Outsourcing in the United States
Smart for Business or Injustice for Workers?
Outsourcing is when one company sells a part of their company to another. This usually happens when the company wants to save money. Outsourcing was first mainly seen in the early 1980’s during a time of stagflation, or a time where economic growth is slow, unemployment rates and inflation is high. Foreign competition in trade had steady rates compared to the United States market and had a cost advantage over American goods. Car companies, which were suffering greatly during this time, took a radical step and moved about ten factories out of Michigan to Mexico (2,5).
This outraged the United Autoworkers Union (UAW) because American’s who worked in the factories that had been outsourced, were left jobless. UAW negotiated with the car companies to keep the outsourcing of the parts division to overseas countries (2).
The car factories use of outsourcing caught the eyes of other businesses: companies saw profit with the use of outsourcing. Soon after more and more companies began expand their companies in Mexico, on the Mexico-United states border. Many American citizens failed to notice the outsourcing that was beginning to happen on the United States-Canadian border. Outsourcing of filmmaking was a common in the 1990’s, but also to the manufacturing of parts. Canada’s trade with the United States began to increase and benefit, while American parts suppliers began to go bankrupt and lay off their workers (2).
This trend in outsourcing in the United States has been increasing steadily since its debut in the 1980’s, but now is being exposed to the average American. Common jobs, such as calculating worker’s payrolls, can be found in overseas companies, that provide cheaper labor, then it would cost if an American laborer worked for the company in the United States (1). Competition between companies is increasing, and companies that outsource have a great advantage over companies who only work within the United States territory. The cutting of jobs in American businesses is becoming increasingly common, leaving healthy, skilled, and knowledgeable people to suffer as they look for the few available jobs in their area. Companies take advantage of the cheap labor to allow their businesses to expand, which is the main reason that outsourcing continues to grow (3,4).
1. Defintion of Outsourcing. Http:/ / WWW. Mariosalexandrou. Com/ definition / outsourcing. Asp
2. Situations Responsible for Job Outsourcing to India. Http:/ / WWW. Mapsofindia. Com/ outsourcing – to – India/ reasons – for – outsourcing. Html
3. Schneiderman, R. 2005, October 20. Questions abound concerning where the next generation of EEs will come from and where they will find employment. Offshoring. Outsourcing. Out of Work. Retrieved March, 27, 2007 from source: http:/ / WWW. Elecdesign. Com/ articles/ index. Cfm? AD = 1& AD = 1&ArticleID = 11200
4. Outsourcing Statistics. Http:/ / WWW. Go4coustommer. Com/ outsourcing – Statistics.Htm
5. Outsourcing Statistics in Perspective. March 16, 2004. Http: / /www.Americanprogress.Org/issues/ 2004/ 03/ b38081.Html