Wednesday, September 08, 2004

Outsourcing's Impact

Fool.com reports on the impact of outsourcing in America and it's effect on jobs.

"What we need is a way of determining whether the gain is worth the pain. Suppose the net benefit to America is the degree to which the average employee's purchasing power increases. The benefit really depends on four factors: the proportion of consumer expenses spent on potentially outsourced goods, the decrease in prices due to outsourcing, the proportion of American jobs that can be outsourced economically, and the wages of jobs that can be outsourced relative to the jobs that cannot"

"In the long term, American workers will be competing with labor elsewhere, pressuring American wages. Though prices should fall, it's unclear whether these benefits will compensate Americans for lower wages. On the other hand, India and China will benefit from both higher wages and falling prices. Consequently, outsourcing will likely narrow America's standard of living lead over other countries."

0 Comments:

Post a Comment

Subscribe to Post Comments [Atom]

<< Home