The Relationship among Outsourcing, Americans and the ways outsourcing will save small companies in the US

Tuesday, March 19, 2013

A constant talking point during any mention of a recent jobs report, political campaign or discussion on the economy in general is a highly debated dialogue on the shipping of jobs overseas. This is followed by the grim predictions of global research and advisory firm Forrester which indicated that 3.3 million jobs would be offshored by 2015. At this point, many Americans are simply demanding that heads roll, just so the outsourced jobs are brought back to the American soil.

employment crisis
Employment crisis due to outsourcing?
However, the claims that outsourcing reduces employment opportunities for Americans, particularly for fresh college graduates who need entry-level positions, are unfounded, if not absurd in some cases. Several industries in the United States still require human interaction such as the personal care, catering, retail and other professional roles. These jobs are secure from outsourcing, as you cannot very well have your hair done by someone a few thousand miles away from you.

The service sector encompasses about 70-80% of the US economy, which leaves little room for outsourcing. The US Bureau of Labor Statistics even announced that there were 3.7 million job openings at the end of January 2013 and the unemployment rate dropped to 7.7, its best ranking since the recession began, even while in the midst of a massive outsourcing surge into the developing world.

Furthermore, most of these government statistics only measure dominant and large companies or those with a minimum of 50 employees on the payroll. These surveys frequently overlook the fact that most of job growth comes from the small employers. Even if these small players have work that they can save money on by outsourcing, they are unlikely to turn in that direction as the expenses would eclipse the savings.

At the end of the day, the United States has an improved unemployment rate, an increase in the available jobs and an evident fact that outsourcing only affects a small part of the US economy. After all, one of the largest effects of outsourcing on US companies is their ability to survive in a massive recession and often debilitating taxes, enabling them to focus on distribution and other growth oriented operations that cannot be outsourced.

[Photo credit: Herkie on Flickr.]