Outsourcing And The United StatesEssay Preview: Outsourcing And The United StatesReport this essayOutsourcing and the United StatesJim McCarthyAxia CollegeEffective persuasive writing COM/120Bryon FordSeptember 2, 2006Outsourcing and the United StatesOutsourcing and the United States: benefit or not? Outsourcing, or off shoring, note many workforce experts, is simply a fact of a global economy. The fact is, the nine-to-five workday is no more, and because of that, United States employers have a choice. They can either go to the expense of hiring a 24/7 workforce to meet the needs of an international marketplace, or they can send there jobs overseas. There are also proven savings when it comes to off shoring as well, namely that workers in India and China are willing to accept less in the way of pay than workers in the United States will (Babcock, 2004). Nearly every United States company is off shoring, or at the very least, considering doing so (Babcock, 2004).
The situation we face here is that technology combined with globalization, which has given us rise to what Gorden (2002) calls, the “virtual state, the virtual corporation and now the outsourced workforce” (24).
But the question we run into here is, what is the impact on the United States workforce when a company off shores? How can something like sending jobs overseas (especially white-collar jobs) do anything except demoralize a workforce that is already skeptical to begin with in the wake of the 1980s through the 1990s downsizing trends? The answer we provide to this is, there can not be much advantage to the United States workforce when it comes to off shoring, because off shoring simply increases unemployment in the United States, while providing and emotional backlash against corporate America – one that, in the wake of the corporate scandals of the early 2000s, is not the best thing in the world for the business community. Furthermore, limiting off shoring could impact large organizations profits. General Electrics response to the furor, namely attempts to limit outsourcing could impact earnings (Hansen, 2004) which do not help the issue either.
Nor is it coming to an end any time soon, according to Forrester Research, Inc., approximately 830,000 United States service sector jobs (telemarketers, accountants, software engineers, chief technology officers, and others) will have moved abroad by the end of 2006, with 3.4 million additional jobs going overseas by 2015 (Brown and Wilson, 2005).
The literature, as can be imagined, presents a mixed issue. The upside, according to Mann (2005) is that prices are lower and variety of consumer goods and business inputs are greater, as is the process for innovation and efficiency. The downside, of course, is that United States firms go out of business, workers loose their jobs, and this had a bad effect economically on the communities (Mann, 2005).
Johnson and Hamblen (2004) for example, both note that emotional backlash against any plans to send jobs overseas can hurt the morale of talented, gifted employees back home. What does not help is, the senior executives do not communicate the information in the right way, they do not explain the reasons for outsourcing, they downplay the negative or concerns, they hide the plans for as long as they can, then wonder why their employees are so upset and angry when the news finally is apparent (Johnson, 2004).
Adding insult to injury in this case is the fact that a report issued during 2005 by PricewatterhouseCoopers demonstrated that less than half of the respondents to a survey querying the United States and European organizations found that outsourcing was actually effective.
On the other side of the coin, some experts point to the fact that one reason why outsourcing is becoming popular is because the United States workforce is not as well educated as it used to be (Gordon, 2002). Basically, instead of pointing students to a knowledge-based economy by better educating students (and immersing them strongly into technology), both public and private schools in the United States are graduating students who cant even meet the requirements for entry-level employment (Gordon, 2002). According to the Public Agenda report issued in 2000, high school graduates do not even have the skills to succeed at work; and during the same year, the National Association of Manufacturers reported that 40 percent of all 17-year-old workers did not have enough math skills to hold down a production job, while 60 percent did not have the reading skills to do so either (Gordon, 2002). One would hope that such statistics would end up being a wake-up
In conclusion, the Obama administration is taking a different view than the current president and seems to believe that outsourcing is more responsible and cost-effective, for its higher wages and better benefits for the American worker than for the corporate and educational institutions. These figures do not appear to be misleading though. These numbers are directly contrary to the administration’s claim that U.S. manufacturing jobs have been growing dramatically since Obama took office.
It should be noted that some of the claims made about the outsourcing policy are clearly wrong. For example, the federal budget estimate for 2004, released in January 2004 as part of the President’s budget request for FY 2005, showed that the overall share of U.S. manufacturing jobs that fell into service in the last 30-years is now over 80 (or about 8% of the workforce) per year, even after accounting for new jobs added due to the shift toward low-skill workers, a number that has been falling steadily ever since then. This is in stark contrast, with the government estimate for 2010 showing that the share of U.S. manufacturing jobs that fell into service in the last 30-years has actually fallen to about a quarter of the percentage of the workforce that did so during the previous three years. Likewise, this same percentage of American manufacturing jobs fell to around 60% during the same time period. This decline in a country with so many new jobs means that while the number of people now employed in manufacturing declined from a record peak in 1981, the number is still just over 1 billion workers and many of this have been retired.
A few additional points from the Department of Justice’s press release
Obama’s actions appear to have been an attempt to increase costs to government corporations by cutting the size of the federal government budget. By raising the federal government’s share of U.S. manufacturing jobs from 13.5% to 21.5% from 1990 to 2010, the government deficit increased by over $12 billion since 2010.Â
“As the president prepares to push through a radical budget plan for the next decade, government corporations are demanding $500 billion in savings without even considering the impact of cutting jobs. The plan has far less chance of being adopted because of the long track record of fiscal deficit reduction and a lack of support for the budget for states with more budget deficits that could result in higher borrowing and even greater deficit increases that would put jobs at risk. The White House is attempting to shift the government’s support from businesses to the middle class and away from government. By extending tax breaks to wealthy individuals, private companies are likely to profit, as those with huge business empires have an incentive to contribute more to the federal budget and thereby avoid higher taxes.”
The Government Accountability Office issued a report that analyzed the 2012–2013 budget proposals. Its findings were disturbing as they found that the government is simply failing to find any job creation savings from its deficit reduction programs in the final two years of the proposed tax cuts. The government has been able to cut job growth only slightly while allowing private employers to pay a lower rate (by 11%) through the end of 2013 (Government Accountability Office 2009).[25]
On top of this, the Obama administration is now using the National Governors Association’s annual report on labor supply to set the targets for the federal government while claiming that it is achieving this goal: “$200 billion in layoffs, as part of a government stimulus to help address employment shortages and job losses in the late-part of 2010. ”
This analysis was based on the government’s 2009 budget request for FY 2010, and there was nothing particularly important about the actual numbers of layoffs or jobs. There was essentially zero discussion about the actual numbers.
What was actually happening however was the administration and its