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Outsourcing And The Us Labor Market

1684 words - 7 pages

What are the best ways for businesses to maximize profits? Businesses in the U.S. have answered this question with a very simple answer: make products overseas. This business tactic of using labor services from a third party is known as international outsourcing (Brecher 996). Within U.S. borders, there are certain regulations and restrictions on many aspects of the manufacturing process (Stephanie para 2). However, production is cheaper if they are made countries where regulations are less strict (Wood 25; Stephanie para 1). Despite the profits made from this technique, it can have some repercussions on the U.S. economy and the environment of nations occupying those factories (Marquis 39; Ahmed 192; Zhang 776). This springs a debate to whether more concern should be held for the outcry of Americans to bring jobs back to the U.S. (Ahmed 192; Stephanie para1) or to the freedoms of the businesses and their right to seek a profit (Salanţă 270).
Both sides can agree that outsourcing can be desirable for a business do to the potential profit. It allows goods to be made cheaper, management to run smoother, and money to be made faster (Salanţă 270). Both sides can also agree, however, that U.S. jobs are lost as a result of outsourcing (Ahmed 192), as well as environmental damage being cause due to corporations taking advantage of loose environmental regulations (Marquis 39). Upon digging deeper into this debate, one can find that both sides present very convincing arguments.
In many cases outsourcing has proven to be beneficial for businesses. It can help a business’s management by allowing executives to focus on the core structure of the firm rather than every specific element. Production, manufacturing, or additional services would be carried out by the third party in the foreign country while primary functions of the corporation could be concentrated on at home (Salanţă 270). The toy company, Mattel Inc., would serve as an example for this. Mattel designs and processes the toys then forwards the arranged product to a Chinese industry where it is manufactured and bought back by the company to sell to the American public (Bae 329). This would allow the company function without having to micromanage the production process (Salanţă 270). It would also benefit in significant cost reductions for labor and other aspects of the industrial process (Salanţă 270).
Countries such as India and China have considerable relaxed labor (Stephanie para 1) and environmental laws (Marquis 39): something that may prove to be profitable for many businesses (Ahmed 192). Foreign workforces that operate under American corporations are not covered under U.S. labor laws but only by the labor laws of the location in which they work. These labor laws in other countries are often far less strict than that of the United States. Where an employee in a foreign nation may get little to no coverage under employment laws, an American worker would be protected from...

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