Saturday, July 16

Outsourcing and the global economy

I'm going to say this right off. Undoubtedly what I'm writing here will really irritate people. I probably will come across as arrogant or simple as well. You must understand that this is not my intention. I merely want to write what I think about outsourcing. Personally, I don't know anyone who lost their job to outsourcing, so I'm sorry too if I tread all over your feet. I would also like to point out that the only training I have in economics is a single high school course, so glaring errors and fallacies are not unexpected.

So, outsourcing. I guess it's a big issue. It was really huge a few months ago, but I continue to hear about it every so often. As far as I know, Lou Dobbs continues to devote a portion of his show on CNN to reporting on it as well. Well, here are my thoughts on it.

Good. Let's send those jobs all over the world. Hopefully this new market will allow parents in China and India to send their children to college thus raising the entire country's standard of living to that of the United States and then outsource their jobs to Africa and South and Central America and subsequently raise their standards of living. Spread the wealth around, I say.

Of course, there would be a significant portion of the labor force without a job then. Well, I have a plan in that case as well. First, the government simplifies its tax code, so major businesses and corporations can't hide behind tax havens and especially target those which outsource their workers. With these increased taxes, provide more higher education grants, so these newly unemployed people can return to school and find a new job. I hear that it's mostly accounting and tech support and jobs like that are the ones getting outsourced, so it shouldn't be hard to find a more meaningful career in college.

To better understand the context of this post as a whole you need to understand my own thoughts on globalization. I'm all in favor of it economically. One thing I did learn in that economics class junior year was that the American economy has largely been succesful because of the open market. Then let's create a truly free market. Knock down all tariffs and sign all the free trade agreements we can. Then competition will greatest and quality will improve and costs lowered as organizations contend in this new economy.

1 comment:

Peter said...

I'm for free trade myself, and I like that outsourcing can improve the economies of less wealthy countries than the United States. I don't agree with your take on raising taxes on these companies, though. If the newly unemployed want to invest in more education, let them take out the loans to do so, thus putting pressure on them to succeed rather than just giving them grants that could go wasted when the person decides its no longer fun to get drunk at college parties when you're 31. To be a truly free market, however, is somewhat unrealistic because our government can regulate how companies in our country do business, but not how a company does business in another country. So a company could gain competitive advantages by doing business in one country, but still reaching a consumer in another. It's a great ideal, but it's hard to pull off since we're not a global government to regulate this global economy.