Offshore Outsourcing and It's Economic Impact on U.S.

Abstract

Economic changes that affect employment usually produce conflicting viewpoints and angry rhetoric. During an election year, the rhetoric is hugely amplified. So it's not surprising that offshore outsourcing is caught in the perfect storm of rhetoric, politics and 24-hour news analysis.

This paper discusses different views on anti-outsourcing and pro-outsourcing. It also states economic data and survey results which leads us to an understanding that instead of having protectionist approach towards the U.S. jobs, we should have policies in place, which would help the U.S. workers to retrain themselves in new immerging technologies in short run. This will allow workers to get a high skilled, high paid job and allow corporations to compete in global market by benefiting from the lower cost of offshore outsourcing.

Offshore outsourcing and it’s economic impact on U.S.

Economic changes that affect employment usually produce conflicting viewpoints and angry rhetoric. During an election year, the rhetoric is hugely amplified. So it's not surprising that offshore outsourcing is caught in the perfect storm of rhetoric, politics and 24-hour news analysis.

Outsourcing is not a new concept. Before the concept of offshore outsourcing became front-page news, many large companies already had operations all over the globe. But in recent months, small and medium sized companies have started following the lead of their larger counterparts. A recent survey of CEOs from small and medium-sized businesses revealed that 27 percent intended to outsource certain functions overseas in the next three years.

U.S. software programmers' career prospects, once dazzling, are now in doubt. In the past 3 years, offshore programming jobs have nearly tripled, from 27,000 to an estimated 80,000, according to Forrester Research Inc. And Gartner Inc. figures that by yearend, 1 of every 10 jobs in U.S. tech companies will move to emerging markets.

There are conflicting views as how this off shore outsourcing in IT and service industry will impact the U.S, workers and economy.

Views of Executive Council of AFL-CIO (American Federation of Labor and Congress of Industrial Organizations.)

Executive council of AFL-CIO is concerned that after two decades of devastation of the U.S. manufacturing sector and the permanent loss of millions of high-wage, good benefit, middle-class jobs, America is now threatened with a similar hollowing out of its service sector. Among the millions of service jobs threatened, now high paying, professional and technical career opportunities are also at serious risk due to the growing off-shoring trend.

The council emphasizes on recent studies and analyses that predict direct consequences, should current trends continue unabated. What these reports make clear is that any work that can be digitized and transmitted through cyber-space is a target for export:

• Forrester Research Inc. predicts that American employers will move about 3.3 million white-collar service jobs and $136 billion in wages overseas in the next 15 years, up from $4 billion in 2000.

• Gartner Inc., a high-tech forecasting firm, estimates that 10 percent of computer services and software jobs will be moved overseas by the end of this year.

• A survey