Offshore Outsourcing

Over the last few decades, as communication and transportation processes have progressed, American corporations have been able to expand their international influence across different markets, resulting in a dramatic increase in the amount of competition. As a result, many small businesses engage in offshore outsourcing - the practice of delegating certain tasks to independent contractors. These contractors are often in developing parts of the world, and they attract corporations because they’re able to work at an appreciably lower price than workers in the United States. Whether the purpose is to take advantage of the low cost of labor in developing countries, tap into new market areas and resources, or to simply mitigate risk, businesses …show more content…
Outsource regulations would do little-to-none to help protect domestic workers’ and their jobs. It would, on the contrary, have devastating effects on both our economy and American businesses. By dramatically increasing corporate taxes on oversea profits, it would incentivize companies to either relocate their headquarters in another country or significantly increase prices on their goods and services. By suppressing the free enterprise system for businesses, it limits the ability for them to compete effectively against others in the global market. Outsourcing may partially contribute to some job loss, but the net effect is appreciably larger, which offsets those negative effects. According to “Outsourcing: What’s the true impact? Counting jobs is only part of the answer”, the author states:
Over the years, there have been hundreds of studies that purport to prove that global outsourcing has been a net job creator for the United States — that as a result of shifting work overseas, more jobs were created back home than were lost, even though the jobs and the workers may not be the same. Such findings, not coincidentally, are consistent with economic theory, which holds that trade and specialization are win-win propositions, enhancing everyone’s productivity, raising everyone’s incomes and boosting economic growth everywhere. …show more content…
For example, let’s say Italy specializes in producing automobiles and that the United States specializes in producing electronic goods. It would be inefficient for Italy to produce both automobiles and electronics when they can simply create a trade agreement with the United States. Similar to outsourcing, if one party can do a task at a much lower price, then it’s going to positively affect the second party. To put it into context, if an American company outsources their manufacturing division to China, where the workers can get the job done at lower wages, then when the product is sold in the U.S. market, it will be a lot cheaper for consumers to purchase. If government regulations are implemented, it would cause an increase in prices because the businesses would have to pay workers higher