The workforce and the effects of outsourcing
Lawrence Mosley
Capstone CAP 480
11/27/2012
Abstract
In this paper I hope to dispel some of the rumors about the effects and non effects of jobs being outsourced to overseas countries. I hope to show some of the reasons why firms consider outsourcing, and why some do it for the long haul. I will also expose why some companies will only outsource for a short period and then find themselves back in the United States. I will let you know why politicians make a big deal on the national stage about outsourcing. I hope to enlighten the readers about the jobs that get outsourced, and the reason for them being outsourced. While doing the research for this paper I found a lot of information that will help keep a person relevant to the job market, and prevent them from having to worry about their job being outsourced.
In this paper I will go over some questions that I have polled random people to see what their responses would be to some basic questions. The question that I have asked are more of opinion based, or knowledge based depending on how much one pays attention to the news and current events. I chose these questions to really inform the person being survey rather than trying to test the knowledge of the person being questioned. I knew we just had an election and allot of people had some sought of thought or opinion on the topic, whether they were right or wrong.
For the longest time the success of an economy has been measured by the growth of the jobs market, if the unemployment number is up then the economy is not doing as well as if it would do if the unemployment number were to be low. In the recent past we have seen and heard allot of debates and focus on the unemployment rate. Some may argue that the obstreperous divided congress is the reason that so much attention and lack of solutions being offered to the problems are attached to the unemployment numbers. When President Obama took the office of president the unemployment rate was 7.8, it is currently up to 7.9. With all the congressional party bickering and finger pointing with one party saying one thing and the other party saying another, it is easy to get lost and confused to the real reasons of the high unemployment numbers. Between the two parties they agree that the common problem for the loss of jobs was left at Chinas and other emerging markets feet.
The battle over whom and what is to blame for the current economic situation is a fierce one and is hard to figure out. I did a poll which basically asked who would do a better job at stopping outsourcing and keeping jobs here in the United States, and one hundred percent of the people surveyed believed that the President would do a better job than Mitt Romney. The two questions that were posed were; President Obama has done everything necessary to stop outsourcing jobs overseas, and Mitt Romney would have been tougher on out sourcing than President Obama. Like I stated both of questions leaned heavily toward President Obama, as the stronger of the two as being tougher on outsourcing. The fact is that both of the two have not done the absolute most they could have done to prevent shipping jobs overseas. (Morici, 2012) It is common knowledge that Mitt Romney has done business, and has out sourced jobs overseas to places such as China. But what is not so common knowledge, or even in many voters’ thoughts with the obstreperous battling and finger pointing during the recent campaign season, many minute details have been overlooked.
Many will say that the President could have been tougher on outsourcing by insisting that all jobs and services that were being paid for with stimulus money had to been completed by U.S. companies, which would have forced jobs to use their employees here instead of going abroad. (Morici, 2012) Other countries such as China have taken such steps as do just this, Beijing China has also signed a stimulus bill but where they differed was that Chinas government insisted that all funds be spent in China. (Morici, 2012) It’s regulations like this that one who supports the government and who are in support of internal job growth will smile and be proud of.
There are many companies that outsource jobs overseas for the low labor cost, fewer government taxes, and less regulations to deal with. (Ramo, 2012) Many of those companies that are outsourcing and doing it successfully are the clothing manufactures, who depend on skilled workers that know a specific suing skill and the manufacturing process or machinery, can not replicated cheaply. (Rigoglioso, 2012) After I did a random poll of thirty people fifty percent of the people believe that clothing manufacturing jobs will most likely not come back from overseas. Clothing manufactures are major outsourcers because these jobs are cheaper and more efficient to do by hand than by machine. (Rigoglioso, 2012)Some experts believe that clothing manufacturing is something that would be hard to reverse the outsourcing trend until lately. (Rigoglioso, 2012)
Many firms are noticing that fashion is an ever changing trend that moves faster than the production of their goods being outsourced. (Rigoglioso, 2012)”Firms might want to reevaluate the supposed economic utility of this practice,” Swinney says. “It may be that it’s better to have production facilities closer by so that it takes less time to get your merchandise from point A to point B.”(Rigoglioso, 2012) All is not lost for outsourcing clothing items yet. Companies need to look at their business models to know if outsourcing fits what they are trying to achieve for their customers, clothing manufacture can survive if they are a discount store than time to market will not be as important as the high dollar more expensive items that are made to keep the customer in the latest and greatest trends. People are willing to pay top dollar for what they feel is of value to them.
There is another area in the manufacturing business that the U.S. is losing valuable jobs to as well, and that is the small electronics manufacturing. (Malone and Scheyder, 2012) Small electronics that are put together by hand is another one of those skills sets like the suing for fashion that the U.S. most likely won’t get back from overseas. These employees are high skilled and will be paid less overseas. (Malone and Scheyder, 2012) An outsourcing strategy is a constantly changing and ongoing one that should be monitored and managed with attention to detail to ensure your firm is following the right path at the right time to reduce loses due to the ever changing business environment.
Times are rapidly changing and the all in one outsourcing stop China machine, is beginning to change the minds of business owner’s.
“Some companies are now thinking of moving operations to places like Pakistan (50% lower costs and over 200,000 IT graduates looking for work), Bangladesh or Vietnam. Changes are happening very quickly. But other corporations are already moving jobs back home – because cost savings have narrowed, and because outsourcing carries risks – in supply chain delays, language and culture challenges, distance management, loss of intellectual capital and so on.” (Dixon, 2012)
I did a random poll and one hundred percent of the people polled believe that, for firms that are outsourcing jobs to China believe that manufacturing prices over there are at an all time low. These sample poll results could not be any further from the truth, outsourcing to China has become more expensive and more of a hindrance than an advantage to the business owners and top management. (Dixon, 2012) Any business that is thinking about moving their firm or parts of their firm overseas must make a commitment to doing it and doing it with the most customer and stakeholder support as possible, if done wrong a firm could lose money and customers by being seen as anti American and job killers. (Dixon, 2012) As we have seen when the rumour came out about Jeep shipping jobs overseas, the company quickly came out to defend what they were doing, and set the record straight.
Do to the high unemployment, and economic discourse many people have ill feelings about outsourcing jobs to help other countries when our own country is having a hard time. I did a random survey and found that one hundred percent of the people that were surveyed did not believe that allot of companies are bringing manufacturing jobs back home to the U.S. because the price to manufacture and export are increasing. The truth is that the price to manufacture goods is up in China. (Malone and Scheyder, 2012) “After decades roaming the world in search of lower costs, U.S. manufacturers are finding that factories at home can compete with China, India, Mexico and other low-cost countries.”(Malone and Scheyder, 2012) Companies are now realizing that outsourcing is a long process that takes a whole entire department to get the outsourced finished project to the store for the customers. (Malone and Scheyder, 2012) Firms are seeing that logistics and the lead time for outsourcing are starting to out way the benefits. (Malone and Scheyder, 2012) Host country unpredictable inflation, rules, and fuel cost also lead the top reasons for not outsourcing. (Malone and Scheyder, 2012)
Though outsourcing does ship jobs overseas it is not the main reason for the current high unemployment rate. After polling the question to thirty random people seventy three percent of the people polled believe that the unemployment rate is high due to outsourcing jobs to overseas countries. There seems to be a bigger problem than just outsourcing jobs, I believe that the main reason that firms are cutting jobs, which is causing the unemployment rate to go up, employers have found that they can tighten their belts as far as cutting workers to cut operational cost, and still survive with the best qualified workers doing more for less. “With the rise of service work being outsourced to China and India has come something new for Americans: for the first time ever, educated U.S. workers are competing with educated but low-paid foreign workers.”(Picker, 2012)
There are some who say that outsourcing is something used as a fear mongering tool, used by politicians to scare the uninformed society to vote their way. (Picker, 2012) Those same people will provide facts that will show that for all the jobs that are lost to outsourcing there are just as much created on a year to year basis. (Picker, 2012) So we have got to figure out the real issues of high unemployment and address it. Our U.S businesses are the best at figuring out what is best for their survival, and they will make the necessary adjustment to remain profitable and relevant in its market space.
In conclusion I hope I have provided enough information about the rumors myths and the common misconceptions about jobs being outsourced to overseas countries. We have learned that no matter which presidential candidate that you chose neither did their best to keep jobs in the United States. We also learned that the unemployment rate is up, but it has very little to do with the year over year effect of outsourcing. In this paper we have seen that there are some jobs that most likely won’t come back to the U.S. in anytime soon; jobs like small electronics, and clothing manufacturing. We have also found out that firms that are outsourcing jobs to China are noticing higher manufacturing prices, and higher shipping charges to get their goods back to the United States. Lastly we found out that jobs are noticing the cons are out weighing the pros, and they are bringing their jobs back to the home front. We have got to realize that jobs may come and go, and if we are to be successful we must learn how to make ourselves relative in the situation that is provided to us.”We shouldn’t be worrying so much about losing our future to China and India – countries that relied on outside-led growth for their economic muscle tone- but rather about losing our future to our own inability to adjust.” (Ramo, 2012)
Work cited
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Ramo, J (December 3, 2012). Globalism Goes Backward. Fortune.
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