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Old 30th August 2010, 09:12 AM   #1

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I think the major reason why people in the United States are concerned about outsourcing is that manufacturing creates an enormous amount of economic activity for a country. Sure, it lowers the cost of doing business, but this is only because it is necessary to outsource in order to compete on price. Don't get me wrong, I am all about a global economy, but I wanted to bring a different point of view on the subject.

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Old 30th August 2010, 11:26 PM   #2

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Who is this American Panel you speak of?

It does say ... "Companies mainly outsource some non-core or low-tech jobs to others".

I disagree a bit overall.

Take another scenario like where you buy your food products. There is considerable waste purchasing food products from across a continent when you consider the cost of energy and waste that goes into delivery. I believe I could come up with equal if not more compelling arguments for the benefits of buying local.

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Old 1st September 2010, 03:21 AM   #3

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Well, I think outsourcing is beneficial for American businessmen/women. There's a lot of advantages in hiring an outsource provider, compare to hire a local staff.

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Old 1st September 2010, 07:11 AM   #4

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I'm in basic agreement with the undeserved rap offshore outsourcing "enjoys", fanned somewhat by mainstream media. Generally, when each of two economies specialize in the area in which it has a comparative advantage, and then engage in crossborder trade, both economies enjoy the benefit of increased overall welfare of the population. Outsourcing is just one form of this principle in action.

Lawmakers, on the other hand, often have two other priorities which trump economic reality: (1) How can we confiscate (er, um, sorry....'obtain' ) more funds to feed our spending programs? (2) Populism.

To picture the latter, first imagine walking into any random gathering of, say, 100 people. Ask how many have ever cracked open an Econ 101 text. If you're lucky, maybe 4 hands go up. Now ask how many think offshoring of US jobs is generally harmful and should be restricted by legislation. The 4 hands come down; the other 96 go up. Now if you're a politician who's primary motivation is getting elected, what kind of song are you going to sing to the people regarding outsourcing? (Of course, after you're elected, you'll have those same 96 people--the ones who voted for your 'anti-outsourcing' platform--griping that their computers cost 10- to 30% more than they should; schools can't afford as many as before; etc, etc; naturally, you'll blame it on "the policies of the previous administration".)

Generally, if you let the markets operate relatively unobstructed, they will efficiently decide where and by whom goods and services should be produced / provided, with the result of optimizing the welfare of all economies.

Outsourcing is therefore neither inherently bad or inherently good--it's situation-specific. In Logan's illustration, for example, if the local producers have a cost advantage vis-a-vis the non-locals, due to transportation / storage issues, then all other things equal, the non-locals won't be able to compete for long.

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Old 1st November 2010, 03:35 PM   #5

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Agreed it depends on the situation. But that being said I don't think outsourcing is in any way inherently evil. If we're talking about US exporting BPO type jobs, for the time being high value jobs will stay in the US. Sending the low value repetitive jobs overseas increases productivity and frees up cash employers can send on better talent.

Having government controls in place that force a minimum wage and regulate where labor can be sourced sounds a lot like communism to me...

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Old 18th January 2011, 09:31 AM   #6
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The primary reason businesses outsource certain tasks is because it saves them a nice amount of money, and they don't have to waste in-house employees to do that task. With the money they are saving they can now focus more on expanding their expertise within the business itself. This results in the fact that by expanding your business you can now hire more workers to work for you. So in as much as the argument claims it's hurting the US economy, there is still the factor of enabling you to hire more workers in other areas thereby benefiting the economy.

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