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Outsourcing: Exporting American Jobs
July 5, 2005
By Amanda Daflos
Business Programs Columnist
Over the last decade, and especially as we've moved into the 21st century, the word outsourcing has become a part of nearly every American's vocabulary.
As countless Americans have lost their jobs to outsourcing in nearly all pockets of the United States, the trend has continued to concern economists and citizens alike, but when it comes to the nuts and bolts of outsourcing, what are the numbers? Which industries have been impacted most? What are the pros and cons? Most importantly, what is the expected trend of the future?
The Outsourcing Shift
The American economy has seen an incredible shift over the past few decades. Eager to reduce costs, many companies have moved their factories abroad in order to minimize overhead and labor costs. They have found that relocating to places like India, Ireland and the Philippines has allowed them to take advantage of low-wage, highly educated workers. This enables them to simultaneously improve their profits.
Information Technology, Hit Hard
While so many sectors of the American economy have been affected by the trend, there are some that have been hit particularly hard including the information technology and textile industries. Estimates on the number of jobs lost to outsourcing vary greatly.
One February 2004 study by the Bureau of Labor Statistics found that more than 2.8 million factory jobs have been lost since 2000. They estimated that outsourcing is responsible for 10% of those losses.
Below are BLS' estimates of jobs lost in specific industries.
- Computers and Electronics: 455,000
- Textiles and Apparel: 395,000
- Machinery: 301,000
- Transportation Equipment: 297,000
- Fabricated Materials: 288,000
- Primary Metals: 154,000
- Electrical Equipment and Appliances: 135,000
- Plastics: 131,000
- Printing: 132,000
- Furniture: 107,000
Pros and Cons to Job Outsourcing
Like anything, there are pros and cons to outsourcing. In her article, Exporting Jobs, Mary H. Cooper suggests that proponents of exporting jobs claim that that the U.S. economy is simply evolving and like all economic shifts, the market will eventually bring itself back to normal. Further, supporters of outsourcing suggest that exporting jobs allows companies to offer Americans full-time customer service and a better overall product for their dollar.
Critics say that exporting American jobs reflects a lack of corporate ethics and the capitalistic drive to increase profits at any cost. They also claim that the continued loss of jobs in industries where education is critical, like information technology jobs, will send a message to the American public that industry no longer values top-notch college education.
The Future of Outsourcing
The future of outsourcing is unknown. Some studies predict that over the next fifteen years, up to 14 million service jobs will be lost such as answering customer calls, bill processing, and other administrative, exportable tasks. Many economists continue to argue that regardless, the economy will bounce back; they argue that, just as we saw a boom in information technology jobs with the rise of technology, a new and better invention will come along and soothe the wounds of the American economy.
Sources
About the Author
Amanda Daflos is the Founder and President of Aleigh Productions, a public relations and event consulting firm based in Colorado which specializes in work with non-profit organizations and initiatives as well as small businesses and corporations. Academically trained at Hamilton College in Clinton, New York and currently completing a master’s degree in public administration at the University of Colorado, Amanda works to promote individuals and corporations and brings their special events to life.
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