The article goes on to discuss companies such as Texas Instruments and Fluor Corporation have been moving there high paying white-collar jobs to places such as India and the Philippines so they make more profit. “Fluor Corporation says doing so reduces the prices of a project by 15 percent, giving the company a cost-based competitive advantage in the global market for construction design” (Hill, 2011).
6.Reread the Country Focus “Moving U.S. White-Collar Jobs Offshore.”
a. Who benefits from the outsourcing of skilled white-collar jobs to developing nations? Who are the losers?
The ones who benefit from the outsourcing of skilled white-collar jobs to developing nations are the developing nations themselves that are getting these white-collar jobs. It will create more and better jobs in that country. The company will also benefit from this as well. They will increase their profits because of the lower cost of producing their products through less labor costs. By doing this it will give the company a much more competitive advantage in the global market.
The losers in the outsourcing of skilled white-collar jobs to developing nations will be the country where to company is from. The people who held those white-collar jobs prior to them moving to a developing country will lose their jobs. This will hurt not only the people themselves but the country as a whole. “Unfortunately, with fewer jobs available for unskilled workers, people may find themselves in exceptional poverty. Poverty does not benefit the US economy since it reduces consumer spending and tax revenues” (www.wisegeek.com, 2013).
b. Will developing nations like the United States suffer from the loss of high-skilled and high-paying jobs?
Will developing nations like the United States suffer from the loss of high-skilled and high-paying jobs? Yes they will. They will lose these jobs to the developing countries as mentioned in the reading. “For a Saudi Arabian chemical plant Fluor is designing, 200 young engineers based in the Philippines earning less than $3,000 a year collaborate in real time over the Internet with elite U.S. and British engineers who make up to $90,000 a year (Hill, 2011).
It makes you wonder why a company wouldn’t do this. When the costs are lowered, the companies will be more competitive in the world. Their profits will increase, and they will be able to expand more. The growing company will be able to create more jobs for the people in developed countries like the United States.
c. Is there a difference between the transference of high-paying white-collar jobs, such as computer programming and accounting, to developing nations and low-paying blue-collar jobs? If so, what is the difference, and should government do anything to stop the flow of white-collar jobs out of the country to countries such as India?
The difference between the transference of high-paying white-collar jobs to developing nations and low-paying blue-collar jobs is that the low-paying jobs are outsourced because they have a large workforce and require lots of money to pay these employees. Whereas the high-paying white-collar jobs require more money to pay each individual employee, but does not come close to the low-paying employees total. Companies outsource for the good of the company.
If they were to outsource their high-paying white collar jobs they would start to look greedy. The government should prevent this from happening, because it is unnecessary for these companies to do this, and if it is necessary then it should be limited. Each country needs jobs for their own people as well as helping out globally. They need to regulate the outsourcing of jobs to keep their own countries people employed.
Hill, Charles, W. (2011). Global Business Today, 7th Ed. The McGraw-Hill Companies, Inc. Chap 5. p. 176
Wisegeek.com. (2013). How does outsourcing affect the U.S. economy? www.wisegeek.com. Retrieved from http://www.wisegeek.com/how-does-outsourcing-affect-the-us-economy.htm