Outsourcing Jobs

Subject: Business
Type: Evaluation Essay
Pages: 6
Word count: 1652
Topics: Ethics, Job, Macroeconomics, Social Issues, Work Ethic
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Table of Contents

Part 1

Outsourcing Jobs

In the past three decades, the world has experienced high levels of globalization. The new trend has resulted from the liberalization of markets, efficient flow of information and the integration of the economies. As a result, multinational firms have an opportunity to open various subsidiaries across the world. Furthermore, there have emerged new markets which are unique and require new strategies to penetrate. However, developed countries have suffered a lot as many companies which have been playing a critical role in sustaining the economy are outsourcing the available jobs to other countries across the world. This paper will therefore discuss in details the problems associated with the outsourcing of jobs.

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Outsourcing jobs is having a major impact on the economy. Currently, the institutions of higher learning are releasing a high number of graduates each year. However, the job opportunities are becoming few as many firms are opting to outsource some of the work to developed countries. The reason is that people in these countries are demanding low salaries. This aspect is creating high levels of unemployment in the country. Many of the young people are forcing into crime in an attempt to sustain their basic needs. Therefore, the government is forced to employ more police officers to tackle the increasing crime rate in the country. This is money which could have been used to spearhead the growth and development of the economy. On the other hand, job outsourcing is having a major negative impact on wages. The local people are forced to accept lower wages as they have to compete with workers in other countries who are willing to work at lower wages (Shao & David, 2007). The bargaining power of the companies has increased tremendously. However, the cost of living has not gone down even as the wages decline.

Job outsourcing affects the amount of taxes collected by the government. The administration relies heavily on taxes to support its activities. However, with many of the jobs being outsourced, many people cannot remit their taxes. Furthermore, the businesses are opting to open subsidiaries in tax havens as a way of evading the harsh taxation system in the US. However, the demand for quality services in the US has increased over the years. People want better services from the government. Nevertheless, the administration is unable to meet these demands due to shortage of money to support some of these programs (Munch, 2010). On the other hand, families that lose jobs cannot be able to support themselves. Some of them are being locked out of their homes because they are unable to service their mortgage. Others are unable to pay fees for their children. This is increasing the poverty levels in the country, an aspect that is affecting the quality of life that many are living. The change of events explains the reason why the number of street families in the United States has gone up.

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Job outsourcing is having a social impact on the American society. For instance, with the declining wages and rising cost of living, many parents are being forced to spend much of their time in the workplaces in order to support their families Shao & David, 2007). As a result, they do not have ample time to spend with their children. This comes at a time when the social media has replaced face-to-face interactions. As a result, the children have no one to talk to. Some of them end up being misled by their virtual friends and end up indulging in crime, drug abuse, and early sexual activities. Furthermore, another group become stressed, an aspect that affects their social life and educational performance.

The new trend has a moral impact on the society. Organizations have an ethical responsibility of supporting the society. The reason is that they accrue their profits from the customers and the society maintains its operations. Therefore, its morally wrong for the company to depend on the American community for profits while outsourcing the job opportunities to people in other countries who does not participate in any way towards the growth of the American economy (Arnold, 2000).  Therefore, the move sets a bad precedence for other companies in the market. In addition, it creates a bad blood with the communities because it subjects them to poverty despite relying on them as the target market.

In conclusion, job outsourcing has a major impact on the economy, social environment, and the welfare of the local population. Therefore, the companies should have the fiduciary responsibility towards the society by creating employment and dealing with social problems that affect the people.

Part 2

The world is constantly changing. With modern technologies and a liberalized market, people are finding it easy to move across the borders. Furthermore, the population in some countries is not willing to do some kinds of work. However, others are willing to do any work as long as it will enable them to support their families. The reason is that there is a large difference between the number of students being released from the institutions of higher learning and the number of jobs available in the market. As a result, Job outsourcing is playing a significant role in reducing the overall level of unemployment in the world.

One of the solution to job outsourcing lies squarely with the governments. Some analysts have argued that in order for the US to deal with this problem, it should pull out of the World Trade Organization, NAFTA, and other trade agreements and institutions that make it simple for the local companies to outsource their labour to other countries (Hira & Hira, 2008). However, this could only offer a temporary relieve. The reason is that the country cannot hide its head on the sand and ignore the global changes that are bringing economy together and uniting people irrespective of the imaginary boundaries.  Furthermore, thousands of the US citizens are working in different parts of the world as expatriates. In case of such a move, other countries can deport the US citizens, an aspect that can create job crisis in the US. One of the solutions to job outsourcing is improving the quality of education in the country (Gupta, 2008). Compared to countries such as Japan, the US lags behind in terms of technical training. Although Japan has not been spared in this modern trend, the number of jobs being outsourced is very minimal. The reason is that local companies and multinationals that have invested in the country are able to get highly qualified employees who are able to spearhead the growth of the businesses. The United States can also achieve this aspect by changing the current school curriculum to meet the modern needs in the job market. Besides technical training, the country should train the young minds on social media marketing and the importance of learning how to work with a diverse workforce. This will prepare them to work with employees emanating from different cultural, religious, and racial backgrounds.

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The government should stop to do any business with a company that outsource their operations. Many companies are thriving because of the contracts that are being awarded by the US government. However, they end up outsourcing these jobs to countries with cheaper labour (Szewczak & Snodgrass, 2002). This causes the US economy to lose taxes and employment opportunities. Therefore, the government should put a clause in its procurement laws that all companies that trade with it should ensure that all work is done by local unless there where the required skills cannot be found locally. This will encourage many companies to stop outsourcing their operations in order win tenders. On the other hand, the government should diversify its sources of taxes to reduce the tax burden on local companies (England, 2001). With the increasing level of competition in the local and international market, many companies that are outsourcing jobs are aiming at reducing the cost of operations. The reason is that they are expected to pay a huge amount to the government in form of taxes. As a result, the reduction of taxes on these organizations will play a significant role in reducing pressure on the companies which are trying to maintain their competitive position in the local and global market.

Creating a socially connected society would play a significant role in avoiding the impact of job outsourcing on the children. The media, government and non-governmental organizations, and religious bodies should emphasize the need for maintaining family values and togetherness. Many of the parents are leaving the role of parenting to the teachers (Corbett, 2004). However, teachers are overwhelmed by the large number of students who require their attention. One of the main advantage of the solution is that would minimize the impact of outsourcing on the young generation which is trying to look for a source of consolation over the social media.

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Organizations should participate in corporate social responsibility.  Currently, there are many social problems that are facing people in the society. Therefore, in order to protect the society from social problems that might emanate from job outsourcing; the organization should participate actively in dealing with these challenges (Buchholz, 2004). For instance, firms should support the less fortunate in the society. This is through sponsoring their education or in the equipping of schools in order to produce highly qualified personnel.

In conclusion, the current trend of job outsourcing is affecting the economy. Therefore, there is need to develop some mechanisms to prevent job losses. Governments should be in the forefront in supporting the companies in order to enable them lower their costs of production. This is through lowering the taxation rate and focusing on technical education. On the other hand, companies should set a section of their profits to be channelled towards eradicating the social problems that are affecting the society. This will be significantly in improving the overall welfare of the people who sustains the operations of the companies in the market.

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  1. Arnold, U. (2000). New dimensions of outsourcing: a combination of transaction cost economics and the core competencies concept. European Journal of Purchasing & Supply Management, 6(1), 23-29. doi:10.1016/s0969-7012(99)00028-3
  2. Munch, J. R. (2010). Whose Job Goes Abroad? International Outsourcing and Individual Job Separations. Scandinavian Journal of Economics, 112(2), 339-360. doi:10.1111/j.1467-9442.2010.01607.x
  3. Shao, B., & David, J. S. (2007). The impact of offshore outsourcing on IT workers in developed countries. Communications of the ACM, 50(2), 89-94. doi:10.1145/1216016.1216026
  4. Buchholz, T. G. (2004). Bringing the jobs home: How the left created the outsourcing crisis–and how we can fix it. New York: Sentinel.
  5. Corbett, M. F. (2004). The BPO revolution: Using business process outsourcing to leverage your company’s assets. Chicago, IL: Dearborn.
  6. England, C. M. (2001). Outsourcing the American dream: Pain and pleasure in the era of downsizing. San Jose: Writers Club Press.
  7. Gupta, A. (2008). Outsourcing and offshoring of professional services: Business optimization in a global economy. Hershey, PA: Information Science Reference.
  8. Hira, R., & Hira, A. (2008). Outsourcing America: The true cost of shipping jobs overseas and what can be done about it. New York: AMACOM.
  9. Szewczak, E., & Snodgrass, C. (2002). Managing the human side of information technology: Challenges and solutions. Hershey, PA: Idea Group Pub.
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