Effects of Outsourcing on the US Economy

Topics: Economics, Unemployment, Outsourcing Pages: 3 (439 words) Published: July 11, 2015

Recently, more and more companies are choosing to outsource to a foreign country in order to save money. Outsourcing is purchasing the labor of another company to cut cost. This is taking jobs from Americans, and giving them to workers who they can pay cheaper, leaving almost 3 million Americans without jobs.

There is a lot of controversy on the matter between those for and against outsourcing. Many people are against it because it keeps increasing the unemployment rate. Outsources is usually done by large corporations, allowing them to destroy small businesses that are just developing. Though corporations believe that outsourcing can benefit American economy in the long run. They are argue that this will allow for lower prices for Americans, and aid the economies of developing or non-developed countries.

China, a developing country, has been called the best choice for outsourcing. It's efficient and has the most stable and high-growth market in the world. Prince industries is one corporation who open in China, over a decade ago. Sodexa is another example of a company outsourcing, except Sodexa is a French food service that has found its way into the US and many other countries. They are one of the largest companies in the food industry, coming to the US in 1983.

A barrier of trade that would prevent an American company from outsourcing to another country would be a high tariff. A tariff is a tax on imported goods, increasing the price to import them. With an added tariff, it may turn off a corporation from outsourcing so they don't have to pay to import back to America.

There are advantages and disadvantages from outsourcing to the American economy. I believe in the end, it hinders more than it promotes a healthy American economy. It takes a lot of jobs away from our citizens, and raises unemployment. Keeping companies where they're at now in our homeland helps our citizens keep a job, they would still be making money and spending it, encouraging...
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