issues in global trade and finance

a study of the global nature of our economy and the effects of the global economy

Tuesday, April 19, 2005

Why outsourcing is good for the U.S.

The article, What’s Really Happening with Jobs and Outsourcing?, by Alison Acosta Fraser, is a lecture that gives a fundamental look at why many Americans view outsourcing jobs to other countries negatively. She starts by using economic statistics to show how well the U.S. is doing with economic growth and questions why there is so much bad news about job growth. One reason she says is “Most forecasts were optimistically looking for February jobs growth of 150,000. Instead, we saw relatively flat growth of 21,000 payroll jobs” which was reported in the media. The truth about job growth is not at all negative. In fact, in the United States, “The Bureau of Labor Statistics collects this information by conducting two different surveys: the payroll survey and the household survey.” The payroll numbers are negative because they do not include the self-employed contractors and consultants, which are changing the work forces image, along with the agricultural industry as well. She gives a little hesitation about the positive household survey figures which suggest that the numbers are not as accurate, possible due to the test group. Fraser does a great job of explaining the differences between the two surveys as well as the faults of each and says that “Even the most persnickety economists begrudgingly admit that perhaps the truth is somewhere between the negative payroll and the positive household numbers.” Fraser is trying to relay the message that outsourcing is good for the American economy, through this article, with facts like other countries outsource to the U.S. and that outsourcing solves serious issues like poverty through re-distribution of wealth which in turn promotes democracy. I would have to agree with Mrs. Fraser’s article especially when she concludes that “Instead of increasing the minimum wage, extending unemployment, or increasing other regulations to prevent outsourcing, we should focus on policies that create jobs like lowering the burden of regulation, attacking frivolous lawsuits through tort reform, and implementing pro-growth tax policies.”

2 Comments:

  • At 2:50 PM, symonekayla said…

    I really enjoyed reading this article. There is always so much controversy when it comes to outsourcing. I have seen surveys that take polls from many factory workers. Of course they view it negatively.

     
  • At 11:43 PM, prmars said…

    While I'd like to believe that outsourcing can be a good thing, I have seen little evidence to convince me that this is the case. True, few Americans want to work in telephone support centers or phone sales offices, but one must examine the customer's side of outsourcing. For example, if you call Dell Computer's support line, you will usually end up on the line with someone from an Indian Call Center. I admit most of them speak fluent English and are quite courteous, but unfortunately, they are rarely equipped to handle a customer problem. They have the proverbial "911 Flip Chart" to refer to, but are usually completely unfamiliar with the products they're supposed to be assisting with over the phone. There have been many times that I've been put on hold while the Indian CSR puts in a call to an American technician in order to find information about my problem. I fail to see how this really saves any money, as now there are not one, but two international calls being made and I'm still requiring support from an American Customer Service Center. The only workable alternative I've found is to call around 8:30am Central time so I get bounced over to the Australian tech support center where they actually have a technician on duty that can assist with my call.

     

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