psychology […] AFL-CIO’s perspective of off-shoring, particularly to the costs and benefits of off-shoring. Off-shoring or outsourcing has become a common practice among American employers. They set up operations in a foreign country, where they can pay much lower wages and have lower operating costs, and take away jobs and income from American workers. It is the position of the AFL-CIO that this is a poor practice that should stop — American companies have an obligation to American workers.
Our position is strongly opposed to this practice. The Executive Council writes, “Today, we stand united in opposition to outsourcing away our best service-sector jobs as well. Like Americans everywhere, we believe that American corporations have a moral obligation to create and to keep good jobs in America” (Editors, 2004). When outsourcing first began, economists ensured Americans that outsourcing would not replace high-tech jobs in the country. The Council continues, “We were assured that the new global division of labor was both natural and benign: we would keep the high-paying, high-skilled jobs, while the workers in developing countries would do the actual work of making things” (Editors, 2004). Now of course, we know that is not the case, and the investment in American technology and jobs has not occurred.
Outsourcing poses another threat to Americans and American jobs. Many people believe that it is only low-wage, low-tech jobs that are being outsourced. However, this is not the case. Many white-collar jobs, such as x-ray reading and even legal jobs are being outsourced, as well. In fact, thousands of legal jobs are being shipped overseas each year, and at least one document that was prepared in India has reached the Supreme Court (Krishnan, 2007). This growing trend of sending white-collar jobs overseas threatens the entire American workforce, not just low-tech jobs, and with record unemployment, outsourcing jobs to India, China, and other countries is a slap in the face to the American worker who cannot find a job.
The country’s growing number of unemployed has not seemed to stop the practice of outsourcing. Writer Krishnan contends it will stop during times of increased unemployment, but that has not been a trend in the current down economy. While some corporations have announced they are bringing outsourced jobs back home, (Sallie Mae, the student loan firm, just announced it is bringing 2,000 jobs back to America), others are sending more jobs than ever to foreign countries. Just a few days ago, Xerox announced plans to send thousands of jobs to an Indian outsourcing firm, ceasing operations of one of its divisions in North America (Jones, 2009). The economics are clear. It saves corporations money to send jobs overseas, because they pay far lower wages to foreign employees, and their operating costs are much cheaper. However, there is news that Indian outsourcing is becoming more expensive, which may cause some companies to bring jobs back home.
In the sinking economy, the dollar has been sinking too, and that means it buys less in places like India, which is one reason costs are rising. Real estate in India is expensive too, so it is costly to build new operations there. India has raised taxes too, in order to gain financially from outsourcing, so companies are moving to other countries, such as Mexico, to save even more money. Initially, businesses could save 50% or more by moving jobs off-shore, but today, that has been reduced to 10 to 20%, so some businesses are rethinking operations (King, 2008).
In conclusion, the AFL-CIO does not endorse outsourcing or off-shoring of any kind. It is detrimental to the country, the country’s workers, and the economy, and it sends much needed jobs overseas at substandard wages that increase poverty and add to the social problems of the host nations. Off-shoring is un-American, and the practice of off-shoring should be severely limited in this country.
Editors. (2004). Outsourcing America. Retrieved 9 April 2009 from the AFL-CIO Web site: http://www.aflcio.org/aboutus/thisistheaflcio/ecouncil/ec03112004i.cfm.
Jones, I. (2009). Xerox strikes outsourcing deal with HCL Technologies. Retrieved 9 April 2009 from the Reuters.com Web site: http://www.reuters.com/article/innovationNews/idUSTRE5342R120090405.
King, R. (2008). The new economics of outsourcing. Retrieved 9 April 2009 from the BusinessWeek.com Web site: http://www.businessweek.com/technology/content/apr2008/tc2008043_531737.htm.
Krishnan, J.K. (2007). Outsourcing and the globalizing legal profession. William and Mary Law Review, 48(6), 2189+.
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