Is Outsourcing Harming the American Economy?

Outsourcing is the transfer of control of a process or product to a supplier. Companies may outsource for the financial gains they receive. Outsourcing may help companies avoid of burdensome regulations, high taxes, high energy costs, and unreasonable costs that may be associated with defined benefits in labor union contracts and taxes for government mandated benefits.

                Some may argue that outsourcing is harming the American economy because it reduces the employment opportunity. People who lose their jobs due to outsourcing must find new jobs. People who are laid off may find new jobs that they may not be as qualified for as their old jobs. The loss of worker income negatively impacts the economy, since these unemployed workers cannot buy goods and services .Businesses outsourcing jobs do not need to maintain facilities in the United States so they are not taxed. The government is unable to profit off the services it supplies. Because large companies are able to outsource, they can reduce the prices of their products, which harms the small companies who cannot outsource. However, the insourced jobs make up for some of the outsourced jobs. Companies such as Toyota, Fiat, Hyundai, Nintendo, Sony, and other overseas companies add jobs. Many insourced jobs are often higher paying than those outsourced.