Globalization and Urbanization, Essay Example

Introduction

Globalization, urbanization, the growing market competition and regular financial crises impose new requirements and obligations on businesses and individuals: while organizations want to make their businesses cost-effective, individuals search regular employment, decent salaries, and promising career growth opportunities. Outsourcing has become the distinctive feature of the postmodern business reality. Organizations apply to outsourcing to reduce the costs of hiring and maintaining staff. Individuals view outsourcing as a unique opportunity to find a well-paid job. Although thousands of people in the United States consider outsourcing as the direct threat to the stability of the national labor markets, outsourcing is an excellent solution to numerous business and individual issues. American businesses should continue the practice of outsourcing, because outsourcing helps firms to reduce their costs, provides thousands of people from developed countries with decent employment and excellent career growth opportunities, and serves an effective geopolitical tool of reducing the existing economic and social disparities between the developed and the developing world.

Outsourcing has already become the definitive feature of the postmodern business reality. Financial crises, economic difficulties, and growing market competition push companies to hire effective and cheap labor force in countries other than the United States. Today, outsourcing is a part of the daily business routine. Thousands of manufacturing and service/ consulting industries moved their facilities to developing countries. The cost of labor in these countries is times cheaper compared with that in the U.S. More often than not, outsourcing is the primary option for businesses that want to cut their operating costs (Otterman). Thousands of people vote against moving jobs to low-wage countries, because they think that outsourcing creates unfair competition in labor and raises unemployment. Companies, on the contrary, consider outsourcing as the best way to survive financial crises. Outsourcing helps firms to reduce their operating costs, provides people in developing countries with decent employment and excellent career opportunities, and serves an effective geopolitical tool of reducing the existing economic and social disparities between the developing and the developed world.

Outsourcing helps firms to cut their operating costs. Cheap labor is, probably, the major benefit which outsourcing offers to firms and individual businessmen. That people in the developing countries work for wages much lower than those in the U.S. cannot be denied. For many of them, a monthly salary of $200-$300 is the ultimate dream and limit to their ambitions (Friedman). As a result, businesses residing in the United States no longer have to spend millions of dollars every month to satisfy the monetary ambitions of the American employees. As long as the quality and loyalty of the Indian and Pakistani workers is equal or higher than that of the employees in the U.S., businesses will continue to use outsourcing as a measure of reducing their costs. By moving their facilities to the developing countries, American businesses also reduce non-labor costs. For this reason, they can offer lower prices for their products and services without changing their quality. Businesses choose outsourcing to increase their profit margins and to outperform their competitors. Needless to say, outsourcing also benefits thousands of people in the developing world.

Outsourcing provides people from the developing countries with decent employment and excellent career growth opportunities. To those who did not dream to earn more than $300 per month, outsourcing is a miracle and the source of unbelievable employment benefits. Hundreds of Indians who work for American companies earn enough to invest in their education and to get M.B.A.’s and other degrees on the side (Friedman). Many others have better financial opportunities to support their families (Friedman). Ultimately, decent employment is always the source of improved self-confidence and a guarantee of personal independence (Friedman). “There is nothing more positive than the self-confidence, dignity and optimism that comes from a society knowing it is producing wealth by tapping its own brains” (Friedman). In many aspects, outsourcing literally saves thousands of lives in the developing world.

Outsourcing is an excellent geopolitical tool of reducing the existing disparities between the developed and the developing world. By hiring people from India and other low-wage countries, American firms not only establish close business ties but also help the developing countries to embrace financial and technological opportunities that had been unavailable to them. Take a look at Indians: many of them have credit cards and have become real consumers (Friedman). They feel full citizens of the globalized world and are not afraid of looking into the future. Outsourcing moves developing countries closer to the developed world and gives them a chance to raise their economic well-being and social self-worth. By hiring employees from India and Pakistan, American enterprises invest significant resources in these countries’ prosperous future and lay the foundation for the development of strong economic and social relations.

Certainly, not everyone agrees that outsourcing benefits the developed world: thousands of people view outsourcing as the threat to the stability of the American labor markets. Millions of foreign employees work in the U.S. jobs, while American workers are searching for better employment opportunities elsewhere. U.S. employers use H-1B visas to bring foreign workers to the U.S. and once trained to fulfill their workplace obligations, these foreign workers replace their American “teachers” at lower pay (Harrop). Generally, the U.S. loses about 15,000 U.S. jobs to offshoring every month, but these numbers are relatively small, compared with the total number of available jobs in America (Otterman). The United States employs more than 130 million non-farm workers, and new private-sector jobs are constantly created (Otterman). In no way is outsourcing a threat to the American workforce; rather, it is another stimulus for the American workers to reconsider their job attitudes and monetary ambitions. There is no evidence to prove that outsourcing is responsible for the recession; nor is there any evidence to show that outsourcing is making the economic situation worse (Otterman). Rather, outsourcing is the best way for thousands of small and large American companies to stay afloat during the crisis. Outsourcing increases wealth, because it allows firms to be more efficient and productive with fewer resources (Otterman). It lowers the ultimate price of goods and allows American consumers to save more (Otterman). It benefits businesses, reduces their operating costs, and eliminates social and economic disparities between the developed and the developing world. It raises self-confidence and self-worth of the outsourced workers in developing countries and gives them a unique opportunity to become full citizens of the new globalized world.

Conclusion

Globalization, urbanization, market competition and regular financial crises create new conditions for and impose new requirements on businesses and individuals: the former want to become more efficient and productive with fewer resources, whereas the latter seek decent employment and promising career opportunities. Outsourcing helps firms to reduce their operating costs, provides thousands of people from the developing countries with decent employment and excellent career opportunities, and is an effective geopolitical tool that reduces the existing social and economic disparities between the developed and the developing world. By moving their facilities to low-wage countries, businesses increase their profit margins. Outsourcing gives people from the developing countries a chance to become financially independent and well-educated, raises their self-confidence and self-worth. Outsourcing turns the developing countries and their people into full citizens of the globalized world. Many people believe that outsourcing threatens the American labor market and is the direct cause of unemployment; in reality, the number of outsources jobs is a trifle compared with the number of available employment opportunities in the U.S. Outsourcing creates wealth and makes firms more efficient. It is the best way for companies to survive any financial crisis.

Works Cited

Friedman, T.L. “30 Little Turtles”, New York Times. New York Times, 29 February 2004. Web. 16 August 2010.

Harrop, F. “New Threat to Skilled U.S. Workers”, Seattle Times. Seattle Times, 17 April 2007 Web. 16 August 2010.

Otterman, S. “TRADE: Outsourcing Jobs”, Council of Foreign Relations. Council on Foreign Relations, 2004. Web. 16 August 2010.