This website uses cookies to ensure you have the best experience. Learn more

Outsourcing And The Us Economy Essay

2505 words - 10 pages

Outsourcing – Don't Get Bangalored?

As the world has gotten “smaller” in terms of trade, outsourcing has become a hot topic in much political and economic debate in the United States.

An Associated Press-Ipsos poll in May 2004, found that 69 per cent of Americans thought that outsourcing hurts the US economy while only 17 per cent thought it helped . President Bush’s chief economic advisor Greg Mankiw has stated “outsourcing…is something that we should realize is probably a plus for the economy in the long run” . While John Kerry has emphasized, that he is going to stop the outsourcing of American job . With the presidential election coming up, and the candidates giving mixed signals about the effects of outsourcing, it could turn out to be a decisive issue. A recent poll said 22 per cent considered outsoursing somewhat important while 68 per cent said it was very important . Not to astray, for many years Americans have witnessed the outsourcing of labour-intensive production, such as manufacturing. And the US economy has actully gained from it, in terms of higher productivity. But on the other hand, for many Americans outsourcing posses a real threat. However, in recent years services, which earlier was characterized as non-tradable, are also outsourced. As developed countries, like India and China, are able to offer cheap skilled labour surely there is a great enticement for US firms to move such services abroad, thus shifting jobs abroad. Where will that leave the US and its skilled workers – are they in a sense getting Bangalored?
In this paper, I will present evidence that argues both for and against outsourcing.
I will first point out main points of Jagdish Bhagwati’s paper “The Muddles over Outsourcing” and support it with other mainstream economists’ views on outsourcing.
Secondly, I will outline the arguments in Paul Samuelson’s paper “Where Ricardo and Mill Rebut and Confirm Arguments of Mainstream Economists Supporting Globalization” to contrast the mainstream theory. Finally, I will also introduce the theory of immiserizing growth.

A glance at staticstics

Is the public concern over outsourcing valid?

The most cited official projection outsourcing is by Forrester. It is estimated that outsourced US jobs will grow from about 400,000 in 2004 to 3.3 million (recenty revised to 3.4 million) by 2015 which seems quite significant. But on a yearly basis this accounts for about 250,000 jobs but in perspective the number is small compared to the total US employment of 137 million. It actually only constituate less than 2 per cent of 15 million Americans who lose their jobs each year . Goldman Sachs estimates that offshoring has accounted for 500,000 million lay offs in the past three years. A study by Ashok Deo Bardhan and Cynthia A. Kroll at the University of California, Berkeley indicates that up to 14 million Americans now work in occupations that are at risk of being outsourced . Forrester also estimated that...

Find Another Essay On Outsourcing and the US Economy

Arguments Regarding the US Economy from Conservative and Liberal Mindsets

6811 words - 27 pages Arguments Regarding the US Economy from Conservative and Liberal Mindsets Introduction The Republicans and Democrats have similar and different views on how to handle the United States of America and its immense economy. Both of the parties are more ideologically alike than different. Both parties support the United States Constitution, private property, free enterprise, and our individual freedom. Both view government's role as a

US mexico border culture and economy history

2617 words - 10 pages continued foreign investment helped bring about the Mexican revolution, which for a short period harmed the Mexican economy. This first cycle of economic upturn after the slight stutter of the revolution was relatively short lived and showed the fragility of the supposed interdependence.The onset of The Great Depression highlighted the dependency of Mexican border settlements on the U.S. Three hundred thousand U.S. citizens of Mexican origin were

Roles of the US Government in the US Economy

1245 words - 5 pages How the US Government plays a role in our US Economy Fiscal responsibility is an important part of stability and the government must focus on maintaining the economic stability. As we all know, Government dept can quickly become a burden on the economy and weaken it. Macroeconomic policies change credibility of the government and strengthen political institutions. It is very important that our economy has credibility and stability because it’s

What went wrong with the US economy?

1066 words - 4 pages What went wrong with the US economy?Recently economic news made the evening headlines and became a major concern for the average person. A crisis is looming and people are understandably interested and anxious.The main reasons the US economy is in chaos today are a result of several blunders committed by the banks and the government starting well before the Bush era. These blunders resulted in the meltdown of the housing market, followed by

US Economy Today: The lackluster Recovery

1145 words - 5 pages ; according to the US Inflation Calculator, the inflation rate reached 1.0% in October, hitting the lowest since 2010. The GDP growth rate is 3.6% in third quarter, which shows an slight increase from second quarter, shown by data published by the Bureau of Economic Analysis. What are the main reasons as to why this recovery has been so lackluster? The first reason is that the 2007-2009 recession was caused by the housing bubble and the collapse of

The Great Depression: Social Programs and the Recovery of US Economy

3273 words - 13 pages are however some minor flaws in their theories, in how they are relevant to the modern era. First of all there is a trend in the population growth that does show a decline in the birth rate, and there is plenty of food to go around three times over in the United States. On the other hand, in today’s modern economy we are no longer dependent on our ability to produce food, there is plenty. We are however dependent on the resources necessary to

Global Warming, its effects on the US Economy, the enviroment and more

5148 words - 21 pages . Increasing the concentration of these gases in the atmosphere increases the atmosphere's ability to block the escape of infrared radiation. In other words, the earth's insulator gets thicker. Therefore too great a concentration of greenhouse gases can have dramatic effects on climate and significant repercussions upon the world around us. Climates suitable for human existence do not exist simply above some minimum threshold level of greenhouse

Increased Canada-US Border inspections and their affect on the economy

993 words - 4 pages increased, and tighter, Canada-US border inspections. Because of the tighter border, the lines at customs are longer and less friendly. Americans are less willing to cross the 49th and venture into Canada, which is having a huge effect on the Canadian economy. The United States is also the destination of close to 85% of Canadian exports, and stricter borders are hurting trade. Trucks containing goods going to the US from Canada (and vice versa) are being

This is an Article analysis for an Economics class. Examines the US economy and inflation

627 words - 3 pages If someone earns a sum of money, and saves it rather than spends it, then, in no way can a person be losing wealth if not for inflation, which prompts the prices of all goods and services to rise. One may see this as a trend among businesses to maximize their profits. In reality, the root cause of the problem is not with businesspeople, but the Federal Reserve System continuously adding more money into the economy. The article I have chosen to

The Replaceable Worker: The Impact of Outsourcing on the American Economy

1631 words - 7 pages outsourcing. As a consequence, the persistence of high unemployment rates retards economic recovery (Goldberg 1). Notably, the employment rate is a direct reflection of an economy’s health. In order for the economy to strengthen, contributions such as the purchasing of goods and paying taxes need to be obliged by the citizens. Regrettably, the unemployed with no income can not make a contribution to the economy. Instead, unemployment insurance presents

Labor in the United States and Outsourcing

1158 words - 5 pages during the 1980s that the process kicked off mainly due to the efforts of corporations when they began to hire labor forces across the world. Even though outsourcing has come out from its developing stages, there are still following effects on the US economy. Since the concept of outsourcing was introduced it has been a subject of debate between politicians and citizens of the United States. Remarkably, it was the United States who supported

Similar Essays

Outsourcing And The Us Labor Market

1684 words - 7 pages . "Outsourcing And The US Labour Market." World Economy 34.2 (2011): 192-222. Business Source Premier. Web. 6 Mar. 2014. . Bae, Sang Hoo, Chung Sik Yoo, and Joseph Sarkis. "Outsourcing With Quality Competition: Insights From A Three-Stage Game-Theoretic Model." International Journal Of Production

Thomas Jefferson And The Us Economy

1048 words - 4 pages â?. (Sheets). This he pointed out will set off a scramble between states and some will get more than others only causing more problems.Hamilton thought that a national bank was necessary to streamline the economy. Jefferson, however, didnâ??t believe the Constitution granted the power to the government to create banks. Jefferson distrusted both the proposals and the motives of Hamilton. He thought Hamilton's financial programs to be

Outsourcing: The Demise Of The U.S Economy

1493 words - 6 pages Outsourcing: The Demise of the U.S Economy As many people around the nation are aware of, the nine to ten percent unemployment hike in a span of just 3 years (Fig. 1 U.S Bureau of Labor) is just tearing the United States economy from the inside out. Millions of people in the once mighty U.S work force are now barely making ends meet and thousands more are fighting a losing battle to keep a roof over their heads as the growing unemployment rate

Judging The Us Economy Essay

716 words - 3 pages For a clearer picture of the U.S. economy here are some of the trends that affect us today. These indicators are the financial market, industrial sectors, inflation, unemployment, and consumer market. Some of the more modern indicators are the sales of cars, new housing starts, and sales of durable goods.Prior to September 11, we learned that the recession began in March of 2001. In fact, the percentage of consumers rating today's economic