IT outsourcing is indeed a controversial topic and one that is hard to take sides. In the presentation yesterday some people mentioned that they themselves don’t know where to draw the line of what is right or wrong. Before going into this project I had a completely one sided opinion that IT outsourcing was hurting Americans rather than helping. Research on how globalization of the job market and decreased global disparities really put things into perspective, but I still feel the same way as before except more educated. One of the interesting comments made by the class really triggered some thoughts and compelled me to do more research. It was the idea that even though more jobs are being created overseas, the pay there is low that it is really not benefiting the country in such a significant way. I just read an article that explains how some U.S. companies are exploiting cheap labor within this country and are using inappropriate methods to do so. This ‘recruiting’ company essentially importing foreign electricians under the banner of ‘cultural exchange’ and leased them to companies around the United States for $15 an hour while paying the actual employees $10. An example of this overseas is the great company of Disney. For each Pocahontas pajamas that is valued at $11.97 at Walmart, a Haitan worker who made it was paid 7 cents an hour. As much as the case for globalization stands, there are still a few problems with it such as this that I still can’t seem to side with proponents of outsourcing. Of the pros mentioned during the presentation, do you believe they outweigh the cons? Is there any real solution to this?
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Overall, I do not believe the pros of IT outsourcing outweigh the cons simply because Americans lose jobs and it eventually hurts our economy. However, we have to remember that these are strictly business decisions. The executives of these companies who take advantage of IT outsourcing would not want to outsource in an ideal world. But, in order for these companies to stay profitable and competitive in their respective markets, they have to cut costs and IT outsourcing is an easy way to do it.
ReplyDeleteWhile I agree that 7 cents an hour sounds abysmal, we should keep in mind that these are economic transactions. No one forced the "exploited" Haitian to take a job making costumes for Disney. That means the option of working for Disney was the best choice for the worker, probably because he had no more profitable way of supporting himself. Sure he only gets paid 7 cents/hour, but that means all his other options paid even less. Disney isn't stealing money from its overseas workers, it's paying them a wage that is obviously competitive with other similar opportunities. Otherwise they wouldn't be doing the work.
ReplyDeleteThese wages that seem incredibly low to us are enough to live on in the countries to which they are outsourcing. This may help their economy and the businesses that are doing the outsourcing, but our economy is suffering so much that I can't really support the idea of it. We are helping others at the cost of ourselves, but since our economy is tied into so many others, this may not be beneficial overall.
ReplyDeleteI agree that IT outsourcing takes away jobs from Americans in a very low economic point in our history. However, I was taught in Econ that outsourcing is one of the smartest business ideas that a company can do to cut cost, and it would be simply bad business to not outsource, or cut cost when applicable. But to me, the true driving force behind outsourcing is competition. The fact that a few companies do it mean that all companies must do it so that they can be competitive and survive in our market economy. The issue here is not if Disney or IBM should outsource, but should American companies be allowed to outsource because if it is legal then one company will do it and the snowball effect will involve the other companies. However, what about international companies? The point I am trying to make is that unless all companies in the world are not allowed to outsource, then it would be impossible to keep it from happening, and ultimately not all countries would agree to ban outsourcing because in reality that would just be bad business sense.
ReplyDeleteAshley makes a good point. With regards to the other opportunities these workers would otherwise have, the wages they are being paid by the American companies seems reasonable. It could seem like we are exploiting them considering the comparative prosperity of the American economy. However, our wages are actually fueling their economy in a way that the country could not do for itself. If helping these economies were the reason for outsourcing to other countries, then I think that would make the argument for it stronger. But, let's be real! We all know that the very reason these companies are sending jobs overseas is so they can put that cash in their pockets. I think it's detrimental to our economy, because these countries do have so many people that are willing to work for 7 cents an hour!! How are American citizens supposed to compete with that? Sure there are some great (but unintended I think) benefits of outsourcing. But, overall I think it is a way for the rich to get richer in America, and it is ultimately making our economy suffer.
ReplyDeleteI believe that while the aforementioned con of IT outsourcing, namely taking jobs aeay from an already expanding jobless market in the united states, has good merit, there is a good contraposition that i believe takes the cake. The expanding IT outsourcing is in fact swelling the worlds job market - creating nearly double the jobs that it takes away. Granted we are a selfish nation and we of course must look after our own first, this globablized economy will right itself by the laws of economics alone. Therefore, we will eventually "get ours" even if others benefit before.
ReplyDeleteThough I can certainly understand the cost-saving pros of IT outsourcing, I have personally seen the ill effects of it. This past summer, I worked for a large bank that had recently outsourced all of its IT services to India. On one Friday, the share drive for the whole bank went offline and needed to be rebooted in India. Overseas, it was in the middle of the night and the bank was informed that nothing would be done until Monday. This brought all activity at the bank to a halt because no one could access any information. Based on this experience, I do not approve of complete outsourcing.
ReplyDeleteI sympathize with the issues raised on outsourcing but at the same time, we are just as guilty in outsourcing elsewhere. Growing up, I’m the child of an expat family. This entails an American working overseas anywhere from six months to permanently. In most cases it is only three years, but for many it becomes a permanent alternative to working in the United States.
ReplyDeleteMy father currently works in Sweden and will be there for the duration of his project. From personal experience, the way Dutch and Swedish laws work- the foreign employee must be able to perform a job no Dutchman or Swedish citizen can perform. Of course there are people capable of his position there, but corporations still find a way around this.
I don’t think we can ever balance pros and cons but we need to realize we benefit from these practices. There are hundreds of thousands of Americans working overseas who will bring those skills back one day- something that aids our economy through their skills but also their personal experiences.
So, at the end of the day, we may lose low-paying jobs but we receive high paying jobs overseas because our employees work for lower wages in certain regions of the world.
I agree with Olivia - the big wigs at IBM and Disney are outsourcing because it puts more cash in their pocket. As much as I'd like to believe they're in it to boost the economy of third-world countries, we all know that's not the truth. The group's presentation did a great job of showing the pros and cons - but I think it's important to remember the motivations behind outsourcing.
ReplyDeleteI think that the pros do not outweigh the cons. I understand that there are benefits for companies to outsource their labor, but it does hurt most Americans. Ultimately, I would have to say that we should try to keep jobs in America for the sake of our own economy.
ReplyDeleteI think particularly in this intimidating economic climate, it is essential to create domestic jobs and start lowering the unemployment rates. Obviously, outsourcing is at odds with this. Businesses (particularly in this economic climate) seek to spend as fiscally as possible, ergo hiring out third-parties internationally as a cheaper alternative. This is why it is important for an infrastructure that gives businesses incentives to look at domestic employment. But, as long as there is overseas competition, this issue will continue to be a thorn in the side of America.
ReplyDeleteWithout regard to the ethical dilemmas that may exist, when it comes to outsourcing jobs I really tend to take the perspective that capitalism requires that companies do what they must to maximize their profits (and actually this is their duty to the shareholders), so if that requires that they employ people in other countries I suppose it is reasonable. It is scary to think, however, that these jobs that are being outsourced might never be replaced by the same amount of new jobs here in the United States. With the unemployment rate as high as it is right now, this is an especially sensitive time to be discussing/pondering sending jobs elsewhere.
ReplyDeletePutting the pros and cons aside, I think outsourcing can be looked at in two different ways. Many may complain that it is taking jobs away from our country, but it is also helping a lot of companies profit because they are getting away paying these individuals in another country a very low cost. Secondly, if our economy is already struggling how much worse would these companies be if they had to hire only people in our country which would be over $5 dollars an hour - most businesses would not be able to survive. Because it helps companies I don't see why its bad. It is shocking to see the low wages these individuals are making, but like someone said above its their choice to do it so its obviously helpful to them.
ReplyDeleteI think the main motivation behind all of this is competition among all the companies. It may seem wrong but it is valid in their eyes. Though it may slightly be helping the economy, I don’t think it’s making a significant difference. I also agree that these low wages are sometimes adequate for certain countries. I agree with m. mcfall-smith in saying that this is helping their economies and businesses, but it is making ours suffer.
ReplyDeleteThrough our presentation of IT outsourcing, our goal was to present the pros and cons to facilitate debate in class. This practice is still relatively young, and there is a lot of research being done to see if this is positive for society. The National Bureau of Economic Research has a few papers dealing with IT Outsourcing. As more research is conducted dealing with IT outsourcing, I think we will be able to form a more solid conclusion whether it should be allowed to continue.
ReplyDeleteOutsourcing seems to be a particularly interesting issue during this time of economic crisis and rising unemployment. While I agree that domestic jobs are of great importance, it is also important to realize that the security of such domestic jobs also depends on the profits of the given company. If a company can manufacture a product overseas and sell the product for cheaper domestically, they will increase revenue and maintain the ability to employ domestic workers in their corporate offices. The prevalent issue also seems to be who could potentially regulate or control IT outsourcing? The nature of our society is one of competition and capitalism- thus these practices seem inevitable to furthering profits.
ReplyDeleteYou all have made interesting points, however I definitely think the cons outweigh the pros in this argument. In my INLS class, someone did a presentation on IT Outsourcing as well. I learned about how it causes fraud. Apparently, India has the biggest outsourcing with 23.6 billion dollars and is continuing to grow! Most of the time, the company doing the outsourcing to the third party is not even considered liable for damaging losses. I think that is ridiculous, unfair and definitely unethical. It makes it start to question things. I had no idea how little employees were paid, 7 cents an hour is unreal. Although it is their choice to do this job, the company on the other hand should be more liable for its workers. For instance, I learned that employees usually don't go through background checks which is pretty scary to think about. Also, since India is rapidly growing, they hire a lot, while on the other hand, this concept is growing therefore hiring is rapid as well.
ReplyDeleteI think that IT Outsourcing is not a significant player in taking away jobs and hurting our economy. I do think that if IT is outsourced to other countries, that those workers should be paid fairly. However, I took an International studies lecture series this semester, and in fact, if jobs are sent overseas, they are simply helping other countries' economies, which in turn can help ours. They have more money flowing through their economies to trade and purchase US products; which in turn stimulates our economy. Think about how our down-spiraling economy has effected the economy of other countries.
ReplyDeleteWe all know that there are pros and cons of ouotsourcing and this presentation did a great job of portraying both sides. In my opinion there is no right or wrong answer here. After taking a step back, the fact that it decreases job oportunities within our own country but is seen as opportunity in third world countries is tough to grasp. From a companies perspective it is a way to increase profit but is not viewed as a humane choice for workers. The working conditions and pay are sub par. I see both sides of this argument and can not take one side or the other.
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