The Outsourcing Trickle Essay - 1237 Words

As esteemed journalist Tom Piatak wisely puts it, â€Å"The trickle of outsourcing threatens to become a flood.† His words speak the truth as outsourcing has left United States’ workers jobless, and it continues to increase the unemployment rate every year. During February of 2009, American workers lost a record 651,000 jobs alone, increasing the unemployment rate to 8.1 percent, the highest it has been in 25 years (Katel). Multinational corporations, hoping to cut down costs and stay profitable in the market, outsource by exporting American jobs to third-world countries such as China and India. It may seem noble that outsourcing provides third-world countries with job opportunities, but the United States’ markets and industries are greatly†¦show more content†¦Companies close down U.S. buildings and factories to reduce costs, capital gets exported abroad, and this money can no longer go towards economic expansion. These direct hits on U.S. local, state, and federal governments have detrimental effects on the economy due to fewer unemployment benefits and reduced economic expansion. On the other hand, some critics state that globalization of products â€Å"are creating new markets [in India and China] for goods and services,† increasing government wealth (Cooper). Unfortunately, proponents of this argument fail to recognize that globalization benefits are not trickling down to all sectors of the U.S. economy. Recent studies show that lost manufacturing jobs, the sector most affected by outsourced jobs, are replaced by lower-paying jobs in the service sector (Cooper). With these lower-paying industries, the downsized gross domestic income of America impacts the economy and shrinks government taxation. The average American is then greatly impacted because lower tax money means the government cannot provide essential benefits to people. When jobs are outsourced, the U.S. government as well as the U.S. economy greatly suffers. Outsourcing of both skilled and unskilled jobs in the U.S. has a sufficiently weakens economy due to a decrease in the consumption of goods. Once workers are unemployed, they no longer have enough money to purchase products in the market. Heidi Shierholz, a labor economist at the EconomicShow MoreRelatedUnited States Should Not Be The Best Essay1287 Words   |  6 Pagesone percent in the United States. They have large amounts of money, why can’t they give any away? They use their money to boost their profits instead by underpaying employees to other countries, avoiding taxes through loopholes and tax havens and outsourcing jobs to other countries. The money they send away could be used for government funded programs like food stamps and unemployment or they could donate to food banks. There is a plethora of ways big business is damaging our own economy and it is starvingRead MoreEconomic Exchange within a Globalized World1195 Words   |  5 PagesHowever this has not benefi ted the poor. In contrast those in poverty have either remained in poverty levels or have continued to sink further in (Globalization and the Trickle Down n.d.). This can be explained by the notion of â€Å"trickle down† theory (Howard-Hassman 2005). This theory suggest that wealth should hypothetically flow or â€Å"trickle† down from wealthy individuals and countries to the poor individuals and countries (Howard-Hassman 2005). However this theory does not account for corruption and theRead MoreGlobalization : As Transnational Corporations ( Mncs )1327 Words   |  6 Pageswithout set regulatory policies to protect them. For instance, workers are subjected to unpaid overtime, toxic chemicals, and dangerous equipment. Nevertheless, some believe if the corporations acquire revenue, the money trickles down to the less economically developed. Outsourcing labor creates a relationship of mutual exploitation. The corporations secure profit off of the cheap land and labor, while the workers benefit from the money flowing into the region. Despite the low wages, long hours, andRead MoreIndia s Pharmaceutical Industry : International Trade Limits On Account Of Their Abuse Of Intellectual Property Rights858 Words   |  4 Pagespharmaceuticals available for purchase in the United States to practically 900 plants in India, giving Indian organizations legitimacy that potential opponents are in other areas, for example, China. 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