Title: The Unintended Consequences of Outsourcing
Headings: The Unintended Consequences of Outsourcing
The Unintended Consequences of Outsourcing
Outsourcing Lowers Barriers to Entry and Increases Competition
Outsourcing Erodes Company Loyalty
Outsourcing Can Eliminate Jobs From the Domestic Workforce
Outsourcing Affects Insourced Countries
The Bottom Line
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Content: It refers to the staggering economic decline, population loss, and urban decay caused primarily by shrinking the domestic industrial sector throughout the Northeast, Mid-Atlantic, and Midwest. 2 ﻿
Outsourcing Affects Insourced Countries
The rise of the Chinese middle class in the past few decades has been attributed, in part, to its rise as a global exporting powerhouse. 3 ﻿ But as more work is outsourced to that country, Chinese workers will begin to demand higher pay. The ripple effect predicts that China's competitive low-wage advantage will eventually be eliminated, and the boost to economic production that resulted will also depart. Outsourcing also takes labor out of the workforce of a country and sets laborers to work doing tasks that may not be critical to their own country's development or growth, but pays better nonetheless. People may be enticed to leave agrarian or cottage industries to earn more money in a city as a call center operator. And what happens when there are no more cheap labor regions to exploit? Companies may then turn to technology to replace workers causing unemployment of unskilled labor abroad as well as at home. The influx of investment from abroad, especially for manufacturing, can also lead to a glut of factories that spit out pollution and carbon dioxide into the atmosphere, negatively affecting the health of workers and nearby communities. To try to offset the increase in pollution, China is planning to institute a national emissions trading system, whereby CO2 credits can be traded with other countries.