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The Impact Of Outsourcing On The US Economy

673 Words3 Pages

Introduction One of the most important consequences of the forces of globalization and liberalization has been the integration of economies in terms of freer movement of goods, services and people. As trade barriers have reduced, it has become easier to engage in trade and exchange resources across economies for achieving efficiency and effectiveness in operations. This has also created problems in terms of job losses for the developed nations as increasing number of jobs are assigned to employees in developing economies where the cost of labor is low. This phenomenon of outsourcing has been analyzed in this paper in terms of its impact on the US economy and jobs, the current status and steps to avoid the same. Outsourcing and its impact on US economy/jobs …show more content…

As an example, payroll accounting is a peripheral task for a banking company since the core operations of banking company is related to funds management. As such, they can consider outsourcing this task to third parties who specialize in the performance of this task to save time and focus on the core operations. This phenomenon has gradually expanded to include third party vendors from other economies that results in job loss in the home economy. Moreland (2014) has stated that outsourcing may have benefit corporations as they try to trim costs and increase profits, however, workers and consumers are facing lots of problems due to quality, shipping and cultural issues. There is the added risk of technology theft in which the vendor can actually emerge as competitor in the near future as it gains an understanding of the supply chain and business processes of the company that started outsourcing

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