How concerned should the U.S. be with “outsourcing”?
The term “outsourcing” has rapidly gained a negative connotation in the business
community in the United
The American Heritage Dictionary defines outsourcing as,
“The procuring of services or products, such as the parts used in manufacturing a motor vehicle,
from an outside supplier or manufacturer in order to cut costs.”
What this means is that
outsourcing is truly anytime that one company, individual or country uses another company,
individual or countries’ products or services.
In the international community, the stigma over
outsourcing focuses on one aspect of outsourcing called “off-shoring”.
Off-shoring is the
removal of businesses or jobs from ones home country and the movement of that job to another
host country, where some type of advantage can be found; as opposed to on-shoring, which is the
exporting of jobs to rural parts of the United
Because of this, the term outsourcing can
be thought of as and will be used interchangeably with the terms off-shoring and off-shore
The overt concern that the average American places on outsourcing can be seen in the
popularity of books such as
The World is Flat
by Thomas Friedman, The Tipping Point
Malcolm Gladwell, The End of Poverty
by Jeffrey Sachs and Three Billion New Capitalists
The unifying topic in each of these books is that the global economy was once
dominated by the west, and that this dominance is slowly being whittled down in an increasingly
“flat world” (Friedman, 2005). Outsourcing began gaining popularity in the early 1980s with the
increasing dissemination of the world wide web and the availability of the internet (Noe, 2009, p.
The reason for all the controversy over off-shoring is because close to 1 million white-collar
jobs have been moved from the United
States to India, eastern Europe, Southeast Asia and
China in the last eight years.
The effects that this has had on the United States is not just the loss
of these jobs, but is compounded by the loss of salary growth (Noe, 2009, p. 109).
typical recession, salary growth in the United
States is typically six to eight percent; however,
over the past ten years, the average salary growth during an economic recovery has been
To further exasperate the problem, the first decade and a half of serious
outsourcing by the United States was in fairly low wage, low skill jobs to countries mostly like
Mexico, China and Latin American countries (Prestoweitz, 2006, p. 246).
These jobs were in the
areas of copying, construction, agriculture, and were not thought of as a serious threat to the
juggernaut that was the United
However, for the past eight or nine years, the
type of jobs that have been leaving the United States have been high pay, high knowledge base