Outsourcing How Does It Affect you?

Essay by aangelstouchCollege, Undergraduate October 2007

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Outsourcing How Does It Affect you? What is outsourcing and how is it affecting our lives here in America? Outsourcing which has also been called contracting out is when a company contract's jobs out to be done by a company within or outside of the company. This includes hiring temp agencies to handle part of the work load and hiring other companies to do certain tasks or other work. The ever more common trend of outsourcing to offshore facilities is where the companies are outsourcing jobs to be handled in foreign countries. This leaves the Americans who worked those jobs here unemployed. Many who are laid off have to accept jobs that pay lower then the rate they previously made before the outsourcing occurred. "Even the official figures show a very rapid growth of Business, Professional and Technical service imports from selected Asian countries, in particular India, China and Singapore.

From 1997 to 2003, US imports of Professional and Technical Services grew at an annual rate of 12 percent, with an annual growth rate of 22 percent from China, 23 percent from Singapore and 61 percent from India(Spurring Growth Dynamics from Services Offshoring)." Many companies that were once based out of America have outsourced thousands of jobs. When considering expanding or saving the company from bankrupt these companies look at the costs of labor, manufacturing and overhead then compare the cost to revenue and look for a cheaper more cost effective way to produce and or sell the product. Some countries even offer tax benefits to certain types of companies to attract them. Everyone is always looking to make more money and to cut expenses. Some of the companies who have outsourced include Sprint, General Electric, Bank of America, American Express, IBM and Citigroup. 3"Bank of America for example...