Guzman 1

Ashly Guzman

Professor Lucia

ENGL 21002

May 19, 2017

Outsourcing: The meaning of and its effects

The debate on outsourcing is something many people have a stance on, whether you live

in a larger country or a smaller one, there is a chance this debate exists but it is very rare to find

answers in the large conversation that is outsourcing. In America, most manufacturing jobs have

been outsourced. In a country where the blue-collar Midwest are idolizing politicians who claim

they will bring back the jobs, you can imagine that outsourcing is a controversial topic. While

some see outsourcing as a survival of the fittest contest for companies desperate to keep up

with one another a lot of people think of outsourcing as an unnecessary corporate hunger for

more money. Yet, while everyone keeps pointing fingers no one ever looks for another cause.

Over the years consumerism has taken over America and the demand for goods has grown to a

volume beyond American factories abilities. And as we buy, buy, buy our workers in America

cannot fulfill the demand fast enough. Outsourcing in itself is not an unethical way for

companies to use cheap labor it is a way for companies to cater to the ever-growing American

demand.

Outsourcing is the new epidemic where companies are increasingly moving jobs overseas

to make products at a cheaper production cost, the American people are feeling betrayed since

their labor is being stolen from them by foreign underpaid laborers. Many people have a

specific view concerning outsourcing. Outsourcing has helped America in many ways especially

economically. During the 2008 recession, many companies were faced with economic losses and
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they deemed more lucrative to both outsource and import than produce at home. Yet, with their

profits, many companies were able to invest back into their American branches of production/

services creating more jobs at home and helping the economy along with it (Bustler). Many

people believe the lack of jobs is hurting socio-economic welfare in fact a June 2015 NBC

News poll found that 66 percent of the U.S. public says protecting American industries and jobs

by limiting imports from other countries is more important than allowing free trade so you can

buy products at low prices no matter what country they come from. One month earlier, a poll

from Ipsos Public Affairs found that 84 percent of the U.S. public believes that protecting

American manufacturing jobs is more important than getting Americans access to more

products when trade agreements put U.S. jobs at risk. The findings are relevant for the TPP,

which includes special protections for firms that offshore U.S. jobs to countries like TPP member

Vietnam, where minimum wages average less than 60 cents an hour (Public Citizen). but that is

simply not true.

While outsourcing may presumably be hurting the local markets and societies it is

actually helping underdeveloped countries all over the world. Take, for example, call centers in

El Salvador, where thousands of deportees are taking the calls of millions of Americans. These

workers were most commonly associated with gangs in the U.S and when deported were faced

with the constant harassment of terrorist gangs in El Salvador. By working in the call centers, the

deportees were able to work [many Salvadorians wouldnt hire them out of fear of their gang

affiliations], stay out of the gang wars and somewhere able to then create their own business

(Blitzer). In theory, the rise in skilled low wage workers in foreign countries should push local

and federal governments to fund education so that its nation can have the highest skilled

individuals compared to its low-wage international counterparts. This is not the case of America,
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when the nation used to be the leader in education it has now fallen below the top 10 (Kiersz).

And over the last ten years, education funding has been forgotten by the government and instead

more funding is going to national defense in a country that isnt under any imminent threat.

The main claim being made by anti-outsourcing individuals is that people in these

countries are being paid next to nothing for their work. But this is only true when compared to

American wages. When these wages are compared to the countries the workers belong to they

make much more than their local counterparts. In the company Samasource wages are higher

when compared to the local business in the countries it works in. And the people working for

Samasource have enough money to pay for necessities and save (Bornstein).

The second claim being made is that American jobs are being taken by the unskilled

cheap overseas labor, but in April of 2016 there were 5.78 million job openings, according to

Labor Department data published Wednesday [June 1st, 2016]. That matches the all-time high set

in July 2015. The openings are across a range of industries. Manufacturing, trade, and

transportation each had posted north of 46,000 jobs. Such a high overall number open positions

are both good and bad news. On one hand, it means employers are hiring more. At the worst part

of the recession in 2009, there were only 2.3 million job openings. But on the other hand, it is

also a symptom of a growing problem in the U.S. economy, where employers cant find skilled

workers for the jobs that they need. That disparity is called the job skills gap, and its a major

challenge right now (Gillespie). With such vast majority of jobs being created, it baffles many

why people are not focusing on the real problem at hand, not outsourcing, but education. If more

education and unemployment training programs were funded the people affected by outsourcing

could become qualified for the STEM jobs available.

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The main issue with the conversation is that many overlook the causes of outsourcing.

They overlook this by focusing on the aforementioned misconceptions. The main cause

blamed for outsourcing is corporate greed. On the surface that may be a valid argument but in

theory it doesnt work. Businesses focus a lot on their target demographics and on their demand.

Many of the companies who outsource have no target demographic because they target everyone.

For example, as makeup companies would target teens and department stores would target

parents and elders, other companies like Goya who sell food goods would try to target everyone,

because everyone eats. Therefore, Goya has a higher demand for their goods because they appeal

to everyone and food is a necessity while makeup and washing machines arent. Using this

knowledge of demand if there was a food shortage in the United States Goya would outsource.

Not only because they want to sell food to everyone who needs it but because they need to keep

their goods more affordable than their competitor. By outsourcing Goya would be able to sell to a

larger amount of people while spending the same amount of money on production. This

maximizes profit and helps feed America allowing for people to work and feed their family. And

as workers work more because they are fed, Goya would invest more money back into American

factories.

The reason this theory works is because of the growing consumerism in America. John

Cairns, Jr. of the Department of Biological Sciences in Virginia Polytechnic Institute and State

University, researched consumerism growth and the effect it has and found that although it has

only 4% of the worlds population, [America] consumes approximately 25% of the worlds

resources the present rate of resource consumption is unsustainable. When such a discrepancy

exists in our rate of consumption its easy to see why companies are forced to outsource to keep

up with our materialistic nature. In 2011, Americans were spending 1.2 trillion dollars on non-
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essential goods. This could be sing of American economic growth relying profoundly on

consumerism, therefore, it pushes a demand for superfluous goods (Whitehouse). But the reason

this corporate hog explanation may date back to the 1920s during the first recession. In the

1920s the stock market was in turmoil and people who had stocks lost them all including the

banks. People who saved their money in the bank had lost it too since the bank invested it.

People were tired but they had to go for industrial jobs. The Industrial era changed the way

organizations worked together. Amid this period, organization leaders began to outsource a few

administrations, instead of keeping them in-house. Agencies began opening their ways to serve

various customers. Frequently, they were situated in the same city from the organizations they

were performing administrations for. After some time, fabricating organizations found that they

could outsource the creation of customer products, for example, apparel, shoes, and toys. By the

1970s, numerous buyer electronics items were fabricated abroad. And with the vast production of

made in china products people who lost their jobs began to despise corporations who shut

down their American branches.

Outsourcing has some horrible stigmas attached to it, but I wonder if people will feel

differently if they realize they are a part of the problem. Consumer response is everything to

corporate business; therefore, if people begin to riot against their made overseas products but

they are still selling them, they will not stop. Although this may seem like an attempt to victim

blame consumers it is actually a chance to make people open their eyes. While many love

chanting Make America Great Again and Buy American, Hire American, they need to realize

if you support these companies by purchasing their products, you take part in the market, and

you support them with your money, you may be just as guilty as they are.
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This is not to say all companies are amazing, guilt-free mortars, or that outsourcing

doesnt have horrible effects on local societies and ecosystems, but it should be said that the fault

does not fall entirely on them. The growing consumerism is equally as guilty for pushing these

companies away. The solution to stop outsourcing is not to stop buying things made outside the

United States or to riot against these companies. It is too late for that; an extremely large portion

of American consumer goods are made overseas. The only way that people would be able to see

their driving force behind outsourcing is if they do their own research. We live in a time where

mainstream new media and politicians misconstrue the facts to work in their favor, so it is our

responsibility to educate ourselves before we begin pointing the finger at companies.

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Works Cited

Blitzer, Jonathan. The Deportees Taking Our Calls. The New Yorker, The New Yorker, 23 Jan. 2017,
www.newyorker.com/magazine/2017/01/23/the-deportees-taking-our-calls.

Bornstein, David. Outsourcing Is Not (Always) Evil. The New York Times, The New York Times, 8
Nov. 2011, opinionator.blogs.nytimes.com/2011/11/08/outsourcing-is-not-always-evil/?_r=0.

Busler, Michael. Outsourcing Is Good for the U.S. Economy. Communities Digital News, 19 Sept.
2014, www.commdiginews.com/politics-2/outsourcing-is-good-for-the-u-s-economy-26113/.

Cairns, John. Consumerism and the 21st Century Lifestyle . Department of Biological Sciences,
Virginia Polytechnic Institute and State University, Blacksburg, Virginia 24061 USA , 2006,
www.johncairns.net/Papers/consumerism.pdf .

Gillespie, Patrick. America Has 5.8 Million Job Openings, Matches All-Time High.CNNMoney, Cable
News Network, 8 June 2016, money.cnn.com/2016/06/08/news/economy/us-economy-job-
openings-quits/.

Kiersz, Abby Jackson and Andy. The Latest Ranking of Top Countries in Math, Reading, and Science Is
out - and the US Didn't Crack the Top 10. Business Insider, Business Insider, 6 Dec. 2016,
www.businessinsider.com/pisa-worldwide-ranking-of-math-science-reading-skills-2016-12.

U.S. Polling Shows Strong Opposition to More of the Same U.S. Trade Deals from Independents,
Republicans and Democrats Alike. Public Citizen, July 2015,
www.citizen.org/documents/polling-memo.pdf.

Whitehouse, Mark. Number of the Week: Americans Buy More Stuff They Don't Need.The Wall Street
Journal, Dow Jones & Company, 24 Apr. 2011, blogs.wsj.com/economics/2011/04/23/number-of-
the-week-americans-buy-more-stuff-they-dont-need/.