Deductive Reasoning Assignment, Essay Example

With the rapid advancement of all the fields of the human practice, social and economic problems have become related and in some cases interdependent. Thus, one can argue that off shoring activities result in the increase of the domestic budget expenditures due to the unemployment rate factor. What we are going to look at in this paper is the validity of the above deductive argument by means of identifying and evaluating premises and conclusion.

Nowadays, with the financial crisis making its way through the business world the problem of increased unemployment rates has become of the primary concern for the governments worldwide. However, even before that, during the stabilization or recovery periods, the governments still kept a close look at the unemployment levels as they are among the major determinants of the country’s labor force capacity and abilities, potential revenues and expected expenditures. When combined and analyzed, those determinants help to identify, establish and incorporate the country’s strategy for the budget planning. With high unemployment levels country’s labor force numbers – these are the people able and willing to work – become smaller. Therefore, the volume of potential tax revenues decreases, while, on the other hand, the volume of social benefits to be paid for those having lost their jobs increases. These social benefits include social and unemployment fund payments and are obligatory to be paid for a period of time. All in all, the effect high unemployment levels have on the economy is the following: companies are paying less on the profit tax due to the decreased production levels because of the smaller number of employees. Consequently, national budget revenues decrease while the expenditures, due to the growing number of social obligations, increase at a rapid rate.

When listing the causes of high unemployment levels it is important to point out one growing trend today – off shoring. Nowadays the term “off shoring” has taken a slightly different meaning compared to the one it had about 3-4 years ago. Previously, by off shoring people usually meant running various domestic business operations in countries abroad. Today, however, a small but significant remark is added to this definition. According to Carmel, Erran & Tjia, Paul (5), the term “off shoring” is now being understood by its business users to mean the shifting of tasks to low-cost nations, rather than to any destination outside the country. In other words, it is a growing practice among countries with developed economies of employing people in emerging markets, where labor costs are low, to carry out service functions previously done at home (Farell, Diana, 3). The purpose is to increase net profit by means of cutting down operational costs with the help of lower wages while still keeping up the production levels. As a result of such an on-going tendency a growing concern exists that off shoring will drain jobs out of the economy of domestic countries. This will inevitably shorten the domestic labor force, resulting in increased domestic unemployment levels. Consequently, going back to the previous discussion, the amount of social and unemployment payment will increase, which, in this case, will increase the amount of budget expenditures.

My central argument is a valid categorical syllogism. Here are the premises and conclusion:

Premise 1: High domestic unemployment levels increase domestic budget expenditures.

Premise 2: Some off shoring activities result in high domestic unemployment levels.

Conclusion: Therefore, some off shoring activities increase domestic budget expenditures.

Work Cited

Carmel, Erran, and Tjia, Paul. “Historical Context and Lessons for the Future”. Offshoring Information Technology: Sourcing and Outsourcing to a Global Workforce. Cambridge University Press, 2005.

Farell, Diana. “Understanding Offshoring”. Offshoring: Understanding Emerging Global Labor Market. Harvard Business Press, 2006.