Title: Outsourcing: The negative effects
Headings: Outsourcing: The negative effects
Outsourcing: The negative effects
Content: If the United States is not manufacturing the technology they need, then they are buying it from countries that are, leading to a trade deficit (Nothhaft)
The practice of outsourcing has greatly affected employment aspects in the United States. American companies have hired people from foreign countries tha.t are highly skilled, but were willing to accept lower salaries, resulting in hundreds of thousands of American people being without a job, in particular the semi-skilled and skilled workers. The effects of outsourcing has made it even more difficult for American people who are at or below the poverty line that willing to do minimally skilled jobs, to find employment. Outsourcing can lead to levels of poverty that hasn’t been experienced since the Great Depression of the 1930’s, resulting in reduction of consumer spending and tax revenues (Saleem). Jobs that are being outsourced to developing countries such as China and India must abide by U.S. safety laws and regulations, and this is where the issues with outsourcing begin to take shape. Most companies assume that by sending jobs overseas, resulting in the losses of hundreds of thousands of jobs and high unemployment, they would achieve cost savings. However, The American companies themselves do not benefit from it, according to Jim Pinto, an Industry analyst and founder of Action Instruments. The problems with outsourcing is that with cost expectations, wage comparisons do not compare to savings. In terms of transfer costs, it is very time consuming to train foreign employees who are highly skilled, but don’t understand the rule and policies of the company. Security is a big issue with companies as there are potentially high risks for Information Technology security breaks.