One consequence of the global economy is the easy ability of companies to locate suppliers, manufacturers, and services offshore, in places such as the Philippines, China, and India. The outsourcing phenomenon has, as one might expect, caused tremendous consternation in the ranks of American workers. To what degree do you think that outsourcing has been a driver for the continued existence of organized labor? Do you believe that anxieties about outsourcing have been exaggerated?
Outsourcing does not degrade organized labor but continues to strengthen its existence across the U.S. Many companies outsource their services and productions to developing countries for cheaper labor costs. This will help increase their overall profits. Outsourcing makes sense if the company is selling products globally. It will cut shipping expenses significantly and reach its customers faster. However, these companies still need to hire American to work and produce goods and services for the locals. The current pandemic is a prime example for many companies to maintain their productions or manufactures within the country. Thus, organized labor can continue to represent the low-skilled workers as they play a critical role in propelling the company to move forward during the hard times. (Sharma, 2020).
Moreover, I do not believe that anxieties about outsourcing have been exaggerated, especially before the pandemic. Many multinational corporations try to outsource their services and productions to developing countries to reduce expenses and increase profits for their shareholders. Additionally, the tax break for outsourcing jobs motivates more companies to outsource their services and productions offshore. Under the tax break for outsourcing jobs bill, companies do not have to pay U.S. taxes on those earnings the profits in a foreign country unless they repatriate them to the U.S. (Silvers, 2017). Approximately fourteen million jobs were outsourced to developing countries under this tax bill. As a result, many American low-skilled workers lost their jobs. Thus, outsourcing has negatively impacted the American economy, especially the low-skilled workers. (How outsourcing, 2017).
Do you agree with economists who argue that outsourcing low-skilled work to developing countries allows for the American economy to produce more highly skilled positions? In this discussion, use examples from the press, your own experience, or the experience of others?
I can’t entirely agree with this argument. There should be a balance between the two workforces. The U.S. is a diverse country with people coming from different backgrounds and education levels. While the perception is that the low-skilled workers are not that important, they play a vital role in ensuring everyone has the necessities. They are those “mission essential” workers that deliver, stock, and sell the groceries during the pandemic. If everyone is seeking higher education for higher-skilled positions, who will be the housekeepers at the resorts or hotels, the cashiers at the grocery stores, or the cleaner or janitor at the offices or malls? Without them, many highly skilled workers will have to take on additional duties to clean their room or office or ring up their grocery items.
One example that I have is my lodging manager recently had to change out of her lovely dress and put on her housekeeping uniform to clean the guest rooms. Since the pandemic, it has been challenging for her to hire or retain her housekeeping due to different reasoning. Therefore, the manager has to step in on multiple occasions to clean the rooms when they are low on staff. These times, outsourcing would not do any good for us or the high-skilled positions. Thus, organized labor must continue to negotiate collaboratively to reach a definitive agreement that ultimately fulfills both parties’ needs.
How outsourcing jobs affects the U.S. economy. (2017, November 29). Deccan Chronicle. Retrieved 22 June, 2022, from https://www.deccanchronicle.com/technology/in-other-news/291117/how-outsourcing-jobs-affects-the-us-economy.html
Sharma, S. (2020, April 16). Outsourcing costs: The ultimate guide for entrepreneurs. Classic Informatics. Retrieved 22 June, 2022, from https://www.classicinformatics.com/guide/outsourcing-costs-entrepreneurs
Silvers, D. (2017, November 7). A giant tax cut for corporations that outsource jobs. AFL-CIO. Retrieved 22 June, 2022, from https://aflcio.org/2017/11/7/giant-tax-cut-corporations-outsource-jobs
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