Outsourcing
Outsourcing refers to job functions and services being farmed out to third parties in business practice. For example, IT providers can outsource operations such as network services, QA testing, or even the whole of their IT functions (Overby, 2021). Outsourcing manufacturing involves using labor outside the company to either build the whole product or part assembly. Outsourcing production sections to third parties significantly reduces production costs since it engages assets already on sight without investing in fixed assets.
Impacts on American Economy
Outsourcing by companies in the United States benefits the U.S. economy and the foreign countries involved. The economy of the U.S. engages in international trade and acquires required commodities at reduced costs resulting in more economically priced items for Americans and better returns on investments (Correnti, 2021). Outsourcing also costs Americans their jobs that are transferred to foreign countries. Labor outsourced has better-paying levels compared to American living standards, thus dooming Americans holding those jobs to poverty (Correnti, 2021).
Impacts on Third World Countries
The majority of the people in developing countries are unemployed, and outsourcing helps to reduce these numbers. Wages also increase in developing countries that companies outsource to. Outsourcing to foreign countries stimulates investments towards them that boost their developing economies, improve their living standards, and allow them to engage in the global export market. Developing countries don’t have workplace regulations leading to poor working conditions, unlivable wages, abuse, unsafe working conditions, and often exploitation of child labor.
Opting for cheaper options, general convenience, and irresistible bargains are some reasons most Americans don’t think about products potentially being from unethical production (nypost.com, 2021). Yes, I believe it is vital for consumers to know the origin of products. This is because some manufacturing plants used to develop the commodities violate human rights with illegal practices.
References
Correnti, M. (2021). Outsourcing Overseas and its Effect on the US. Economy. Retrieved 30 November 2021, from https://www.ncbfaa.org/Scripts/4Disapi.dll/4DCGI/cms/review.html?Action=CMS_Document&DocID=14050&MenuKey=pubs
nypost.com. (2021). Americans prefer not to know where their stuff comes from. Retrieved 30 November 2021, from https://nypost.com/2017/11/01/americans-prefer-not-to-know-where-their-stuff-comes-from/
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