is 9.6% Recent studies and analyses predict dire consequences should current trends continue unabated. What these reports make clear is that any work that can be digitized and transmitted through cyber-space is a target for export: * Forrester Research Inc. predicts that American employers will move about 3.3 million white-collar service jobs and $136 billion in wages overseas in the next 15 years, up from $4 billion in 2000. * Gartner Inc., a high-tech forcasting firm, estimates that 10 percent of computer services and software jobs will be moved overseas by the end of this year. * A survey by Deloitte Research found that the world’s 100 largest financial services firms expect to shift $356 billion worth ofShow MoreRelatedGlobalization: Outsourcing and Offshoring Software Creation Essay1208 Words   |  5 Pagesemployment, income distribution and economic growth? Is the outsourcing of services a different phenomenon than simply importing steel? Economic theory and past history point to the fact the trade provides net economic gains but if it also redistributes wealth, affects worker employment the short run and wages in the long run. It is easy to find literature that tells of the growth of the American economy with the increased use of outsourcing. It is however a different story when one asks the questionRead MoreOutsourcing and the US Economy Essay2349 Words   |  10 PagesOutsourcing – Dont Get Bangalored? As the world has gotten â€Å"smaller† in terms of trade, outsourcing has become a hot topic in much political and economic debate in the United States. An Associated Press-Ipsos poll in May 2004, found that 69 per cent of Americans thought that outsourcing hurts the US economy while only 17 per cent thought it helped . 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(1990) The Fifth Discipine: the art and practice of the learning organization, London: Century Business. Starkey, K. (1998) ‘Durkheim and the limits of corporate culture: Whose culture? Which