But if the concept of off shoring or outsourcing is so good, why are many quarters giving out such a loud protest to the concept? In terms of employment opportunities, the jobs that were generated by the outsourcing trend could have been given to American workers (Greed, 2007). To put the situation into context, let us see another definition of outsourcing. Outsourcing is also defined as the delegation of a company’s subsidiary or non-essential business activities to another company of the formers non-core business (Greed, 2007).
The system of outsourcing and the data related to it are not complete or conclusive enough to give a good picture of the effects of the outsourcing trend (Olian, 2004). There is evidence that would support Samuelson’s argument that there is a real, and permanent, loss of jobs, especially in the lower ranks of the employment ladder (Olian, 2004). Going back to the latter definition of outsourcing, the losses are more than just conjecture. In Arizona alone, the state is estimated to lose over 270,000 jobs to outsourcing over the next ten years (Roger Dale, 2004).
According to Dale (2004), who is the managing principal at Natelson Company, approximately 14,000,000 million Americans are under threat of losing their jobs (Dale, 2004). In 2001, according to Dale (2004), industries that were heavily engaged in outsourcing activities were in the areas of software publication, payroll and accounting activities, call center ventures, and computer related services (Dale, 2004). This was because businesses were finding it more conducive to do their activities abroad as these countries offer lower wages compared to United States workers (Dale, 2004).
However, current information does not provide adequate data as how many employees and workers in the accounting, information technology, technical support and other jobs have been shipped out of the United States (Cook & Nyhan, 2004). But some industry sentinels have speculated that around 200,000 jobs annually could be lost to outsourcing in the next decade (Cook & Nyhan, 2004). Others would see this development as an ominous sign, and get American jobseekers concerned about the availability of jobs (Cook & Nyhan, 2004).
But according to Hank Queen, vice president for engineering and manufacturing at the Boeing Company, the recent trends mark the beginning of a new era of “working around the world” (Queen, 2004). Boeing Company should not surprise anyone for taking this tact on the global outsourcing trend (Cook & Nyhan, 2004). The airplane manufacturer routinely sends out, or “farms”, work on its planes to several countries, such as South Africa, China and Italy among others (Cook & Nyhan, 2004). But Boeing is a different breed of outsourcer (Cook & Nyhan, 2004).
Boeing, in conducting its operations abroad, is not only after inexpensive labor for its manufacturing activities (Cook & Nyhan, 2004). The company targets countries where there is a potential market for the planes it makes, spreading the risks on its new projects (Cook & Nyhan, 2004). The company does this to keep itself competitive in the market (Cook & Nyhan, 2004). In a study conducted by consultancy firm Global Insight, that while outsourcing will produce some short-term unemployment for Americans, it would outweigh these by gaining more long-term benefits (CNN, 2004).
This would seem to agree with the conclusions of Professor Bhagwati (Bhagwati, 2004). The savings on the cost of doing business and the use of offshore options will result in lower inflation numbers and increase productivity, according to the study (CNN, 2004). These benefits should flow down throughout the economy, with the addition of 90,000 new jobs or an accumulated 317,000 new employment opportunities to 2008 (CNN, 2004).
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