Outsourcing in the Us Labor Market

Try finding out that there is no longer work available at your current company in a time of economic turmoil. Christmas is only months away, but where will you get the money to buy your children presents? How long will it be before the money runs out and you are stuck in the worst situation possible? Supporting a family on unemployment and trying to provide them with everything they want is impossible.

Since the 1980’s, American companies have been outsourcing work to other businesses and countries. It was not until the stock market crash in 2008 that the affects of this were really felt. Thousands of workers were displaced from their jobs and the unemployment rate raised to an all time high. Families were left wondering where their next paycheck would come from and how long they would be able to last on the money that they had saved in bank accounts. Little did they know that the banks were not going to be able to shell out all of the money to every person that wanted it. They too had lost large sums of money when the economy turned for the worst.

Affects of the crash were felt by almost everyone in the United States. No mater where you sat on the income scale, some part of your life was affected. Now one might say, what does this have to do with outsourcing? Outsourcing was the single most cause that was attributed to job separations, loss of a job, in 2004. Between 55,000 and 73,000 separations were associated with 382 layoffs that took place in that year. Of those events, 63 percent were permanent closures and affected roughly 50,000 people (Brown & Siegel). As a side note, the figures were only compiled for companies greater than 50 employees, and companies that recorded layoffs affecting more than 50 employees at a time. Numerous other separations in smaller companies also happened contributing to a much larger amount of individuals out of work than is documented.

Outsourcing leads to only a few individuals benefiting and a number of...