Human Resources

Outsourcing : Is it Beneficial or Harmful to the

United States ' Labor Force (Your Name (Your University

2007

Introduction

The term outsourcing ' has acquired a negative connotation in the recent years when it is applied to the U .S . businesses . Fears of chronic job shortages and losses are heightened . The high costs of health and labor are claimed to have caused major companies to decide to offshore ' service sector and manufacturing jobs elsewhere . There has been an increase in the number of U .S . companies that use outsourcing ' through the years

p Stephanie Armour of USA Today reported that labor groups blame U .S . companies which hire foreign employees for the job losses (2004 ,

br 1 . Workers in foreign countries who are working for U .S . companies usually are covered only by their employment laws which often are lax compared to U .S . employment and labor laws . Other critics cite cheaper labor costs and lower labor standards which are the main reasons why U .S . companies outsource

Forrester Research Inc . projects that by 2015 , 3 .3 million white-collar jobs would be offshore (Hillsenrath , 2004 . Cato Institute in its Report entitled Job Losses and Trade : A Reality Check ' claims that for the period between 1993 to 2002 , a increase in private sector jobs was noted equivalent to 327 .7 million jobs were added but 309 .9 million jobs were lost (Lindsey , 2004 ,

.1 Moreover , for the period between 2000 and 2003 , employment in the manufacturing sector dropped to 2 .8 million but imports increased by .06 percent . Be that as it may , according to Lindsey the loss of jobs is inevitable and a necessary part of the larger process of innovation and productivity increases that is the source of new wealth and rising living standards (Lindsey , 2004 ,

.1

Outsourcing has in fact become a political issue as well . In the 2004 presidential elections , Democratic representative and candidate Kerry claimed that outsourcing jobs was a means for companies to avoid payment of taxes (Haniffa , 2004 ,

. 1 . In an international poll conducted by Zogby International conducted in 2004 upon the authority of Foreign Policy Association , it revealed that a majority of Americans , 71 believed that outsourcing of jobs is bad for the U .S . economy and 62 believed that there should be legislative measure that should be enacted to correct and remedy this (Zogby , 2004 ,

. 1

This shall discuss and elucidate on the concept of `outsourcing ' its origin and implications . It shall also endeavor to review available literature and statistics on the matter and evaluate the effects on the U .S . labor force , both positive and negative Finally , based on the literature discussed , a conclusion shall be arrived at based on the analysis

Overview : Towards a Conceptual Understanding of the Concept of

Outsourcing

The word was first used in 1980s according to Dr . W .L . Scheller , a noted expert on outsourcing (Erwin , n .d . pp . 1-2 . It applied to business enterprises that contract out work which before were all done...