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The outsourcing of low-paying jobs, like the jobs used to manufacture the products in this report, is actually a positive thing for the economy, if not too many jobs are outsourced. We are a very rich country because we have moved away from manufacturing and into more profitable industries like pharmaceuticals, entertainment, R&D regarding technology, defense and education. All countries that have produced wealth usually follow a particular path: they go from agrarian to manufacturing to service to information. For example, India is making the move from manufacturer to service right now, and their manufacturing is being supplemented with Chinese labour. Eventually, China will likely move from manufacturing to service, and will be replaced with a poorer country and the cycle will continue.
In the current era of globalization, a VERY important thing that will keep us in an economic lead is the outsourcing of low paying jobs. The economy can then climb up the ladder and keep the rest of the world beneath us, by giving them our unskilled work. If not too much labour is outsourced, workers who lose their jobs will find other jobs in the more profitable industries we are involved in, like pharmaceuticals, entertainment and defense. In the short term, outsourcing is taking jobs from our economy, but in the long term, if not too much labour is outsourced, we will adapt to the new economic situation and provide labour for the economy in areas where their labour is needed. We will meet this demand through systems out country has in place, like the educational system. For example, an individual may rise through the educational system to become a teacher to meet the demand in the more profitable industry of education.
As an economy and as individuals we can only do so much with our time. For example, I can outsource my lawn care so I can do something more productive with my time, like type up a legal document. I don't hate the guy mowing my lawn for taking my money, because I can do more productive things and earn more money while he is mowing my lawn. In a way, stopping outsourcing is like mowing your lawn instead of typing up a legal document. It is refusing to move up the economic ladder to make more money. If a service economy refuses to outsource their work so they can move to an information economy, they are refusing to move up the economic ladder. Even for skilled labour, if someone is as skilled as I am and I hire them to do my work for less money, I make a profit.
This is also true for out entire economy, as businesses hire foreign labour (like software developers in India) to do their work, the business makes a profit and the economy moves up a step in a way, because the business is not doing the dirty work. They instead move up a step to manage those who actually do the work. In a situation where it used to take X amount of capital to finance jobs and when outsourcing takes 50% off the cost of X, the country gets all of the work done with only 50% of X and still has 50% of X left, which means a more productive economy, since businesses can invest the remaining amount back into the business or pay it to their workers.If a business pays their workers more and spends more money on business investments, this increases the productivity of a country, and more money is flowing throughout the economy from businesses.
As Economist Thomas Sowell from the University of Chicago puts it, “Anything that increases economic efficiency -- whether by outsourcing or a hundred other things -- is likely to cost somebody's job. The automobile cost the jobs of people who took care of horses or made saddles, carriages, and horseshoes". Sending jobs to other countries stimulates trade and actually produces a stronger economy, since in the long-run, higher valued jobs are left for workers to snap up when they become unemployed, although in the short-term there may be unemployment due to workers facing a tougher job market. A poll by the Wall Street Journal sums it up best - 84% of economists agree that outsourcing is a positive thing for the economy.
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