Outsourcing in America: Hurtful or Harmful

Much attention has been given recently to the controversial labor practice of outsourcing. Does the fact that the presidential race is using jobs as a major campaign platform, or concerns from the business world and the up and coming workforce push this issue to the forefront? Nonetheless, this is a hot topic and details and horror stories can be heard on most any news show or business magazine or newspaper.

The purpose of most businesses is to maximize profits by using scarce resources they have available in the most efficient way. This, of course, includes labor. For years, economic theory has taught us that capital assets were known as “fixed” assets and that labor was mobile. It seems now that this theory is no longer true, thanks to advances in Information Technology. It is very possible and profitable for a company such as Intel and Texas Instruments to outsource positions such as software programming to India, paying around $10,500, versus an American employee with a $65,

Is it wise to assume that this new sector in globalization can be healthy in encouraging new developments in technology, greater efficiency in processes and result in lower prices and increased buying power for the American consumer? Several business publications have been found to use the example that the computer factories in China resulted in lower production costs, which in turn resulted in the drop in prices for hardware, which again in turn, led to increase American productivity, due to technology becoming more affordable.

000 price tag, for the same work. Even though Business Week magazine reports that “…pay for basic application development has plummeted 17.5% in the past two years.” Given that this is a chunk of change to subtract from someone’s resources, this still keeps American IT programmers uncompetitive with Indian counterparts.

What does this mean for the labor market in the United States? First of all, the emerging truth of the amount of outsourcing that is going on is discouraging students from Comput

Some topics in this essay:
Department Labor, Harmful Helpful, Labor Statistics, Business Week, India China, Gregory Mankiw, Texas Instruments, Bank Chicago, Computer Science, Information Technology, world leader, labor market, employed americans,