Outsourcing: leading to long-term damage to American-held jobs and the American economy
The current trend in outsourcing is likely to continue, potentiallyleading to long-term damage to American-held jobs and the American economy. While standard economic theory holds that outsourcing is good for the U.S.economy, there are several important and negative implications, of thecurrent outsourcing trend. The outsourcing trend is thought to contributeto the jobless recovery, resulting in a relative reduction in jobs, even asowners of capital benefit from outsourcing. A decrease in consumerconfidence and increased unemployment and retraining costs are also part ofthe costs of outsourcing. While the creation of new higher-skilled jobs ina dynamic economy is often touted as a solution to the woes of outsourcing,there is a problem inherent in expecting Americans to develop skills neededfor these higher-end jobs in a market where entry- and mid-level jobs havebeen outsourced. Nonetheless, the best-case scenario to resolve theproblems of outsourcing likely lies in a future with such a dynamic economy The driving factors for outsourcing are clear: reduced costs.Mieszkowski (2004) notes that a computer programmer in India makes $5,880
e an American computer programmer earns between $60,000 and$80,000 (in U. During the 1990s,outsourcing by U. Overall, the best solution to the problemsof outsourcing seems to lie in the sustainment of an economy based onconstant innovation and the growth of new, highly skilled jobs. Further, increased foreign incomes are believed to increase the demand forU. Otherestimates are higher, as Researchers Ashok Deo Bardhan and Cynthia A. Historically, jobs outsourced from the U. In general, economists worry that hiring will not stay in tunewith the economic growth in the United States. While outsourcing may, questionably, be good for U. workers are often demoralized to findthat their jobs have been outsourced overseas, and face a difficult jobmarket.
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