U.S. Economy Issue Outsourcing the Term Paper

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For example it reduces costs for IT and other services by as much as 60%, while keeping United States companies competitive in global markets, benefiting both workers and shareholders (Manila Bulletin, 2004). In addition, it strengthens demand abroad for the export of United States supplied computers, software, legal, financial, and marketing services & telecommunications hardware (Manila Bulletin, 2004).

It returns profits to the U.S. from United States owned associate overseas, as well allow United States companies to redistribute workers in more productive jobs in America. According to McKinsey every dollar spent on foreign outsourcing makes $1.12 to $1.14 of added economic activity in the economy of United States.

Debate:

The usual outsourcing debate is on the lack of hard numbers since none really has any idea as to how many jobs have been outsourced abroad. The best estimates from the Information technology industry are maybe 300,000 to 400,000 jobs earlier performed in America. This is now currently done overseas through contractors. According to the Forrester Research report of 2002 prediction 3.3 million jobs have been outsourced from 2000 through 2015, or about 220,000 a year (Daniel, 2004).

If taken these numbers even if accurate, then these are counted as just drops in the huge bucket of an $11 trillion economy that employs approximately 137 million people and produce and demolish millions of jobs every month. However, in years when there has been healthy employment growth, still over 350,000 people were filed for unemployment insurance per week (Daniel, 2004). According to the Labor Department figures, American economy has made an average of 32.8 million new jobs every year while eradicating 31.0 million, for a net annual increase of 1.8 million (Daniel, 2004).

Regardless of the instability of the past few years in this industry, the United States services sector remained a key strength in the economy of the United States.

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Computer, communications services and domestic software has accounted for around $621 billion in the year 2003, an increase from $510 billion in 1999 (Daniel, 2004).

A further actuality lost in the debate of outsourcing is the amount of outsourcing sent to the United States by the rest of the world. United States companies exported $14.8 billion worth of data-processing, research, computer, construction, architectural, development, engineering, and other IT services in the year 2002. While, in the same year Americans imported those same kinds of services worth $3.9 billion (Braga, 2005).

The issue of outsourcing white-collar service jobs to developing countries particularly India was another major concern of debate in the recent presidential election. According to the Forrester Research, a Cambridge, Mass.-based technology consulting firm, more than 800,000 white-collar jobs have been shipped overseas this year while more than 3.3 million would be shipped by 2015 (Daniel, 2004).

Even though a lot of American businesspeople have reason to worry about this practice, however, proponents of free trade maintain that the shift will profit the domestic economy (Daniel, 2004).

Conclusion

Outsourcing - a centuries-old phenomenon has always accounted for a very minute fraction of the total number of jobs produced and destroyed by America's phenomenal jobs-producing economy. This has for decades been and still remains the envy of the industrial world (Braga, 2005). Undeniably, America's extremely flexible labor market, that normally merge 2 million jobs every month, generated an increase of approximately twenty million jobs during each of the past three decades. During that era, total employment has boosted by more than sixty million jobs, or by eighty five percent (Braga, 2005). Thus, like trade in general, outsourcing, is reforming for the better. According to research released by recruitment specialists.....

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