Outsourcing of American Manufacturing Jobs

A machinist goes into work just like he has been for the past 20 years; suddenly he is told that

his job has been eliminated. If you think that your manufacturing job is safe, you would be

wrong. Throughout your working career there may come a time that you will lose your job or

have to change careers due to outsourcing. What is outsourcing? Adams (2006) states, “True

outsourcing is nothing more that shifting a company’s non-core function to a third party which

makes those functions its core competency while delivering economies of scale” (p.1, para 5).

Companies in the manufacturing sector are resorting to the outsourcing of American

manufacturing jobs without taking into consideration the potential of indirect costs that may

come with it.

There are many indirect costs that come with the outsourcing of manufacturing jobs that are

not taken into account by the white-collar workers. For instance, the quality of product could

decrease due to lower technology and un-skilled workers. There will be an over abundance of

inventory due to the long lead time that is needed for a buffer because of long shipping times.

Another large cost is that of the need of a holding warehouse to store imports for inspection.

Please see List 1 for more outsourcing losses by Adams (2000).

List 1:

Outsourcing of Jobs 3

Outsourcing of jobs is creating concerns with the impact that it may have on the economy of

the United States. Gnuschke, Wallace, Wilson, and Smith (2004) stated that:

In the absence of strong job creation, the weak labor market and the prolonged economic

recovery have generated an enormous amount of concern about the outsourcing of production

and jobs to other countries. If the economy had expanded rapidly and started creating job

opportunities after the recession ended in the fall of 2001, the intensity of concerns about

outsourcing would have been swept away by the euphoria of the economic expansion. Since

job creation has been nonexistent since 2000 for most areas of America, it is understandable

that American workers, businesses, and government officials are increasingly concerned

about the welfare of the U.S. economy (para 1).

There are those that think outsourcing is good for the economy; that it helps the United States

by keeping white collar jobs and moving more of the service jobs overseas. In some ways they

are correct. However, this is not true when it comes to American manufacturing jobs.

People whom agree with the outsourcing of American manufacturing jobs believe that it

could help the economy by causing an increase in higher skilled labor and move the lower skilled

labor overseas. They are wrong; by moving these American jobs it would cause an increase in

unemployment and welfare benefits for the government thus hurting the economy. The

government would also have to supply grants to the workers to get a higher education because of

the costs involved. If the government does not supply these grants the blue-collar workers would

be forced to spend thousands of dollars that they do not have to seek higher education.