March 5th, 2007
Sometimes it’s a simple bottom-line decision. Should a company pay its accountants $4,000 or $40,000 per year? This kind of decision has become a routine choice facing many U.S. companies.
Outsourcing, or the exporting of jobs, has become a major issue facing industrialized countries.
The prospective loss of jobs in these nations is disturbing to many employees.
However, businesses are increasingly exporting their labor in an effort to stay competitive. Despite protests, this practice shows no sign of slowing down or ceasing.
Forrester Research estimates that from 2000 to 2015, a total of 3.3 million United States jobs will be sent abroad. Businesses have long been attracted to the cheaper labor found abroad.
Outsourcing developed after World War II in the manufacturing industry.
Apparel manufacturing was being redirected to Asia in order to dramatically reduce wage expenses. Other blue-collar trades soon followed. The practice picked up and also went to South America during the 1970s and 80s as other industries joined in. The controversy heated up in the late 1990s with the addition of white-collar jobs.
White-collar exporting picked up with the help of the Internet and cheaper international calls. It’s become easy to scan a document and send it across the world. India and China are now the hotspots for outsourcing. India is popular because there is a sizeable amount of educated people that speak English.
Outsourcing will likely continue.
Today, outsourcing is used in a variety of fields including manufacturing, legal work, architecture, accounting and software. Forrester Research predicts $136 billion will be lost by moving white-collar jobs abroad. This translates to an average of 220,000 jobs per year. Manufacturing jobs make up a substantial loss as well. Today, outsourcing remains a source of controversy in industrialized and developed countries. People are being laid off as replacements are found.
Labor unions claim that it hurts our economy. Economists are divided about the harm, but believe the issue is blown out of proportion. Many companies believe that, in an ever-connected world, outsourcing is a necessity if they are to stay in business.
Entry Filed under: Why Outsource?