Outsourcing And The United States

Outsourcing and the United States

Jim McCarthy

Axia College

Effective persuasive writing COM/120

Bryon Ford

September 2, 2006

Outsourcing and the United States

Outsourcing and the United States: benefit or not? Outsourcing, or off shoring, note many workforce experts, is simply a fact of a global economy. The fact is, the nine-to-five workday is no more, and because of that, United States employers have a choice. They can either go to the expense of hiring a 24/7 workforce to meet the needs of an international marketplace, or they can send there jobs overseas. There are also proven savings when it comes to off shoring as well, namely that workers in India and China are willing to accept less in the way of pay than workers in the United States will (Babcock, 2004). Nearly every United States company is off shoring, or at the very least, considering doing so (Babcock, 2004).

The situation we face here is that technology combined with globalization, which has given us rise to what Gorden (2002) calls, the "virtual state, the virtual corporation and now the outsourced workforce" (24).

But the question we run into here is, what is the impact on the United States workforce when a company off shores? How can something like sending jobs overseas (especially white-collar jobs) do anything except demoralize a workforce that is already skeptical to begin with in the wake of the 1980s through the 1990's downsizing trends? The answer we provide to this is, there can not be much advantage to the United States workforce when it comes to off shoring, because off shoring simply increases unemployment in the United States, while providing and emotional backlash against corporate America - one that, in the wake of the corporate scandals of the early 2000s, is not the best thing in the world for the business community. Furthermore, limiting off shoring could impact large organizations profits. General Electric's response to the furor, namely attempts to limit outsourcing could impact earnings (Hansen, 2004) which do not help the issue either.

Nor is it coming to an end any time soon, according to Forrester Research, Inc., approximately 830,000 United States service sector jobs (telemarketers, accountants, software engineers, chief technology officers, and others) will have moved abroad by the end of 2006, with 3.4 million additional jobs going overseas by 2015 (Brown and Wilson, 2005).

The literature, as can be imagined, presents a mixed issue. The upside, according to Mann (2005) is that prices are lower and variety of consumer goods and business inputs are greater, as is the process for innovation and efficiency. The downside, of course, is that United States firms go out of business, workers loose their jobs, and this had a bad effect economically on the communities (Mann, 2005).

Johnson and Hamblen (2004) for example, both note that emotional backlash against any plans to send jobs overseas can hurt the morale of talented, gifted employees back home. What does not help is, the senior executives do not communicate the information in the right way, they do not explain the reasons for outsourcing, they downplay the negative or concerns, they hide the plans for as long as they can, then wonder why their employees are so upset and angry when the news finally is apparent (Johnson, 2004).

Adding insult to injury in this case is the fact that a report issued during 2005 by PricewatterhouseCoopers demonstrated that less than half of the respondents to a survey querying the United States and European organizations found that outsourcing was actually effective.

On the other side of the coin, some experts point to the fact that one reason why outsourcing is becoming popular is because the United States workforce is not as well educated as it used to be (Gordon, 2002). Basically, instead of pointing students to a knowledge-based economy by better educating students (and immersing them strongly into technology), both public and private schools in the United States are graduating students who can't even meet the requirements for entry-level employment (Gordon, 2002). According to the Public Agenda report issued in 2000, high school graduates do not even have the skills to succeed at work; and during the same year, the National Association of Manufacturers reported that 40 percent of all 17-year-old workers did not have enough math skills to hold down a production job, while 60 percent did not have the reading skills to do so either (Gordon, 2002). One would hope that such statistics would end up being a wake-up