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The Politics of Outsourcing

Outsourcing generally results in localized unemployment. Jobs are displaced from one company and moved to another company. The top two reasons for Outsourcing in 2001 were to reduce costs and to focus on core business.

The reduction in costs can be considerable, when the major element of the outsourced business is labor, and so long as the quality of service offered by the contracted company is good then these savings will be realized. This type of saving has been achieved by moving business processes from developed nations to developing nations where wages are much lower. This has led to accusations and protests by the displaced labor pool saying that "outsourcing is bad, giving jobs away, giving money away" all very powerful reasons particularly if it happens to you. However, developed nations have benefited from the world economy by selling their goods and services overseas and have gladly accepted the money. Surely, there can be no complaints that the world economy that has fed the developed nations so well might want to redistribute the wealth.


Next on the outsourcing list - Kris Maher, Wall St. Journal, 3/23/04, p. B1

Outsourcing: Who's Safe Anymore?- Laura D'Andrea Tyson, Business Week, 2/23/04, p26

Against the Grain - Kelly Spors, Wall St. Journal, 9/27/04 Get Acrobat Reader


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