Americans May Lose Jobs to Outsourcing

It's a familiar scenario: A product you purchased recently has developed a problem, so you call the company's toll-free number and are connected to a "customer service associate" in India or the Philippines. You describe your problem but have a hard time understanding what the company representative is saying. You try several more times to communicate why you are calling but cannot get information that you can comprehend. You ask to be transferred to someone in the U.S. and are then put on hold for what seems like an eternity. You hang up in frustration and vow never again to purchase anything from this company. (Weinstein, 2007)

Outsourcing needs to be stopped and America needs tighter restriction on corporations outsourcing jobs. Outsourcing jobs to foreign countries will lower the value of the work and cause American workers to lose jobs. Outsourcing is hurting American workers and the American economy, while foreign economies become bigger and stronger.

It seems as though every week in the news large corporations are outsourcing numerous jobs to India, China or the Philippines. Manufacturing jobs or low wage positions are not the only jobs at risk anymore; one out of three white-collar jobs is at risk. Outsourcing is attacking many jobs that were once considered safe. If a job can be done over the phone and with an internet connection, chances are it will be outsourced.

Outsourcing is a way for corporations to save money on labor and increase the bottom line. Cutting labor costs by outsourcing may sound like a winning idea to corporate executives, who only care about profits and the bottom line, but Americans are losing jobs. Executives salaries keep increasing while the employees who helped build the company are being sent to the unemployment line.

County Commissioner Patricia Evanko noted that the number of jobs outsourced in the country doubled to 406,000 between 2003 and 2004. She added that Pennsylvania lost 20 percent of its jobs to outsourcing and that 71 percent of Americans worry that they will lose their jobs the same way. (Scifo, 2007)

There are several types of positions that are vulnerable to outsourcing. In most cases, purely technical IT positions, technical support and call center jobs are the most vulnerable to outsourcing. Manufacturing positions are also becoming vulnerable as more are being outsourced to foreign countries. Even here in America immigrant workers are replacing several positions because these workers can be paid less and do not demand the same benefits as an American worker, a few examples are housepainters, siders and roofers. The immigrant workers are often not American citizens and do not pay taxes.

In addition to high tech, manufacturing, factory, and call center jobs, how long before marketing, human resources, accounting, pharmaceutical and even healthcare jobs are sent overseas? At what point does outsourcing stop? American corporations need to realize that outsourcing is hurting America.

Many people believe that there is no simple way to control outsourcing or prevent corporations from spending as little as possible on labor. There are a few reasons people believe outsourcing jobs to foreign countries is positive. Outsourcing can save a corporation a substantial amount of money on labor. Occasionally, the outsourced country may have more experience or knowledge with a particular product. A corporation may be able to find high tech talent that can not be found in the United States. Outsourcing may resolve staffing, capacity and time zone issues. In certain situations, outsourcing may be the only solution.

A large number of Americans consider outsourcing a threat to the American labor market. Outsourcing creates wage gaps between foreign countries and the United States. Outsourcing exploits lower paid foreign workers, making it difficult for Americans to compete with low wages. Americans are forced to continue to use corporations that outsource, even though people think outsourcing is wrong. Outsourcing causes insecurity in the American worker.

Most of the jobs being outsourced are computer and other high tech jobs. College students in America are realizing that these jobs are not secure, and the students are majoring in other areas, and the outsourcing countries continue to have large numbers of high tech graduates. Eventually, America will be relying solely on these other countries to do all the high tech jobs like computer programming and software development. This is very sad and scary.

If the American education system does not continue to churn out a broad range of high tech graduates, the outsourcing countries will become the leading innovators of technology. America needs to stay on top as the leader of the high tech industry and continue to create high-paying technology jobs for America to remain on the cutting edge of technology.

What happens to the displaced American workers whose jobs have been outsourced? The outsourcing corporations claim that the employee will find a job in the next area or industry of economic development. That means the American who graduated from college for programming, now has a worthless degree. Worse yet that American needs to either get another degree, try to find a new job for equal pay or settle for a lower paying position. How long before that new job or industry gets outsourced? Outsourcing is a vicious, never-ending cycle.

Outsourcing may boost the economies of less developed countries. Raising the wages and increasing the standards of living. However, this boost is not secure and may only be temporary as it relies on American corporations outsourcing business to survive. Foreign corporations typically pay employees smaller salaries than those in the United States. These foreign corporations do not always provide pension or health benefits. Foreign corporations are not required to comply with the same safety and environmental regulations as corporations in the United States.

Customers who interact with foreign call centers, consider the service to be lower quality than American call centers. There is a language barrier between the United States and the foreign countries that are being used for outsourcing. The foreign employees sometimes have a thick accent that makes it hard to understand and communicate properly. A public relations or customer service employee needs to communicate well; the representative is the voice of the corporation.

Often times, the quality of service and productivity suffers due to outsourcing. The foreign countries pay low wages which causes a large employee turnover rate. Employee turnover will create a lack of corporate knowledge or experience with a particular product. Large turnover rate combined with lower wages attracts less qualified employees.

Outsourcing is unethical and shows a blatant disrespect for customer satisfaction. Having to deal with a corporate representative in another country may annoy or alienate customers. Outsourcing dramatically and negatively impacts the quality of customer relationships. Corporations need to understand that satisfied customers are what keep a company in business. Outsourcing corporations place short-term financial gain above retaining loyal and long-term customers. Outsourcing may damage a corporation's reputation in the long run and places customer service secondary to the corporation's bottom line. The outsourcing corporation may also experience legal, security, fraud or compliance issues due to the fact that the outsourced employee is not directly employed by the organization.

What is the solution to stop outsourcing? One solution would be to give tax breaks to corporations who keep jobs in the United States. Tax hikes for corporations who continue to outsource. Reward corporations for doing the right thing and punish corporations who outsource jobs.

Take a look at the jobs of friends and family, are these jobs safe from outsourcing? It may seem that these positions are safe, but for how long? Maybe American programmers, help desk and other commonly outsourced jobs should move to India, China and the Philippines, it would be easy to get a secure job overseas. Maybe it would help if  more CEO’s had to call foreign technical support lines and see how frustrating it can be to try to communicate with someone from another country.

Hopefully, American corporations will start to realize that outsourcing is hurting our economy and taking jobs away from hard-working Americans. Maybe corporations will understand that the bottom line is not as important as customer satisfaction and that a corporation is only as strong as its employees, and its reputation.

References

Dan Scifo (April 13, 2007) Commissioners take stand against outsourcing jobs, Pittsburgh Tribune - Review. Greensburg, Pa. Retrieved January 10, 2008 from Proquest.

Bruce Weinstein, (September 28, 2007) The Ethics of Outsourcing Customer Service; Sending jobs overseas may be good for the bottom line in the short term, but frustrated customers will vote with their wallets (Ask the Ethics Guy!). Business Week Online. Retrieved January 10, 2008 from Gale.

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