Is Outsourcing Good or Bad for American Businesses, Essay Example

Outsourcing is the practice of contracting a business process to another firm and not completing it internally. Over the course of the past decade the U.S. has outsourced a plethora of jobs to countries like India and China. Most of these jobs relate to the IT industry and manufacturing. Many U.S. businesses are in favor of outsourcing because labor costs in other countries are typically far more cost effective than in the U.S. in other words, a large company that manufactures computers will pay less in labor costs if it outsources it manufacturing services to china, for instance. However, the U.S. labor force is not always happy with the practice of outsourcing because it deprives many Americans of work. When factories close down because jobs are outsourced overseas, American workers become unemployed. Their unemployment has a subsequent negative effect on the U.S. economy, placing a considerable amount of pressure on taxpayers. From a business perspective it is easy to understand why corporate moguls want to outsource jobs; they save money. However, from a taxpayer’s perspective it is clear to see why outsourcing is often frowned up; it costs them more money. With that said, I think outsourcing has a negative effect on the U.S. economy and on U.S. businesses.

Wall Street Journal Article: http://blogs.wsj.com/digits/2012/11/07/obamas-win-not-the-best-news-for-indias-it-industry/?KEYWORDS=outsourcing