Tuesday, March 29, 2011

The Costs of Outsourcing


Outsourcing jobs seems to be something that is here to stay in the U.S. today, the question is: is this a good thing or not?  Outsourcing is basically sub-contracting a process, especially part of a business or company, to a third party outside supplier.  It is about obtaining goods or services from outside or foreign sources instead of from internal sources, especially to contract work out or abroad. 

There are significant effects, some positive and some negative on our economy when work is outsourced.  Outsourcing jobs outside of a particular business can actually be good because it would allow a business that is not expert at something to contract out that part of their business to a company that specializes in what they need done.  For example, a small business might outsource their bookkeeping to an accounting firm that can keep track of their finances.  This can still be done internally, that is within the United States.  However, the other side of outsourcing is when large companies and businesses outsource outside of our country to foreign suppliers of services.  In this case, jobs that could be done internally in the U.S. are being done in foreign countries.  For instance, some of the biggest outsourcing locations are India, China, and Brazil.  Some people say that this will help the third-world countries to develop and increase their employment opportunities, but with the problems our economy is having, the focus should be on our own problems with jobs and how to alleviate our high unemployment rate.  Limiting the amount of jobs that are outsourced to foreign countries could help our job situation in the U.S.

President Obama, during his 2008 campaign, promised to stop giving tax breaks to companies outsourcing jobs overseas and to start giving them to companies creating jobs in the U.S.  Those who oppose outsourcing worry that the President will not uphold these promises and is not going to do anything at all.  These critics believe this is mostly because many of the President’s economic advisors outsource jobs themselves or are unconcerned about the effects of outsourcing.

As companies continue outsourcing to foreign countries, there continues to be a large-scale job loss in the U.S. as jobs are transferred to these off shore services.  There could also be confidentiality or security dangers with having people’s private information and sharing this information with a third-party.  This is especially true in regards to IT outsourcing.  There are also potential negatives for the businesses engaging in the outsourcing, particularly if they do not do proper research on a foreign third-party company before allowing them access to their clients.  This could include the confidentiality issues, problems with the quality of service, or even negative publicity, which could occur because outsourcing is becoming an increasing concern to average citizens.

Overall, outsourcing seems to only benefit the wealthy that gain profits from transferring jobs. What good has come from foreign outsourcing except corporate profits?  It has lead to American citizens losing jobs due to this outsourcing of their work and therefore higher unemployment in the U.S. and has also contributed to our weakening economy.

1 comment:

  1. The follwing is a commentary on this blog post, and can be found here:
    http://presidentialinbloguration.blogspot.com/2011/04/classmate-blog-commentary-costs-of.html

    Jessica Cosper's blog post entitled "The Costs of Outsourcing" had a good ratio of information to opinion. While Cosper's stance on the issue is established in the second paragraph, the bulk of the article presents information and reserves the persuasive part for the conclusion. After the information is introduced and taken into account, an opinion is given. As a result, much of the article read more like a news story and less like an editorial, but that is not necessarily a disadvantage. I personally like the fact that the article was not littered with appeals to the reader. Persuasive appeals can often be heavy-handed, and too much or too emotional of an appeal can sometimes be more polarizing than persuasive.

    As for the actual content, I found it to be informative. The issue of confidentiality and security risks is one that does not seem to be among the conventional talking points regarding outsourcing, but one that bears importance as US companies share their customers' private information with third-party agencies in nations that may not have the same standards and regulations regarding privacy and consumer protection. The article does a good job of covering some of the different outcomes of outsourcing, an mentions China, India, and Brazil as top destinations for outsourced jobs, but a few more facts or statistics could have provided readers with better reference points regarding the argument. For instance, as I read some questions occured to me, like, "Besides IT, what are some of the jobs that are most commonly outsourced?", and "What are some of the estimated costs and jobs losses associated with outsourcing?"

    Overall, the author seemed well informed on the subject. Whatever the article may have lacked in depth of information, it made up for in comprehensiveness. The opinion expressed was sound, and its tempered delivery kept the tone of the article from coming off as overly subjective.

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