Why Outsource?

You can't listen to a political debate anymore without hearing about outsourcing, and rightly so. Job outsourcing is a major topic in today's politics because it affects us both individually and as a a nation. It seems that there are two sides pitted against one another -- the companies who outsource their work and fight for policies to make it easier to do so, and workers who fight against outsourcing.

So why do we outsource? We are in a global economy where we cannot isolate ourselves from the rest of the world. To stay competitive in the global markets, and even at home, outsourcing is a part of cost-effective product development and manufacturing. The issue and cause for debate is that outsourcing has become less of a method of increasing productivity and more of a method for maximizing profits at the expense of workers here at home. Outsourcing isn't practiced for the good of the workers; it's practiced for the good of the companies in order to maximize their profit margins, and it transfers economic wealth to other nations. Some motives may be articulated so that they seem to be beneficial to consumers, but by and large they are corporate-driven.

Some argue that outsourcing allows for inexpensive goods in higher volume, making our lives easier because we can save money at the cash register. I argue against this assertion, seeing the economic system as a carefully balanced ecosystem. Resources flow back and forth between consumer and producer. Consumers give money to producers in trade for goods, then producers pay that money back to consumers for their labor in producing more goods. When labor is outsourced, the money that would normally be fed back to the consumer instead leaves the system, restricting the purchasing power of the consumer. So, yes, products may be cheaper, but the consumer also has less money to spend.

Because the direction of our economy is driven by the motives of producers rather than by the motives of consumers, there has been a devaluing of skilled labor in many sectors. This is most notable when looking at immigration labor. We outsource much of our labor, we make it difficult for highly educated persons to immigrate to our country, and then we exploit the cheap labor of illegal and/or unskilled immigrants. Meanwhile, it is becoming more and more difficult for educated college students to find jobs. Perhaps this trend in our economy is part of the fuel for the Occupy Wall Street movement.

Instead of exploiting the global market for driving higher profit margins at the cost of skilled laborers, we should use the global market to increase productivity globally and also locally while reaping the rewards without having to make detrimental sacrifices. Concepts such as global teaming and taking advantage of the 24-hour clock, or sharing resources across multiple locations could yield enormous gains for companies while also maintaining a solid workforce both at home and abroad. Such a shift isn't impossible, and for some competitive and on-the-edge companies may already be occurring. It will, however, require changes in our relationships with other nations and in our rather stingy intellectual property system.