Is Outsourcing on the Rise?
According to the article in linked, more small businesses are outsourcing their jobs to keep a little more cash in their own pockets. The problem is that less people are finding jobs because they are wanting something more permanent. Basically, the firm is increasing their profit, keeping the price the same, but paying less to workers. The workers are brought on to work for as long as the business needs them then let go at the drop of a hat. It doesn't stop there. Businesses are outsourcing to other countries. This also helps keep profits in their pockets because it is cheaper to pay workers in other countries. The problem with that is that fewer jobs exist for Americans when businesses make that decision.
According to the article 4.2% of compensations payments went to outside contractors in 2002 as opposed to 4.7% in 2003. There is a serious problem on our hands.
2 comments:
I can understand why businesses would want to outsource. It keeps their variable cost at a minimum, providing more profits for the greater company. With the outsourceing of jobs to other countries, it is merely businesses tapping into fresh labor markets. Before outsourceing the American labor force had a "monopoly" yet with outsourceing American businesses were able to find a cheaper alternative, so its only natural that American business is going to go for the cheapest labor force, thus trying to minimize variable costs
Outsourcing is a very difficult part of the business world. It takes jobs away form domestic citizens but companies do it because it's cheap labor. I can were both sides feel the way they feel. Companies want to find the cheapest labor possible, but sending jobs to another country doesnt help the local economy.
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