Studies show that many large companies are sending their work to third world countries to save a large amount of money.
Once a job goes overseas, it is rare that it ever returns to the United States.
Because companies do not have to deal with certain labor laws, wage laws or other tax laws, their overhead is greatly reduced, making their profit margin much greater.
There are many positives and negatives to this topic.
I will discuss them in this paper.
Outsourcing is defined as the contracting out of a business process to a third-party, in this case another country.
Many companies outsource their jobs to foreign countries such as India, China and various others for their cheap labor.
Not only does it hurt the American manufacturing industry as a whole, but the American unemployment rate takes a hit as well.
During the early 2000s, the U.
S.
multinational corporations shipped around 2.
4 million of their jobs overseas.
Between 2008 and 2010 alone, the United States has lost 450,000 jobs to outsourcing to China.
Many qualified individuals who lost their jobs have had to take over positions that they are over qualified for.
It has started a devastating downward turn for our countries unemployment rate.
All of these things have a negative effect on our country.
Some experts believe that outsourcing will be the downfall of our economy and destroy it more than it already is.
Lou Dobbs is an author and also has his own long time show on CNN called "Lou Dobbs Tonight" and delves in to many of the major economic topics including this one.
He believes that it is inevitable for American companies to go overseas for their cheap labor.
The standard average hourly manufacturing wage in China is only $1.
In the United States, it is much higher at $16.
Dobbs at one point really paints a picture of the situation that we are in.
He said that "China can provide our toys; Sri Lanka can make our clothes; Japan can make our cars.
" With the low exports at this time of the United States, we wonder in say 20 years, what will Americans be making? At some point, companies are going to have to bite the bullet and make their products here in the United States and pay the wages needed for American's to makes an honest living.
That is the only way for our economy to get back to a respectable state.
The media puts their spin on it and makes the public think a lot like Lou Dobbs; however, most economists disagree with him and that philosophy.
Economic advisor Greg Mankiw thinks that outsourcing can and will be a positive thing for the United States in the long run.
Contrary to what most people think, service imports only make up 0.
4 percent of the country's economy.
In fact, we actually import $20 million more than we export in service jobs per year.
The biggest positive of outsourcing to foreign countries is the lowering of prices for goods in the United States.
Places like Wal-Mart among others, who outsource to India and other countries, can make their unit prices substantially lower than most other companies because of outsourcing.
In return, that helps the American consumer because they don't have to spend as much money when they shop there.
In conclusion, I think that outsourcing will always be a big part of our country.
After reviewing all of my research, I believe that the current way we deal with outsourcing is best.
We are outsourcing a fair amount of jobs to foreign countries but the effects are positive.
And on another note, it has gone public that some jobs at Apple, Google, Caterpillar, Ford, Emerson, GE, and Intel are all coming back to the United States decrease the unemployment rate which is also good news for our country.