Outsourcing Jobs
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Outsourcing Jobs to Foreign Countries
The American middle class is in danger of becoming defunct by the outsourcing of jobs to foreign countries. Jobs that Americans once considered stable long-term employment are now being outsourced at a rising rate. If this trend continues, America could be the next third world country. How has this happened? What can the average American do about it?
Outsourcing is not a new concept. As early as the 1900’s the U S Government was outsourcing jobs to the private sector to help cut costs to tax payers. Over the years, this practice was found to boost the economy by creating new jobs and keeping the unemployment rates low. According to the Bureau of Labor Statistics, the unemployment rate in 1944 was only 1.4 percent. Business was growing strong and so was the economy. In the 1970’s and early 1980’s, with operating costs rising, business began looking to outsourcing to save millions of dollars. Hundreds of thousands of jobs in the manufacturing sector were outsourced to third world countries. The unemployment rate, according to the Bureau of Labor Statistics, went from 3.5 percent in 1969 to as high as 9.7 percent by 1982 (2006, p. 1). Big business had solved their overhead cost problem by sacrificing the American worker. Blue-collar workers were left to fend for themselves either standing in the unemployment line or retraining for new jobs, all at their own expense.
Over the years, the blue-collar workers that had lost their jobs were retrained into white collar jobs in the service industry. The service industry, like the manufacturing industry of the past, was growing at an increasing rate as was the U.S. economy. As history repeated itself, this burgeoning industry finds with increased growth came the increased cost of operation. Businesses once more are using outsourcing to balance their corporate budgets at the expense of the worker. Ellen Heffes finds that 2 million financial sector jobs will be outsourced by 2009 (2004). Alan Garner’s economic review (2004, p. 3) state that outsourcing in the service industry has increased to about 200,000 to 300,000 jobs annually and the loss of jobs is projected to reach 3.4 million by 2015. Alan Garner also states that “about 14 million service jobs were at risk of Offshoring in 2000, while about 96 million service jobs had a low risk of Offshoring (2004, p. 3).” The former blue collar workers of the 70’s and 80’s, who retrained for the service industry, are at risk of losing their jobs all over again. This crisis comes for them just as they are looking at but not yet ready for retirement. With competition from younger better trained new graduates, the chance of finding employment is slim. They are at risk of losing their homes, possessions, and entire way of life.
This situation is not a future fear. Many middle class Americans are already feeling the effects of outsourcing. For example, Myra Bronstein, a software tester, was laid off when her company moved all their jobs over seas. Bronstein, who was making $74,500 a year, is unemployed, has exhausted all her unemployment benefits, and now must resort to selling furniture and collectibles on eBay to make some income. She said, “The fact that they not only outsourced my job, but my entire industry, makes me feel powerless and paralyzed. Frankly, this situation has created problems that are way too big for one person like me to solve” (Cook & Nyhan, 2004). The middle class is being affected across the earning spectrum. Sheryl Matta, a medical transcriptionist, was making $50,000 a year when she was laid off by her company, sending her job to India. Ms. Matta, 54 years old, now works 15 hours a day with her new employer making only $24,000 a year. Ms. Matta said, “I can’t make a living at this anymore. Our jobs are being taken away and we’re very, very angry about it (Maher, 2004).” Many of these workers are single mothers trying to make a living like most Americans. The more these jobs continue to be moved away from America the harder it is for Americans like Ms. Matta to educate their children or save for retirement.
The long-term impact of outsourcing will be felt not only by the family bread-winner but also by his or her children and grandchildren. The majority of middle class Americans live on the edge of bankruptcy. Two incomes are often only barely enough to keep afloat month to month and leave little room for savings, whether it be saving for college for their children or for retirement for themselves. Today’s families are finding that they are supporting their adult children into middle age (Raynor, 2003). As outsourcing of middle class jobs continues, Americans will find it impossible to maintain the lifestyle they currently live. Due to the