Outsourcing And The Realities

This may seem like funny-buisnesss, but this is real business today. Well, to an extent. We all know how The Onion loves to exaggerate! But as much as a spoof as this is, this video shows great insight into how and why American jobs are outsourced across seas.

First lets look at who this work is being outsourced to: India. India is a top choice for outsourcing internal labor within a firm because much of the population is educated, they are an English speaking country thanks to their British colonization, and they have a much lower standard of living, which means they are bucket loads cheaper to employ!

Philadelphia Accountant Donald Felton, the protagonist of the news story is a prime example of the American middle class worker whose job is being outsourced. His job requires education and skill, but for his employing firm it is so much more expensive to pay him and supply him with benefits compared to paying someone with the same education and skill level who is asking for so much less! Of corse, in the spoof news story Donald is the one outsourcing his job to Jaharana in Bangalore, and within this we can see how Jaharana readily accepts such low wages and knows that little amount will help put food on the table for his family, whereas that money for Donald was his Starbucks coffee for the day.

Outsourcing allows firms to cut costs on internal jobs like Information Technology, or telecommunications. Through outsourcing firms can now have access to specialists, educated people (like people who would work in IT), or just people who are willing to work for much below our minimum wage standards ( like a telemarketer or a call center receptionists). Either way, they are going to cut costs tremendously, and get the same quality work done as they would back in the states.

But now, we've got nearly the whole country scrambling as they wonder 'Is my job next'? Well, not exactly. Yes, many jobs are getting outsourced to countries like India, but not all jobs are worth shipping overseas. Jobs that require specialized training and education like engineering, and many service sector jobs that stay within out communities are not at risk. But as I have stated in previous posts, as the middle class educates themselves on the trending jobs in globalization, firms will soon be looking more towards Americans for expertise! It would be a complete divergence from the middle class we know today which very much revolves around low to middle education jobs, but eventually I believe its what will revive the American middle class and even the economy.

As of now we can't really help that many of our middle class jobs are being outsourced! Its capitalism, and it makes sense for business. We also need to look at it in the way that, yes we are employing people in other countries, but in the end all of that money is shooting right back to the US where that company headquarters. And, if we were to be keeping these jobs within the US, we would see prices hike! Outsourcing has allowed companies to keep costs, and prices lower than ever before. But, is it worth it? Well, we'll have to see.