Outsourcing Jobs to Foreign Countries

Outsourcing manufacturing, service related jobs and high technology jobs combine to pressure labor markets. This essay will identify factors pressuring job security, education and need to remain leader in technology advancements. Outsourcing skilled labor will challenge nation to adjust domestic resources to strive in a progressively more integrated global labor market. Workers are increasingly distressed about the echelon and security of their earnings while global competition, swift technological advances and efficient distribution lowers wage and employment predictability domestically.

Developing countries increased manufacturing exports and developed countries imports increased (Global Economic Prospects, 2007). Manufacturing and service related jobs are outsourced whenever possible by domestic companies leaving American workers without jobs and under educated. Most of these workers do not have the financial means to re-educate or are too old to re-enter the job market. Outsourced jobs help poor underdeveloped countries by increasing the standard of living. Domestic monitoring of outsourced jobs is not performed leading to uncertainty on adjustments needed to absorb both the displaced workers and financial impact. A U.S. study (Brofenbrenner and Luce 2004) concludes that the Bureau of Labor Statistics reported 4,633 private sector workers in establishments with 50 or more employees lost their jobs due to global outsourcing from January to March 2004. Studies on media reports, find evidence of a minimum of 25,000 jobs lost over that period. Statistical analysis using data from outsourced jobs to foreign countries is component of understanding the impact on the domestic work force. Indications are that the U.S. Government grossly under estimates effects of outsourcing

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jobs to foreign Countries. Domestic policy dangerously ignores outsourcing jobs to foreign countries, proper monitoring would allow adjustments supporting the domestic economy and educational climate.

Diminishing telecommunication cost enables the service value chain to be performed in different locations around the globe, coupled with growing numbers of English speaking workers in foreign countries contribute to the phenomenon of “outsourcing” or “offshoring”. By 2030 China and India together will account for about 40 percent of the world’s workforce, which will remain predominantly unskilled (Global Economic Prospects, 2007). The language barrier has been reduced but has not been eliminated; consumers needing service support grow increasingly frustrated speaking to foreign customer service. Domestic companies advertise locally owned and operated edging on better service and quality of products due to being built or performed in America. Service quality has decreased in return devaluing products developed domestically. Therefore the only advantage domestically to outsourcing service related jobs is purely for monitory gain. Workers in foreign countries are educating or re-educating adjusting to inherit the service value chain globally.

Learning institutions in foreign countries are gaining ground on domestic resources. United States has a strong export position in higher education. In 2005-06, U.S. institutions of higher learning trained nearly 600,000 foreign students, of whom about half were studying for graduate and professional degrees (Embracing the Challenge of Free Trade: , 2007). Foreign students educated in the United States bolster foreign resources in a highly educated work force. Enormity of available scientists and engineers

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in foreign countries lead to advanced innovations in those countries. “In recent models of endogenous growth, innovations lead to new products and processes that are to some extent protected by patents and other institutional mechanisms that return profit to the innovator and bolster the incentive to invest” (Global Economic Prospects 2007, Chapter 4 p.116). Attracting investment dollars by creating technology advances leading to patens, securing advancements with intellectual property rights are crucial to maintaining and or increasing advantage in a Global labor markets. Foreign students earning advanced degrees often work domestically diminishing the effects of training them. Expansion of intuitional resources domestically to absorb displaced works and to offer re-education programs is not properly managed due to the lack of requiring domestic companies to report outsourced jobs. Without embracing and encouraging the domestic work force to become lifelong learners diminishing developments in breakthrough technology is in nation’s future.

United States greatest challenge is to remain a technology leader in a progressively more integrated global labor market. Failure to enhance protection of intellectual