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Outsourcing wasn’t formally recognized as a strategy in business until the year of
1989
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Outsourcing has its disadvantages also; outsourcing can be
a gamble to companies, rapidly increases the unemployment rate, and have immense unknown
costs for firms
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Outsourcing is when a company hires another business for a specified service
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The Merriam Webster dictionary defines outsourcing as, “to procure
(as some goods or services needed by a business or organization) under contract with an outside
supplier
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By the 1980’s, billing accounting, and
word processing were being outsourced
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In the year of 2013, over 2
million occupations were outsourced
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In 2013, 43 percent of the IT sector, which is known as information
technology, was being outsourced
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Followed by 12 percent of call
center jobs are being outsourced (Selvaggio)
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The first reason outsourcing benefits America is by raising both national and
international markets
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” These savings created about 90,000 total new
jobs, at the end of 2003
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6 billion to the United
States gross domestic product (Outsourcing Creates Jobs, Study Says)
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Fritz Foley, and James Hines concluded a 10 percent increase of foreign
investment associated with a 2
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While outsourcing
benefits foreign economies it also increases the U
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The Wall Street Journal, in
February 2010, claims that successful foreign operations of U
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multinationals enlarge foreign
and domestic employment (Outsourcing Jobs and Taxes)
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Grey, “The U
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economy and the world

economy are linked in many ways
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” Therefore, increases in the global
market have been correspondent with advances of the United States economy
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To begin with, twenty to thirty
percent of net expenses decrease during a three to five year period if outsourcing is implied
(Korn)
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S
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For instance, if a company is expanding it will require corporate headquarters
or upper management to oversee new projects
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If companies outsource, they have the capability to save 60
percent on the fees of the outsourced task (Benefits of Outsourcing)
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Manufacturing laborers in the U
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average $27 per hour
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Manufacturing labor averages $2 per hour in the Philippines
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The hourly direct pay is based on the 2011 U
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Bureau Labon Statistics
(Correnti)
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Finally, outsourcing benefits the consumer
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S
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The U
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economy engages in international trade and obtains needed goods at lower costs,
which results in better returns on investment and more economically priced goods for U
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citizens
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For example, outsourcing caused computer prices to decrease by 10 to
20 percent making them more affordable (Laksin)
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The first reason outsourcing is harming the United States is it can be a significant gamble
on companies
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If foreign
workers are forced to take quantity over quality, this could cause a company to have a poor
image
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So negative or poorly planned events
are more likely to take place without the company’s consent
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If there is a leak of information the company could lose thousands of
dollars (Examples of Lower Quality with outsourcing)
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S
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The U
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Department of Commerce’s data conveys, “U
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multinational
corporations, the big brand-name companies that employ a fifth of all American workers… cut
their workforces in the U
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by 2
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4 million
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A University of California study affirms that 14
million white collar jobs are in danger of being outsourced (Roberts, Paul, Craig, PhD)
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Lastly, outsourcing can have secluded costs
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The company needs to find a vendor, to
perform the specified outsourced task
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If the vendor has an oversight the other
company’s image could be destroyed
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This can
cost anywhere from 0
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Sequentially, the most expensive part of this process is the
transition period; which can last anywhere for three months to a year (Hidden Cost of
Outsourcing)
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Outsourcing has the risks of
low quality goods, reduced management control, and threatens companies’
security
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9 million jobs
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Who knows what will happen to
America If companies keep gambling?
Outsourcing is both benefiting and harming the United States
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Outsourcing can harm a large firm’s image, skyrocket the unemployment rate, and have
large hidden cost for firms

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