Outsourcing is a controversial issue in the US. Supporters argue that it saves companies money, creates job opportunities, and improves trade relations, while critics claim it deprives Americans of jobs and reduces tax revenue. Outsourcing also affects those with minimal job skills, leading to poverty and reduced consumer spending. However, outsourcing can also benefit less developed countries and improve political relations. The issue remains difficult to solve, but some suggest taxing companies for outsourcing and rewarding them for keeping jobs in the US.
How outsourcing affects the US economy is a matter of great debate. For those on the political right, this practice will have an overall positive effect on the US economy, as it saves companies money, opens up opportunities for more entrepreneurship in the US, and leads to more Americans filling higher-level jobs. Critics suggest that the hiring of foreign workers has an immediate effect on the US economy by depriving many Americans of jobs they would have held, particularly from semi-skilled or skilled workers. The way companies are taxed based on outsourcing can reduce a company’s tax liability and therefore decrease federal spending.
Both sides on this issue, and all those who seek to walk a middle ground between the two sides, have valid points. It is true that outsourcing has led to job losses in the United States and has had a detrimental effect on those people who may be only minimally qualified to work. It is also true that there are many skilled labor jobs that are outsourced overseas. The loss isn’t just for people with minimal job skills.
One problem for those Americans who are impoverished and could take jobs with minimal skills is that it is now much more difficult to get such jobs. When President Clinton enacted the Welfare to Work plan in the 1990s, he was trying to encourage people to go back to work in order to reduce government welfare spending. Unfortunately, with fewer jobs available for unskilled workers, people could find themselves in extreme poverty. Poverty does not benefit the US economy as it reduces consumer spending and tax revenues.
Even in the middle classes there are many jobs that are now being outsourced. This has been especially true in the computer and technology industry. Again, an inability to find work means an inability to buy homes, spend money, and make profit companies. When people don’t buy, the companies that make things don’t make money, which can then “shrink” to fewer jobs available and a greater desire to outsource to make things cheaper so they’re more attractive to people. consumers.
Those who support outsourcing say that reducing companies’ expenses will create jobs. There are a lot of government agencies outsourcing some of their work, saving millions of dollars, a direct effect on the US economy and federal spending. A common theory holds that being able to pay people lower wages for work means that companies will be able to produce things cheaper and pass these savings on to consumers. Lower prices may mean more spending for consumers, and companies will be able to hire more workers in the US because they pay less for workers outside of it.
Furthermore, many argue that employing workers in less developed countries improves those countries economically and increases trade in US products. It also increases a country’s ability to repay debts to the United States and can promote better political relations. Companies benefit economically by selling their products in other countries. That means they can hire more people in the US, lower prices on products for US consumers.
There is another “side” of the outsourcing issue that needs to be addressed. Not all people in other countries benefit financially from outsourced jobs and some companies do not commit to providing humane working conditions. Outsourced work can be done by children or in inhumane working conditions. Abuse of foreign employees may not benefit US business or political relations.
Outsourcing remains a difficult problem, but it remains. Virtually no one, anywhere on the subject, admits that outsourcing can be eliminated completely. There are those who believe the companies are dodging taxes and depriving the government of needed money and suggest that companies should be taxed for outsourcing and rewarded for keeping jobs in the US. Others believe that the temporary job losses will be followed by higher economic growth in the US and that it will ultimately be worth the cost.
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