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Outsourcing Jobs

Essay by 24  •  January 3, 2011  •  1,357 Words (6 Pages)  •  1,089 Views

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With the growing need for American companies to remain competitive in the world marketplace, there is a greater use of outsourcing jobs to other countries. When companies use outsourcing it has a grave effect on Americas economy, workforce, and way of life. If American companies keep looking overseas for a cheaper labor force, how long will it take until the average American can no longer afford to have a place to live, or put food on the table for their family?

As a nation, are we contributing to our own poverty problem? For those few who profit from outsourcing, they would say no. For the many workers who now have no job, or now work for less money, they would say otherwise. According to Frank LaGrotta, “Outsourcing Treats working Americans like waste products of a Robin - Hood- in- reverse strategy to rob from the poor and give to the rich” ( LaGrotta, 2004) The numbers are startling, there are over three million less jobs in the United States than there were 15 years ago. In the next ten years there are expected to be an additional three million jobs lost to outsourcing abroad. This in turn starts a chain reaction. The more products that are made overseas, the more plants and factories in America are shut down. The more plants and factories that are shut down mean more American jobs are lost, and the unemployment rate in the United States goes higher. With the unemployment rate growing higher and higher, there will be less money for the American people to buy these products that were sent overseas so that we can get them at a cheaper price. In the short term it may save Americans money on their purchases, but in the long run it will hurt us all.

In addition to unemployment rising, another effect outsourcing has on the American worker is their wages are far below the increase in inflation. According to the Bureau o Labor Statistics “ Manufacturing average compensation is $21.33 in America, and $2.38 in Mexico, and in China less than one dollar an hour.” ( Bureau of Labor Statistics 2003) I know from personal experience working with my father as a house painter in 1988 I was paid by the unit to spray paint. I made $1,500 a week, and by the next year the contractors hired spray painters from another country to do the same job for $7.00 an hour. The rent on my house back then was $400.00 a month. The rent on my house today in 2007 is now $1,200 a month and the average starting pay for a painter is $12.00 to $14.00 per hour. I worked 20 years to make less money then when I started. What happened to working your way up in your career? The blame for this can not be blamed on the foreign worker, but on the employer that hired him or her. Your wages should be based on your experience and on the quality of the job you do, not on who does it the cheapest. As a small contractor, I could not compete with the bigger companies so I had to turn down a lot of jobs, hence the use of cheaper labor, whether abroad or in the United States makes it harder for the small business to compete in the marketplace. The larger company who hires more workers at a lower wage can increase their output. This enables them to take on more business an increase their profit leaving less business for the smaller company.

Once companies cut their labor costs, they tend to look for other places to cut their costs, consequently companies then tend to make cuts in their benefits packages. Some of the ways they do this is by increasing the amount their employees pay for their healthcare or by not offering it at all. To summarize, you have people working less hours, for less pay and no benefits. What toll does this have on the American worker and his way of life?

In spite of outsourcing American jobs, there are those who will say that outsourcing is helping our economy and the unemployment rate. The household employment survey of Americans indicates that there are 1.9 million more Americans employed since the recession ended in November of 2001. There are 138.3 million workers in the United States today. ( Read, Katherine, 2006) Also there are those who would say that America has more new jobs as opposed to those that are lost. There are also those who would say that having products made at a lower price would enable the consumer to buy more of the things that they want, as opposed to just buying the things that they need.

Having more jobs and cheaper

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