The Problem with Outsourcing

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Date Submitted: 06/05/2008 03:56 PM

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The Problem with Outsourcing

As a capitalistic society, which thrives on the pursuit of wealth, many large corporations choose to take the outsourcing approach. Outsourcing is “the procuring of services or products, such as the parts used in manufacturing a motor vehicle, from an outside supplier or manufacturer in order to cut costs” (Dictionary). The controversy surrounding outsourcing affects our society in many ways. Outsourcing has become such a profitable business strategy that more U.S. companies are utilizing the cheaper labor resources available abroad in foreign countries. “It is an increasingly popular strategy because it helps firms focus on their core activities and avoid getting sidetracked onto secondary activities” (Krajewski et al. 102-6). In the corporation’s quest to achieve a higher profit margin and satisfy their stockholders, outsourcing is structurally destroying the knowledge, experience, and skills of our society. Outsourcing is not beneficial to the national interest of our country.

Over the past fifteen years, the U.S. economy has had such a massive trade deficit that outsourcing our financial resources to other countries instead of channeling it back into our nation’s economy has exacerbated the situation. Currently, the U.S. imports more goods and services than it exports. According to the U.S. Census Bureau and the U.S. Bureau of Economic Analysis:

…the total of June exports of $106.8 billion and imports of $165.6 billion resulted in a goods and services deficit of $58.8 billion, $3.4 billion more than the $55.4 billion in May, revised. June exports were virtually unchanged from May, and June imports were $3.4 billion more than May imports of $162.2 billion. (BEA)

As the results state, the U.S. has now become one of the biggest debtor nation in the global economy. As a nation that imports more goods than producing our own, we are globally dependent on other nations. The additional consequences of outsourcing and...