Title: Outsourcing: The negative effects
Headings: Outsourcing: The negative effects
Outsourcing: The negative effects
Content: According to Wily Shih and Gary Pisano, professors at Harvard University, “40 years of outsourcing will deprive the US of the means to invent new high-tech products that are very important to help better the economy” (Nothhaft). Companies such as General Electric, Caterpillar, Microsoft, Chevron, Cisco, Intel, Stanley Works, Merck, United Technologies, and Oracle had cut their workforce by 2.9 million people over the last 11 years, while at the same time increased hiring input overseas to 2.4 million people. Halogen Corporation, a company that specializes in Finance outsourced Transaction processing, Automation and Compliance solutions, found that the largest percentage of jobs needed that are being outsourced is Information Technology, which is at 28%. The next largest field is human resources, which stands now at 15% and is closely followed by Sales and marketing at 14% and financial services at 11%. The other 32% comprises of different industries. Forrester Research predicted that by 2015, 3.3 million American jobs and $136 billion in wages would be outsourced to developing countries such as India, China, Indonesia and Russia. Meta Group has estimated that by 2015, Outsourcing would have then become a $25 billion market, making those developing economies successful and the U.S. economy scarce (Moyers). Federal and State Governments should impose laws banning outsourcing of all industries and Government work. Tax Laws should also be imposed, encouraging the American companies to keep all the jobs in the United States or risk losing any or all incentives that they benefit from just by being in the US. When a job is sent overseas, all that potential tax revenue is lost and as a result, the US Government would have to pay uneployment benefits to each and every employee that lost their job because of outsourcing, thereby impairing the Government’s ability to fund education and other services for its citizens.